Hong Kong Maritime Week ended on Nov 26 with the big message from the shipping industry that more policy attention is needed for the city to expand its reach as a global shipping center, as well as to meet international shipping decarbonization targets.
To start with, a word about terminologies.
Our HKSAR government used to refer to Hong Kong as a transportation and logistics hub. This general term covers land, sea and air transport, as well as a wide range of activities spanning the movement of people and goods using rail, trucks, ships, ferries, airplanes, and including port and airport activities.
For policymaking purposes, it is preferable to distinguish each component separately to ensure important parts don’t fall between the cracks.
Local officials had tended to highlight aviation as a distinctive part of transportation in the past. It is therefore heartening to see “shipping” being specifically referred to rather than lumped in under “transportation”.
The main transport mode for global trade is ocean shipping; around 90 percent of traded goods are carried by sea. We tend to overlook how important this is to all of us. Not only does shipping move food and all sorts of goods we need, but it also moves raw materials, such as energy products, around the world.
A problem with shipping is that it is looked upon by ordinary people as unglamorous, when compared to aviation. The news media also generally focusses on reporting about air travel and airports rather than ships and shipping ports since there is little direct consumer attention paid to them.
Hong Kong, as a long-standing trade and commercial center, has the fourth-largest shipping registry in the world in terms of gross tonnage consisting of more than 2,400 ships. The leading three registries are Panama, Liberia and Marshall Islands, often known for providing “flags of convenience”, when a ship flies the flag of a jurisdiction other than that of where it is owned.
Hong Kong’s registry is not a flag of convenience in the same way. It is known for the high quality of the ships registered and managed out of Hong Kong.
There is a large group of Hong Kong-based shipowners with sizable, diverse fleets that sail the world, including container ships, bulk carriers, and tankers. There is also a strong community of ship charterers and brokers based in Hong Kong. Other essential service providers include financiers who raise capital for the shipping business, as well as shipping lawyers who help clients deal with multiple jurisdictional issues.
In total, this is a sophisticated, multinational, and highly international community since their business is global in nature. Young people who are looking for good careers should not overlook the maritime sector since this is the backbone of world trade.
Hong Kong, as a longstanding trade and commercial center, has the fourth-largest shipping registry in the world in terms of gross tonnage consisting of more than 2,400 ships. … Hong Kong’s registry is not a flag of convenience in the same way. It is known for the high quality of the ships registered and managed out of Hong Kong
Working in managing shipping companies is both challenging and rewarding, and those who are studying law or wish to join financial services should consider specializing in maritime affairs too.
There are many policy issues the public sector can help with. The establishment of the annual Maritime Week by the government-appointed Maritime and Port Board, together with the Hong Kong Shipowners Association, the Hong Kong Trade Development Council and InvestHK — an arm of the government — helps to showcase shipping to the wider community.
One of the topics discussed at Maritime Week this year was decarbonizing shipping. At the global level, shipping is governed by the International Maritime Organization, a UN agency based in London.
The IMO has already mandated international shipping to cut carbon emissions by 50 percent by 2050 compared with its 2008 levels and should phase out carbon emissions altogether soon after mid-century.
This means all the Hong Kong registered ships that sail internationally must comply with the IMO mandate.
Shipowners must retrofit their ships and order new ships, as well as work with fuel suppliers who are finding technological fixes to provide low-and zero-carbon fuels, such as liquefied natural gas, hydrogen, ammonia, methanol, and even nuclear-powered engines. This means there will be considerable innovation in this area, and trials for many years to come that need considerable financing to sustain.
Hong Kong’s policymakers should look at the big picture and see how they can help push this process. A useful step is to know what is happening nationally and internationally.
China is a major maritime nation with a long coastline, with a large merchant fleet and extensive global trading activities and having a dynamic shipbuilding industry that can retrofit and build new ships for the green shipping era. Unsurprisingly, during Maritime Week, the mainland’s China Merchants Group showed an intense interest in decarbonizing shipping.
One suggestion for Hong Kong to broaden its influence in global shipping is via the IMO since it is a member of that body and has a permanent representation stationed in London attending IMO meetings. However, the representative has traditionally focussed on marine safety issues only. By expanding the remit, Hong Kong has much to gain especially as the IMO is driving decarbonization.
Vessels that sail between Hong Kong and mainland waters, including barges, should consider how they can be low carbon too. The mainland is testing and opting for new fuels and technologies.
Container vessels coming to Hong Kong’s terminals will look for green terminal services; which means local operators at Kwai Chung also need to decarbonize, as the land-sea connection determines whether a ship at berth can reduce its carbon footprint.
Hong Kong policymakers need to reconsider whether the structure for maritime decision-making is optimal, since the city doesn’t have a port authority like many of our counterparts, such as Guangzhou, Shenzhen, Shanghai, Singapore and ports in Europe and the United States.
Hence, is the part-time Maritime and Port Board enough or is Hong Kong at a disadvantage when compared to others?
There is exciting work to do but the private commercial sector cannot meet the challenges without working closely with the government.
The author is chief development strategist of the Institute for the Environment, Hong Kong University of Science and Technology.
The views do not necessarily reflect those of China Daily.