By Kyunghee Park

(Bloomberg) — Billionaire Li Ka-Shing’s Hutchison Port Holdings Trust predicts extra mega ships will name at its Shenzhen port to maneuver cargo from the important thing Chinese export manufacturing area.

Its Shenzhen facility, in Yantian, opened a brand new berth this 12 months and one other will start working within the second half to deal with these large ships, Gerry Yim, chief government officer of the Singapore-based firm, mentioned Monday. Hutchison Port is also seeing extra container barges shifting from different components of the Pearl River Delta to Shenzhen to be loaded onto ships for export.

The Yantian terminal strikes about 70 % and 65 % of the Shenzhen space’s exports to the U.S. and Europe respectively, the CEO mentioned, making it the most important port facility within the southern Chinese province. The progress at Shenzhen, accounting for greater than half of Hutchison Port’s income, might eat into some quantity on the firm’s Hong Kong terminal, which is seeing a drop within the cargo it handles as transshipments decline.

Shenzhen “is important for China’s exports,” Yim mentioned at a briefing in Singapore.

Falling Volumes

Hong Kong, as soon as the world’s busiest container port, has misplaced volumes to its neighbors within the final 20 years and has fallen in world rankings to fourth place after Shanghai, Singapore and Shenzhen.

Expansions by mainland Chinese ports and extra delivery traces making direct port calls have hit the corporate’s Hong Kong port volumes, that are largely transshipments.

Hutchison Port Holdings Trust operates container terminals in Hong Kong and Shenzhen, in addition to river terminals in Guangdong. Hutchison Port Holdings Ltd. runs services managed by Li elsewhere, together with Rotterdam, Sydney, South Korea’s Busan and different Chinese cities.

Li’s CK Hutchison Holdings Ltd. owns 30.07 % of Hutchison Port Holdings Trust by its subsidiaries together with Hutchison Port Group Holdings Ltd., in keeping with the annual report of the Singapore-based firm. Temasek Holdings Pte holds 11.04 % by way of subsidiaries and related firms, similar to PSA International Pte.

Worldwide, the variety of mega ships will most likely to extend to 250 in two years’ time from 150 at current, Yim mentioned.

Industry Changes

The world delivery business’s restructuring — which has seen the mix of China Ocean Shipping Group and China Shipping Group in addition to CMA CGM SA’s takeover of Singapore’s Neptune Orient Lines Ltd. — will have an effect on transshipments in Hong Kong, Yim mentioned. Changes to alliances amongst delivery operators worldwide additionally will have an effect, he mentioned.

The firm elevated tariffs at its Hong Kong terminal by 3 % to five % final 12 months for about half of its prospects, and can focus on a price enhance with the others, Chief Financial Officer Ivor Chow mentioned on the briefing.

Hutchison Port Holdings Trust dealt with a mixed 12.2 million 20-foot containers at its container port terminals in Hong Kong and Shenzhen final 12 months, 1 % lower than in 2014.

The firm posted a web revenue of HK$3.04 billion ($392 million) in 2015, in contrast with a lack of HK$16 billion a 12 months earlier when it acknowledged a one-time impairment associated to a labor strike in Hong Kong. It’s scheduled to report first-quarter outcomes after the Singapore market’s shut Monday.

© 2016 Bloomberg L.P