A CONSULTANCY study which looked at ways to restore Hong Kong's competitiveness as a sea-trade logistics hub has concluded that "there is no easy solution" to narrowing the cost differential in terminal handling charges (THC) between ports in Hong Kong and Shenzhen.

Currently it costs HK$800 (US$100) per FEU more in THC for using Hong Kong ports.

THC are fees shippers pay shipping lines for loading and unloading containers on and off ships. In Shenzhen, the fee is called the Origination Receiving Charge (ORC).

Hong Kong's THC per FEU is US$366 for transpacific routes, while the ORC in Shenzhen's three major ports is US$269. These charges have remained unchanged since 1998.

"There have been attempts by various bodies representing shippers to request shipping lines to lower THC and to lobby the government to intervene. They have not been successful," the McKinsey & Company report said.

The report, entitled Restoring Hong Kong's Competitiveness as a Sea-Trade Logistics Hub, said that the main obstacle to change was that THC and ORC are "private commercial charges" levied by shipping lines on shippers.

"It is further complicated by its opacity, which makes it difficult to judge whether it is pure cost recovery. Nonetheless, it is unclear whether even with complete transparency there would be any change to the situation due to the private commercial nature of the charge.

"We have insufficient data to substantiate or refute whether it is a pure cost recovery mechanism," the US consultancy added.

The question of whether the two sets of charges could be made more level was also dealt with in the report.

McKinsey explained that globally, there were many examples where ports serving the same hinterland adopted the same charge.

The study, which was funded by the Better Hong Kong Foundation, suggested that Hong Kong and Shenzhen ports should work towards charging the same to shippers on both sides of the border and thereby boost the territory's competitiveness.

The report added that there was "no easy solution for resolving the gap", stressing there was a need for "all relevant parties, including the shipping lines, the terminal operators, the consignees and the shippers to work together to find a solution to reduce this gap".