An evaluation of mid-stream operation in Hong Kong

Purpose: Mid-stream operation has had a significant role in Hong Kong’s economic development since the 1960s. Prior to the building of container terminals in Hong Kong, cargo was mainly loaded onto and discharged from ocean-going vessels by mid-stream operations and then shipped to Europe and North America. This paper aims to reinforce mid-stream operation is considered a “must” in supporting the substantial growth of maritime industry and strengthening Hong Kong’s role as an entrepôt. Design/methodology/approach: The authors undertake a historical review of the evolution of Hong Kong’s mid-stream operation over the past half-century and investigate the future of mid-stream operation in light of the Hong Kong Special Administrative Region government’s policy of allocating Public Cargo Working Areas through an open auction process. Semi-structured, in-depth interviews are also undertaken in this study. Findings: The emergence of container terminals generated competition for cargo between container terminals and mid-stream operators. In addition, the Hong Kong Special Administrative Region government’s policy of allocating Public Cargo Working Areas to mid-stream operators through an open auction process intensified negative influences on the survival of the mid-stream operation sector. Originality/value: To date, mid-stream operation has been abandoned nearly everywhere except in Hong Kong. Yet, Hong Kong’s container system has become the most advanced in the world. The authors explain how and why mid-stream operation still plays such a key role in Hong Kong and how to enhance its sustainability. The authors also discuss the academic and managerial implications of their findings.