The ocean freight market has experienced a slowdown since the second half of 2022 due to overcapacity resulting from the excessive launch of mega ships amid global economic downturn. While shipowners and shipping companies have accelerated efforts to combat overcapacity, it takes time for them to regulate the supply side to restore profitable freight rates.

In July 2023, the International Maritime Organisation (IMO) adopted the “2023 IMO Strategy on Reduction of Green House Gas Emissions from Ships” in which a more aggressive goal was set. The European Union also extended its Emission Trading System (ETS) to shipping in 2024. Shipowners need to step up decarbonisation efforts and increase their investments in alternative fuels, new technologies and adjust their operations as well.

With advancements in digitalisation, say the deployment of IoT sensors and remote monitoring vessel systems, vessel efficiency and reliability have been enhanced. However, addressing challenges related to workforce adaptation, cybersecurity, and regulatory frameworks is essential for unleashing the full potential of technological advancements.

The cruise market is rebounding faster than expected. The passenger volume in 2023 exceeds the pre-pandemic level in 2019. Global cruise lines are particularly optimistic about the growth of the Asian market and are increasing the number of Asian routes.

The maritime industry is characterised by intense global competition, with many countries/cities competing for market share. Hong Kong’s container throughput has gradually declined over the past ten years and its ranking also lags behind other international maritime centres (IMCs) including Singapore, London and Shanghai in an international shipping centre development index.

Seagoing companies based in Hong Kong are optimistic about the prospects of the industry in the long run and keep recruiting staff amid the temporary uncertain environment.

Since the resumption of ferry services between Hong Kong and Macau, the number of cross-border ferry passengers has been on a rise. However, owing to insufficient manpower, ferry operators are unable to expand their fleets to cope with the increased service demand.

The business of local ferries and workboats is, in general, stable and not much affected by external environment changes. The local vessel sector sees a growing trend on the adoption of eco-friendly vessels. Companies operating local workboats also see a potential opportunity arising from marine construction projects like the LantauTomorrow Vision which are in the pipeline.

Regarding high value-added maritime services, many maritime services providers, including ship insurance companies, classification societies and maritime lawyers, consider it challenging to expand their businesses. Comparatively speaking, ship finance professionals, ship sales and purchase brokers as well as ship engine manufacturers seem to be more optimistic towards their future development. Possible reasons include the tax concessions introduced by the HKSAR Government and shipowners’ increased investments in decarbonisation solutions.

The HKSAR Government is committed to reinforcing Hong Kong’s position as an IMC and enhancing its strengths in high value-added maritime services. Multi-faceted measures in support of the industry have been implemented in the past few years, e.g. implementation of various tax concessions and enhancements of the Maritime and Aviation Training Fund (MATF). The Government also promulgated the Action Plan on Maritime and Port Development Strategy in 2023 with a view to enhancing the long-term competitiveness of the maritime and port industry.