Dockworkers Strike in Hong Kong

Published on Author winn

Hundreds of Hong Kong contract dockworkers entered their seventh day of strike today.  The union is lobbying for a 20 percent pay raise to compensate for recent years’ pay cuts.  Hutchison International Terminals, the employer, is only offering a 5 percent raise.  Workers make about $90 a day, or $2,200 a month.  Some workers claim that after considering inflation rates, they are being paid less than what they were ten years ago.

The strike has forced cargo ships to spend a lot of time waiting outside of the city’s port until the leftover dockworkers can unload a ship’s goods.  Some ships are being forced to wait 60 hours, as opposed to the typical 3 hour wait.

The strike costs Hutchison International $644,000 per day and, if it continues, may hurt the peak export season between May and October.  The strike’s impact is particularly damaging since Hong Kong is the world’s third-busiest port in the world.  This port is also considered one of the most efficient.  These inconveniences will likely result in decreased business if they persist for much longer, since the port already charges higher rates than most.


Sources: Hong Kong Strike Clogs Shipping Traffic
                 –Hong Kong Port Strike Enters Seventh Day

5 Responses to Dockworkers Strike in Hong Kong

  1. Given your analysis, I assume that there are not enough deepwater ports to satisfy current volume in mainland china. To what extent has traffic outgrown Infrastructure in the past 10 years, and what plans does China have to expand its port capability. Further, it would be interesting to analyze the effect of port delays on the logistics industry of China to gauge dependance on intermodal freight.

  2. While the strike is concerning given the efficiency and importance of the Hong Kong port, isn’t it possible for Hutchinson International to recruit temp workers to continue the work, especially given the country’s large labor force? It would also be interesting to compare the other ports available in China to that of Hong Kong in terms of business, prices, and labor wages to derive the reasons why Hong Kong’s port is so important – is there a specific industry that sees the most traffic in this particular port?

  3. It is interesting to note that the port is described as one of the most efficient ports in the world. Clearly efficient does not imply optimal. I think what we see in the pressure from the strike for increased wages is workers attempting to raise their social benefit from working on the dock to equal the private benefit.

  4. It seems like the dockworkers and Hutchison International are still very far apart in their negotiations. It will be interesting to see how this develops because of how much it costs the company each day. Like Shue stated, wouldn’t Hutchison seek temporary laborers? There is an availability of labor in China and it may help the sides start to negotiate more.

  5. 1. While the region has other large container ports, the associated logistics systems (including factory locations) lessen the ability to substitute. In all likelihood, at peak season there are not only capacity constraints but issues with trying to reschedule ships. Every hour not underway is costly – the crews get paid for the extra time, and customers with tight logistics may have insurance for timely delivery. So its not just the port, but the port’s customers who care.

    2. Employing ‘scabs’ may work if the jobs are low-skill, but the reason the port is efficient is both sophisticated IT support and workers who understand the flow of containers and the loading process.

    Note I’ve been in this port, including a visit to the control room, banks of worker at computer screens. Because of HK’s limited physical space, containers are packed 7 high [any more runs into issues when winds are high].

    As to labor negotiations, public pronouncements are often part of an elaborate ritual, well known to those involved but opaque to those who don’t follow them regularly. Are they “far apart”? – don’t infer too much from press releases.