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3 Things You Should Know About Hutchison Port Holdings Trust

HPHSmall though it may be, Singapore boasts the biggest port in the world in terms of shipping tonnage – indeed, you only have to look out to sea to spot a container ship or twenty en route to be loaded or unloaded.

One company with a rich shipping history is Hutchison Port Holdings Trust (HPH Trust) (SGX: NS8U) – the first publicly traded container port business trust. It is affiliated with Hutchison Port Holdings (HPH), a global leader in the container port industry.

Containerisation

While Hutchison Port Holdings started life way back in 1886 as the HongKong & Whampoa Dock Company, building and repairing ships, by the mid-1950s the use of shipping containers, which could be quickly and easily transported between ship, rail and road had started to take off.

The company diversified into cargo and container handling operations, converting a variety of ships into container vessels and opening its flagship operation – Hongkong International Terminals (HIT) in 1969.

In 2012, the HPH port network handled a combined throughput of 76.8m TEUs (Twenty-foot Equivalent Units – or put more simply, 20-foot containers) worldwide. Today, the HPH network’s port operations span 26 countries throughout Asia, The Middle East, Africa, Europe, the Americas and Australasia.

HPH Trust was founded in 1994 to manage the company’s growing international port network. The Trust’s investment mandate is to invest in, develop, operate and manage deep-water container ports in two of the busiest container port cities – Kwai Tsing, Hong Jong and Shenzhen in China. The company also has a 50% interest in COSCO-HIT Terminals in Kwai Sing Port.

But did you know…

  1. HPH is a subsidiary of Hutchison Whampoa Limited (HWL) owned by Hong Kong billionaire Li Ka Shing and one of Hong Kong’s oldest “hongs” (trading companies).
  2. By 1888, the company owned and operated the largest dock in the East, the Admiralty Dock, capable of handling the biggest vessels afloat at the time – and by 1913 had built the largest Chinese ship ever listed on the Lloyds Register – The Ningshin, an enormous 2,000 ton vessel.
  3. The world’s newest and biggest cargo ship, Maersk’s “Triple-E” is a quarter of a mile long, contains as much steel as eight Eiffel Towers and could fit 36,000 cars inside its containers.

Trade by sea has grown four-fold since 1970 and is still growing. Shipping containerisation has changed the world – while transport costs used to eat as much as 25% of the value of whatever is being shipped, popping it into a container now reduces this to just a few cents.

Indeed, when you consider that around 90% of world trade is transported by sea (clothes, food, electronics, furniture, you name it….) you realise quite how important shipping containerization is for keeping prices affordable.

What’s more, with container ships getting bigger and able to carry more TEUs per trip, the hope is that shipping lines will be able to further reduce costs.

HPH Trust has commented that it “is anticipated to benefit from these changes with its superior infrastructure, natural deep-water channels, long continuous berths and scale of operations. The acquisition and integration of ACT with HIT and COSCO-HIT will enhance the scale, operational flexibility and efficiency of the Trust’s Kwai Tsing Port facilities.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.