Hong Kong looks set to be one of the first casualties of the Gemini Cooperation — the new long-term collaboration between AP Moller-Maersk and Hapag Lloyd.

Hutchison Port Holdings Trust said Yantian, a major export hub for the US and European export markets, has been selected by the Gemini Cooperation as a main port of call in South China.

Meanwhile, for Kwai Tsing Terminals, it is anticipated that some of Maersk’s and Hapag-Lloyd’s throughput currently handled in Hong Kong may shift to Yantian when the operation starts, HPH Trust said.

However, the Singapore-listed terminal operator did not disclose what volume of container throughput could be affected by the changes.

The new cooperation between Hapag-Lloyd and Maersk will comprise a fleet pool of about 290 vessels with a combined capacity of 3.4m teu.

“We will work closely with Gemini Cooperation to identify any new opportunities which the new cooperation may bring,” HPH Trust said.

The new schedule is due to be launched in February 2025 immediately after the conclusion of the 2M Alliance between Maersk and MSC.

Gemini Cooperation’s scope of services covers seven trades, including Asia/US and Asia/European trades but excludes Intra-Asia trades.

HPH Trust said the move reflected the structural change in shippers’ preference to direct shipments into China instead of vessel-to-vessel transshipment via Hong Kong.

As a result, container volumes into Hong Kong remained stagnant last year despite the easing of cross-border controls from late 2022.

Separately, HPH Trust said the security situation in the Red Sea could have an impact on its throughput volume in the first quarter of this year.

“The ship attacks at the Red Sea could bring disruption to global trade and erratic shipping schedules due to the two-week delay of vessels arrival time by rerouting away from the Suez Canal or even cancellation of some vessel calls,” the company said.

“The disruption may also lead to pressure on Chinese exporters who could face an imbalance and shortage of empty containers.

“Markets in general expect the impact from Red Sea [diversions] to be short term, and port operators will unlikely benefit from the high storage income earned during the Covid-19 pandemic.”

News of the potential changes to Hong Kong container throughput and disruptions caused by the Red Sea crisis came as HPH Trust reported a 79% decline in full-year profit to HKD 233.5m ($29.8m).

Total revenue for the year fell by 13% to HKD 10.6bn as container throughput at HPH Trust ports declined by 6% compared with 2022.

HPH Trust said the average revenue per teu for Hong Kong and China was below last year, attributed to lower storage income and the depreciation of the Chinese currency.

Outbound cargoes to the US dropped by 2%, while those to the European Union increased by 6% in 2023.