Port Logistic Services: Easing Worries

After more than 10 years calling investment capital for port system development in Ba Ria – Vung Tau province, seaport projects have gone into operation one after another. However, logistics services are insufficient and fail to serve these new ports.

Remarking port logistics investment in Ba Ria – Vung Tau province, Ms Le Thi Kim Huong, Director of the Department of Planning and Investment, said: “Logistics is a vital sector but is was not satisfactorily invested and developed previously. In the past two years, central and provincial authorities have kicked off many programmes to instruct investment in this field. Big projects are being carried out and I hope logistics projects will supplement and facilitate import and export activities to develop.”

Inseparable logistics

In early 2010, Ba Ria – Vung Tau province licensed many port-related projects, including three port logistics services projects worth VND950 billion (US$50 million). These three projects are considered a timely supplement for the incomplete port development plan. Previously, when the Port Complex 7 development plan was announced, Ba Ria – Vung Tau province became the centre with eight container ports with an annual capacity of 2 million TEUs a year each. However, planners only cared about the locations for ports, not inseparable services for ports, specially container terminals. Thus, when the first phase with two international terminals, namely SP-PSA and Tan Cang Cai Mep, started operations, port operators have to take care of logistics services on their own.

A container wharf, with an individual length of 300-500 metres, can serve only one vessel at a time. In the future, when all eight container wharves are operational, the arrangement of empty containers will be much more difficult because the complex will handle nearly 20 million TEUs of cargo a year. Congestion is foreseeable. This shortcoming actually concerns port operators. Mr Tran Huu Trung Tin, Deputy Director Cai Mep Agricultural Product Port, said: “There are many ports but there are no transhipment terminals or warehouses. If we do not do right now, congestion will be very serious here. This has also happened to Hai Phong ports and Ho Chi Minh City ports. Without supporting services, ports cannot operate effectively.” Mr Tran Khanh Sinh, Director of Tan Cang – Cai Mep Port, said: “Seaports are never separated from logistics activities as logistics will reduce distribution costs of manufacturers.”

Port logistics system

To ease concerns of port operators, provincial authorities have actively proposed the central government to supplement logistics service centres to the port development plan in Ba Ria – Vung Tau province. To date, 15 port logistics services projects have been agreed, including five licensed. Three newly licensed projects in 2010 were a port service yard and warehouse invested by Asia Infrastructure Investment and Services Joint Stock Company, a container yard and warehouse invested by Hoang Lam Co., Ltd and a Cai Mep container reception and distribution centre invested Vietnam Port Investment Consulting and Development Joint Stock Company. These projects are mainly located in Tan Thanh district and along ports. This is really a good sign for port investors and operators as well as local authorities.

However, licensed port logistics services projects have small scale, especially areas. Hung Long Construction Company operates the largest logistics service centre on an area of only 71 hectares. The investment capital for these projects is also limited, with just VND800 billion (US$42 million) for the biggest. Before ineffective port logistics service development, the People’s Committee of Ba Ria – Vung Tau province assigned the Industrial Zone Management Board to calculate the area for this. The board intends to allot over 1,000 hectares in Cai Mep Ha Industrial Park to build a large-scale logistics service centre to serve ports in Cai Mep – Thi Vai port complex, Long Son area and Vung Tau city.

Mr Le Minh Chau, Director of the Ba Ria – Vung Tau Industrial Zone Management Board, said: “We expected to take the entire area of Cai Mep Ha Industrial Park for a port logistics service centre. Investors must have enough finance and experience in logistics services, etc. Upcoming port logistics services projects are believed to add wings for deepwater seaports in Ba Ria – Vung Tau province. – VCCI

Tags: vietnam logistics, Vietnam Port Logistic Services