With its lengthy coastline of some 3,200 km, Vietnam's seaport network comprises of numerous small and medium-sized entities, the fragmented sea-side capabilities further hampered by inefficient land-side distribution.
Most large ports are located on rivers, like Hai Phong and Ho Chi Minh City, typically with limitations of access from the ocean, water depth, quay length and container yard space, compounded by downtown city locations making cargo transfers to other modes of transport difficult and inefficient due to traffic congestion. Hence the development of modern deep-water port facilities at Cai Mep - further out from HCMC and closer to the ocean.
However, as discussed in a recent ASEAN Ports and Shipping forum, the fragmented approach to the development of multiple container terminal facilities at the Cai Mep-Thi Vai port complex - situated on the southeast coast some 50 km from Ho Chi Minh City - has resulted in over-capacity, to the extent that operations at several of the new terminals have been suspended, due to a shortage of cargo and absence of ships.
Distance from major industrial zones, together with limitations in land side connectivity - and associated additional cost implications - all combined to make cargo owners reluctant to utilise the newly built facilities, in turn making shipping lines question the viability of making port calls at the new terminals.
Picture: South Vietnam fragmented container port developments resulting in over capacity and underutilisation (source: ICF GHK Hong Kong)
Compounding the unfortunate scenario is the continuing operation of the Saigon city river ports in downtown HCMC, thereby supporting the existing inefficient operations within the busy city, with the related congestion and pollution, and further entrenching the incumbents’ reluctance to move cargo operations to the new Cai Mep facilities.
As a ray of sunshine amongst the gloom, CMIT (Cai Mep International Terminal) see many positive opportunities for Vietnam to capitalise on the newly constructed, modern, deep-water terminal facilities and their strategic geographic location near the ocean, not least of which is to connect south Vietnam to the major international trade flows from Asia to Europe and USA, eminently feasible assuming larger container vessels can be persuaded to return to Cai Mep and that multimodal hinterland connectivity can be enabled through effectively integrated logistics networks.
In the international context, Vietnam’s location on the South China Sea provides access to the main intra-Asia and inter-Asian shipping routes, which are forecast for above average growth in the coming years. Adopting a more holistic and integrated approach to deep-sea port development, and the related multimodal hinterland connectivity, will enable Vietnam to better capitalise on its strategic position and vast potential – with many opportunities to empower performance and growth throughout regional supply chain ecosystems in this Asia Era.