Finding faults in Vietnam's seaport planning

Da Nang Port owns a wharf system and modern equipment. Photo: collected.

Uneven distribution

According to Mr. Bui Thien Thu, Deputy Director of Vietnam Maritime Administration, Vietnam's seaport system is currently divided into six groups with 45 ports, including 272 wharfs, two seaports of type IA (international gateway port); 12 seaports of type I (regional ports); 18 ports of type II (local general ports) and 13 ports of type III (offshore oil ports). Vietnam's seaports own about 92.2 km of wharfs, with a total capacity of over 550 million tons per year. Compared to 2000 – the first year of implementation – Vietnam's seaport system has increased 4.4 times in terms of port length.

Currently, most of the regional major ports: Hai Phong, Da Nang, Ba Ria - Vung Tau and Ho Chi Minh City, have been upgraded to accommodate ships of 30,000 DWT. Many ports such as Cai Mep - Thi Vai (CM-TV) accommodate ships of hundreds of thousands of tons. Typically, in 2017, Cai Mep international port (CMIT) belonging to CM-TV cluster successfully accommodated the world's largest container ship with a capacity of 18,300 TEUs (194,000 DWT). In early 2019, this port continues to welcome the CMA CGM Marco Polo vessel with a capacity of nearly 17,000 TEU (187,000 DWT) into weekly operation, connecting Vietnam's import and export goods to the Northern European market.

According to statistics, in the past decade, the output of goods through Vietnam seaports has annual growth of 10 - 12%. However, the market share of goods distributed among ports is quite different. Specifically, the Northern ports area accounts for 25-30% of the transport volume so the capacity is still in excess. Central ports which account for only 13% of total volume are short of goods, using only a fraction of their capacity. Meanwhile, Southern ports account for 57%, container throughput accounts for 90%, being currently overloaded. Many people said that difference of capacity among seaports is large, reflecting a limited vision in the planning of Vietnam's seaport system.

Lack of uniformity

According to Assoc. Prof. PhD. Tran Dinh Thien, Vietnam Economic Institute, the overloading at seaports is not caused by ports but is due to the structure of the port system. For example, the congestion in Ho Chi Minh City port is due to transport infrastructure. Belt road 2 is like a ring road, belt road 3 is quite far away and belt road 4 is still too rudimentary. Thereby, it is found that the connection between the port and the key economic regions is limited.

“The investment and development of Dinh Vu port in the North is a factor helping industrial clusters to grow. However, there is still a paradox for Hai Phong located in the transport infrastructure, small cars go on highway 5B, while super-long and super-heavy cars choose to take the old National Highway 5 which is small with a slow circulation speed. That is because industrial parks are located along the old National Highway 5,” Assoc. Prof. PhD. Tran Dinh Thien said.

Therefore, Thien said that it had to give up the old way of restructuring, allocating resources and had to move towards market mechanisms. For the investment and development of the seaport system, it was necessary to have a long and stable vision to suit the economic changes in the most reasonable way. In fact, in the past few years, we have not had large investment to boost the development of the port economy. Currently, in the context of limited state budget, we need coordination with the State and the private sector to create strong combined resources. In particular, the State must create rules and private enterprises are players, the State must create conditions for private enterprises to grow stronger and meet the requirements of development in the new period.

Mr. Ho Kim Lan, General Secretary of the Vietnam Seaport Association also said that if we wanted to compete with international ports, big ports would have to invest in advance. In addition to increasing connectivity, ensuring high productivity of modern equipment, releasing ships quickly, single window for customers, excess capacity should maintain above 50%, and global connectivity should increase by developing an international chain of seaports. This fact requires Vietnam's seaports to have a broader strategic vision. In addition to the potential to attract international transshipment goods, Vietnam also has the opportunity to attract the development of gathering centers for regional and international distribution of large corporations and large shipping lines.

Also according to Mr. Ho Kim Lan, the short-term, asynchronous development planning, the weak land-connected transport, the fragmented logistics service, the passive responsibility of localities in development planning and funding, management and development mechanisms of infrastructure and supporting service for seaports, the authority to ensure benefits for investors are the bottlenecks of Vietnam's seaport system.