Reducing costs for import and export goods - Part 2: Many ports, short roads: Why not commensurate with the potential?

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Goods passing through Hai Phong port are concentrated in only a few points, the rest developed in a fragmentary and inconsistent way. Photo: Thuy Hong

Hai Phong Port - fragmented, Quang Ninh Port - deep but little cargo

The Hai Phong port area has been developed for over 100 years, becoming the most important gateway for Vietnam’s international trade.

In 2020, the volume of goods through the Hai Phong port area reached about 143 million tons (including both import-export goods and domestic goods), accounting for about 40% of the country's import and export volume.

Unlike Vietnam’s important seaports, Hai Phong has not only one but a system of ports located along 20km of Cam River, including: Hoang Dieu, Vat Cach, Green Port, Chua Ve, An Hai, and Dinh Vu.

Thanks to many advantages, Hai Phong port is qualified to become a bustling international port system not only in the region but in the world.

In fact, import and export activities through the area are mainly concentrated in Dinh Vu peninsula with ports belonging to many enterprises, and at berths No. 1 and 2 in Lach Huyen international gateway port. The volume of import-export goods fell sharply in the important port areas such as Hoang Dieu, Green Port, and Chua Ve. These ports now mainly serve domestic transportation with a limited cargo volume.

In general, the development of Hai Phong’s port system is not commensurate with its potential. Goods are concentrated in only a few points, and the rest developed in a fragmentary and inconsistent way.

According to statistics of Quang Ninh Customs Department, import and export activities of goods through the seaports (Hon Gai, Cai Lan, Cam Pha, and Van Gia) account for a large proportion, about 45-60% of the total import-export turnover in the area, and over 90% of the total import-export tax revenue. However, the goods are mainly bulk cargo, and container cargo accounts for a small proportion, mainly are temporarily imported for re-export, bonded warehouses, and port-transported goods to Hai Phong.

For example, although Cai Lan port (including Quang Ninh port and CICT port) has advantages in being the top international deep-water seaport in the North with the best customs procedures, annual import and export volume through this port only reaches more than 11 million tons of bulk cargo and more than 50,000 containers, reaching about 75% of its design capacity.

The "connection" bottleneck

The biggest and most visible shortcoming affecting the development of the Hai Phong port system is the lack of connection with the domestic traffic system (road, railway, and waterway).

There are a lot of important ports stretching kilometers, but only one route 365 from Nguyen Binh Khiem fork to Dinh Vu peninsula (Hai An District) is available. This is the only route accessing important ports such as Tan Vu, Dinh Vu, Nam Hai Dinh Vu, and VIP Green, and connecting Hanoi-Hai Phong expressway (Highway 5B) and Highway 5A.

Though route 365 has just been upgraded and expanded in recent years, it has quickly been overloaded when the volume of imported and exported goods in Dinh Vu peninsula has grown rapidly.

The Hanoi-Hai Phong railway system was built in the French era connecting to Hoang Dieu port. It now passes through the center of Hai Phong, leading to frequent traffic jams and inability to connect and transport goods from Dinh Vu and Lach Huyen port areas to meet the road system.

Hai Phong has only Cat Bi international airport, but there is no direct road connecting to Hai Phong port area from this airport.

The inland waterways connecting to Hai Phong are also poor, with only an inland waterway transport route to Bac Ninh.

In Quang Ninh, as a deep-water port, Cai Lan port is often filled with alluvium, so cargo ships over 50,000 DWT need to transload and unload at floating port areas for safety when entering the port. The load reduction causes large losses, cost increase for businesses, and revenue reduction for port operators.

Additionally, the port area’s infrastructure has deteriorated with narrow roads, causing congestion when more than two bulk carriers enter; the inner connection roads were damaged with many potholes, manhole covers were cracked, flooding occurs after rain; and there is a lack of parking lots in the port.

The traffic system and highways in Quang Ninh province have been invested, gradually meeting the import and export needs. However, a representative of Quang Ninh Port Joint Stock Company said the railway route (connected to the port since 2010) has not been put into operation; Highway 18 is too narrow to meet the volume of goods. Moreover, parking spaces are not enough to access the ports when delivering goods. Although Viet Hung and Cai Lan industrial zones have been formed, the output of goods through these ports is low; and logistics services are lacking and weak, depending on units from Hai Phong.

As the port continues to grow - what will the transportation infrastructure be like?

According to Vietnam's seaport planning, Hai Phong international port was built in the waters belonging to Cat Hai district. The project (started in 2013) was built in the south of Lach Huyen estuary (Cat Hai) with a natural depth of -3m and a total length of approximately 8,000m; the entire length of the channel is about 18km, which can receive ships with maximum tonnage of up to 100,000 tons.

In May 2018, two container terminals No.1 and 2 of Tan Cang Hai Phong International Container Terminal (TC-HICT) were opened and put into operation. TC-HICT has a total area of 44.9 hectares, with two container terminals capable of receiving 14,000 teus container ships, and general vessels up to 16,000 DWT (equivalent to 160,000 tons). The Government has approved an investment project to build terminals No.3 and 4 at Hai Phong international gateway port, and two of its container berths with a length of 375m per berth, which can accommodate container ships of up to 14,000 teus, and general ships up to 160,000 tons.

The Prime Minister has just issued Decision No. 299/QD-TTg approving the investment policy of berths No. 5 and 6 in Lach Huyen port area of Hai Phong seaport. This project is capable of receiving containers up to 100,000 DWT (equivalent to carrying capacity of 8,000 Teus); a barge berth to receive ships and barges with a capacity of 48 Teus.

Thus, a series of seaport expansion and development projects in Hai Phong have been invested, but there is no solution to remove the bottleneck on the connection with the domestic traffic system.

According to Dr. Nguyen Thanh Son, Vice Rector of Vietnam Maritime University, Hai Phong needs to offer solutions to synchronously develop the multimodal transport system. First, to strongly develop the inland waterway transportation system from Hai Phong to Bac Ninh, Bac Giang, and Hai Duong, especially the inland waterway transportation for containerized goods.

Second, to soon re-plan the railway to connect directly to Lach Huyen port area without going through the city center.

Third, to expand the scale of roads connecting Lach Huyen port to inland areas, especially a direct connection from Lach Huyen port to Cat Bi international airport is required.

Fourth, to expand the area in Lach Huyen port area for accompanying services, especially logistics services such as building a system of warehouses and storage yards.

According to Bui Hong Minh - Deputy Director of Quang Ninh Department of Transport, except for Cai Lan port, the province will report to the Ministry of Transport to soon deploy Hon Net port (Cam Pha), invest in Con Ong transshipment area to build a deep seaport. Additionally, by the end of 2021, the construction of Van Ninh port will begin.

Bui Anh Thai, Cai Lan International Container Terminal Co., Ltd. (CICT), said: “CICT was constantly improving and efficiently applying information technology solutions to save time and cost for shipowners, as well as meet the needs of exploiting many types of goods from containers. Large factories such as HTC, Foxconn, TCL, and Samsung have been planning to invest in Quang Ninh’s large industrial zones such as Dong Mai, Viet Hung, Cai Lan, Hai Ha, and Hai Yen, creating positive signals for container handling activities.”

But what needs to be done right now is to synchronize the traffic system, highways, railways, and airlines in the province.

These cannot be resolved in a short time, so two of Vietnam’s largest port systems will continue to have great potential but be unable to promote it.