Vietnam port delays problematic

Long delays into and out of Vietnam ports are making life difficult for carriers, said C.L. Ting, managing director of trade management for Hong Kong-based OOCL.

"It's a pain to call Vietnam," Ting said, with delays lasting one to two weeks.

"It's unbelievable," he said. "And with bunker costs so high, how can you wait for one week? It throws schedules out of whack."

Ting said that carriers' ability to recover costs due to congestion are hampered by the Vietnamese government.

"If you try to raise rates, to impose a (terminal handling charge) for port congestion, the government won't allow it," he said. "They'll say you're not letting us be competitive in the global market. And they'll revoke your license"

Vietnam is struggling with stifling inflation in recent months, as well as a depreciation of its currency against the dollar.

OOCL said, "port congestion is particularly acute in Ho Chi Minh City," which account for 72 percent of Vietnam's container shipments. "Demand is exceeding terminal capacity. The situation is expected to worsen in 2008 and 2009 before the deepwater terminals at Thi Vai and Cai Mep become operational in 2010. Overall capacity may remain a challenge in the long term."

Ting said China's more stringent labor laws, enacted Jan. 1, have pushed more manufacturing into Vietnam. That, coupled with a rise in import of raw materials, has caused crushing congestion in Vietnam's ports.

"The impact of importing raw materials has really caught them off guard," he said.

And despite construction of the new deepwater terminals by two consortiums -- one led by APM Terminals and the other by PSA -- problems may push further inland.

"There's no road infrastructure," so even as deepwater terminals are built, "you have the port, but no highways," Ting said.

An example is that the new Cai Mep port, being built as the deepwater container gateway for southern Vietnam, is separated from Ho Chi Minh City by the Cai Mep River. Yet even as the port is finished, there likely won't be enough bridge capacity over the river between Ho Chi Minh City and the new terminals.

Source: American Shipper
VietnamShipper