All at sea

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Experts generally agree that the immense and natural potential that Vietnam has to develop a strong sea transport industry has not been tapped, leaving it in a state of continued latency.

Economist Nguyen Tuan Hoa of Ho Chi Minh City Development Learning Center said Vietnam is located in the heart of Southeast Asia, and with a long coastline of more than 3,260 kilometers it is a natural site for a vital seaport industry.

Seaports of different capacities can be built at many places along the country, said Chu Quang Thu, former director of the Vietnam Maritime Administration.

Van Phong Bay in the central province of Khanh Hoa, for instance, is the best place for an international transshipment port that can compete with seaports in Singapore and Hong Kong, he said.

The market prospects for Vietnam’s sea transport industry are promising too. The Ministry of Transport has forecast more than 498 million tons of goods will pass through local seaports in 2015. The figure is expected to surge to more than 1 billion tons in 2020 and 2.1 billion tons in 2030.

But Hoa said the domestic market should not be the only target for the industry.

China’s southwest region, with a population of 320 million and an area more than ten times that of Vietnam, is a large prospective customer, he said. Half the transportation costs would be cut if goods from the region are shipped through Hai Phong instead of Guangdong.

Similarly, exports from Laos, Thailand, Myanmar and Cambodia can be transported much faster to inland Vietnam and then shipped abroad via local seaports, he said.

‘Focal point’

According to a report published last year by UK-based research firm Transport Intelligence, Vietnam has become a focal point for offshore production for global manufacturers looking for even lower cost locations than China.

“The latter market has seen labor and transportation costs rise quickly over the past few years, leading companies to re-assess their global supply chain strategies,” the firm said.

But despite the huge potential and advantages, the local sea transport industry is woefully underdeveloped, experts say.

Cao Tien Thu, former director of Hai Phong Port, said both seaports and shipping lines in Vietnam have grown at a much slower pace than needed.

A large exporter of various products, Vietnam still depends on foreign countries when it comes to shipping, he said.

Khuat Van Liem, a former official at the Vietnam Maritime Administration, said a strong sea transport industry requires fleets of large ships and hence large seaports, but the country has neither.

While most shipping lines in the world use container ships of 12,500 twenty-foot equivalent units (TEU), the largest ship that a Vietnamese seaport can accommodate now is just 6,000 TEU. The Van Phong Port under construction in Khanh Hoa Province will not be able to service ships of 12,000 TEU until 2020.

Lack of vision

The lack of a large international seaport not only hinders the role of Vietnam in the global sea transport market but makes it difficult for the country to ship its own products, experts note.

Around 80 percent of the nation’s exports are being handled by foreign shipping lines and most of the cargo into and out of the country has to pass through ports in Hong Kong, Singapore or Taiwan that can accommodate large container ships.

According to a World Bank report, it cost US$720 to transport a 20 feet container from Vietnam in 2007, compared to $335 from China and $382 from Singapore.

Chu Quang Thu said the main reason was a lack of vision.

For a long time, the country has not focused on building international seaports large enough to service container ships, he said.

A government official, who wished to be unnamed, said foreign experts were really surprised upon learning there are more than 100 seaports in the country. The problem is all the ports combined would still be unable to compete against the sole port in Singapore, he said.

Statistics from the United Nations show the Singapore international port handled 28.7 million TEU of freight in 2007 while the total number for all seaports in Vietnam was only 3.9 million TEU.

Quantity vs. quality

Vu Thanh Tu Anh, research director of the Fulbright Economics Teaching Program in Vietnam, said a lot of plans to build new seaports in the central region have been announced, but none of them are economically viable.

Vietnam needs just one deep-water port for each of its three main regions, Anh said, pointing out that there are only three international seaports along the US West Coast, which stretches over 1,900 kilometers.

The priority now should be a deep-water port in the southern region, a project which many investors are keen on.

“We need to admit the underdevelopment of technology and infrastructure at local seaports,” said Vuong Dinh Lam, director of the Vietnam Maritime Administration.

“If the country is really heading for the big sea, it will need deep-water seaports for its three regions.”

Experts say that the government should also pay attention to improving all transportation systems to facilitate the use of seaports, given the considerable time taken now to transport goods inland and to the ports.

Transport Intelligence said Vietnam has invested heavily in upgrading its transport infrastructure, but overall it has had “mixed” success.

Inadequate road networks and limited railway capacity have prevented Vietnam from meeting its full transport potential, the research firm said in its report last year.

Reported by Thanh Nien staff

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