News / New barge services a boost for shippers looking to source in Vietnam

The growing appeal of Vietnam as a sourcing location has always been challenged by its limited land infrastructure, especially its road network in the southern Mekong Delta region, around the commercial hub of Ho Chi Minh City.

However, challenges can present opportunities, and new coastal shipping and inland waterway services are helping – with another two announced in the past few days alone.

DP World has teamed up with state-owned VIMC Container Lines to launch the Mekong Express, a combined river-sea service connecting the deepwater terminals at the port of Cai Mep with the inland port of Can Tho (Cai Cui), where much of Vietnam’s seafood processing industry is concentrated.

Vietnam is the third-largest producer of processed seafood products in the world, second only to China and Norway. It exported $10bn worth, equating to 2.4m tonnes, last year and is forecast to grow this by 10% this year.

Operated by a single barge, “with capacity for several hundred teu per voyage, including a large number of refrigerated containers”, the new routing will reduce the transit time of 48 hours for inland-only barges, by 70%, to 15 hours by cutting the journey from 367km to 200km.

It is currently scheduled to do two round-voyages a week, and DP World said it planned to extend the service to include to its Saigon Premier Container Terminal (SPCT) in Hoi Chi Minh City, and VIMC’s facility nearby, at Saigon Hiep Phuoc Port.

“With the Mekong Express, we are responding to demand for a more efficient and reliable service,” said Glen Hilton, CEO Asia Pacific at DP World.

“This will help support economic development, not just within southern Vietnam but throughout the country. The launch of this new coastal logistics service also marks a major step in our expansion in Vietnam, complementing our operation of Saigon Premier Container Terminal.”

The service is likely to be well established by the time CMA CGM launches a new electric-powered barge, connecting its Cai Mep terminal with the inland Binh Duong province, some 180km away and home to a cluster of apparel and footwear production facilities.

The French carrier has formed a joint-venture, Green River Transportation, to run the operation with local partner Gemadept. The two jointly operate the Gemalink Container Terminal in Cai Mep.

American footwear manufacturer Nike – one of the first major retailers to switch some sourcing to Vietnam as the ‘China-plus 1’ strategy gained popularity – has signed up as an anchor client, attracted by the promise of zero-emission hinterland transport when the service launches in the first quarter of next year.

CMA CGM said: “This low-carbon logistics model is designed to be replicated with other customers, and in additional countries, especially where inland waterways play a key role in supply chains.”

The real innovation in the service is that the vessel will be recharged at a new solar power station adjacent to the Gemalink terminal.

And the JV project comes shortly after CMA CGM announced a $600m investment to develop a new container terminal at the country’s northern gateway of Haiphong.