Intra-Asia disruption threatening Vietnam's factories and export growth
Factories in Vietnam and southern China are working through their lunar new year holidays to ...
The first deepsea container terminal in north Vietnam has opened for business.
Capable of handling 14,000 teu vessels, the Haiphong International Container Terminal (HICT) could see the port serving the booming industrial region receiving mainline calls for the first time.
Around 130km from Hanoi, the port of Haiphong has seen average annual growth of 14.6% since 2012 – 2017 throughput was 4.45m teu.
Draught restrictions on the River Cam previously limited port calls at Haiphong to 2,000 teu feeder ships. HICT, part of the Lach Huyen port development, was constructed south of the river estuary on Cat Hai island and has a 14-metre depth.
The terminal has two berths, totalling 750 metres. Two quay cranes are in operation, with another four due to go online in February, when capacity will reach 1.1m teu. HICT expects to handle around 150,000 teu by the end of the year.
“Some shipping lines are planning to send vessels of 8,500-10,000 teu to HICT by the end of 2018,” said HICT vice-director Bui Quang Huy.
“For mainline trades, local importers and exporters will benefit from lower logistics costs and shorter total lead times. Thanks to HICT, the competitiveness of import and export goods in north Vietnam is improved,” he added.
Carriers already calling at HICT include Maersk Line’s intra-Asia unit, MCC Transport, which announced last week it had begun three weekly services aimed at boosting trade between Vietnam, China and South-east Asia.
Meanwhile, a consortium that includes Pendulum Express Lines and Korea Marine Transport Co connects HICT to India via a weekly 6,000 teu vessel call, Mr Bui said.
For mainline trades, cargo from Haiphong is currently transhipped at Hong Kong or Singapore. Trades to the US and Europe could save five-to-seven days, according to terminal operator Saigon Newport, which holds a 51% stake in the facility.
“We have high expectations for a direct service from Haiphong,” said Paul Khoa, chief executive of T&M Forwarding, one of the oldest privately owned freight forwarders in Vietnam. “Especially for the important tradelanes like the US, Vietnam’s top export destination, and Europe, of course.
“However, the reality is still far from the expected, with current calls limited to feeder services while mother vessels are still not in sight.
“One reason is the volume of cargo might still not be enough for the direct call, taking costs into consideration. And the surrounding hinterland infrastructure might need improvement,” he added.
More cargo could be on the way, however. Electronics exports, particularly from Samsung, and the automotive sector have helped propel Haiphong into Vietnam’s fastest-growing city, with 14% GDP growth in 2017.
Furthermore, work on a 520ha industrial park adjacent to HICT broke ground in October. It is operator Deep C Industrial Zones’s third facility in Haiphong, having attracted some $3bn investment to date.
Meanwhile, according to CTI Consultancy partner Andy Lane, any 14,000 teu ships plying the Singapore-South China shipping lanes would need to make a 20-hour, 325 nautical mile diversion to call at Haiphong.
“There are direct costs associated with extra distance, but also higher round-trip speeds to absorb the time ‘lost’. Whereas these are less than diversions into, say Laem Chabang or Jakarta, the Haiphong market is also considerably smaller – currently.
“What we might see is a few mainline services calling directly, taking the lion’s share of the market, leaving the balance of cargo to continue its hub and spoke routing. This could, however, cause the detrimental effect of reduced service frequency, which might not be in every stakeholder’s best interests.
“On Asia-Europe, a Haiphong call might be interesting for the operators of smaller vessels, such as THE Alliance, ZIM or HMM,” he added.