mai hien

ADVANTAGES OF DOWNSTREAM PORTS IN 2019

Tuesday, 19 February 2019 01:59

Large shipping lines have continuously increased their feeder size to cut costs on each container, which means a draught (the boat is submerged in water) and the overall length of the vessel is also increased. Therefore, downstream ports with deeper flows and larger turning basin will have a significant advantage over upstream ports.

 

The deep-water port cluster in Cai Mep - Thi Vai (Vung Tau) is expected to become an important container gate in the southern region. After a long time with low performance, in fact, container volume in 2017 in this area has tripled compared to 2011 and reached 2.4 million tons, accounting for about 20% of Vietnam's container volume. .

 

With the characteristics of a deep-water port cluster, this area has the advantage of being able to receive large vessels up to 200,000 DWT. In the trend of firms always want to use large size vessels to transport goods. Demand in this region will be positive in the next few years.

Besides, the US-China trade war can help Vietnam increase its ability to gain market share from China as a production center due to its relatively cheap labor force, stable political environment and major Open trade books.

 

 

Meanwhile, Vietnam's export value for goods that China has been taxed (wood, textiles and footwear) grew at a higher rate than every year. This trend may boost the demand for international shipping to Vietnam, thus increasing the amount of container throughput because these products are mainly transported by sea.

 

The Ministry of Transport has issued Circular 54/2018 / TT-BGTVT, thereby adjusting the price frame for a range of services at Vietnamese seaports, including container loading and unloading services. The circular will officially take effect in 2019. Accordingly, the new floor price will be 10% higher than the current floor price (equal to the market price due to oversupply) for the northern ports ( not including HICT in Lach Huyen).

 

This will help to increase the income of downstream ports in Hai Phong by breaking down the service price trend due to the tough competition in this area. In the South, the frame remains the same, except for the terminals in Cai Mep - Thi Vai (up 13% per TEU).

 

However, FDI inflows are slowing down. Too much reliance on FDI will put the economy at risk if the activities of FDI enterprises become stagnant. At the same time, the problem of oversupply in Hai Phong may lead to port operators not fully benefiting from the lifting of container handling rates.

 

In addition, delay dredging activities lead to unsecured channel depth, leading to a reduction in cargo throughput.