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Gateway Glance: Vietnam By Joe Zelasney Vietnam’s coast extends more than 3,200-km along the western edge of the South China Sea. In Vietnam, critical infrastructure development has not kept pace with strong economic growth. Vietnam has 144 ports, however, it has yet to construct a large, world-class, deepwater seaport — though one is on the way. The limited size and depth at Vietnamese ports requires goods manufactured in Vietnam be transshipped via larger ports — including Hong Kong and Singapore — en route to international markets. Transshipment not only drives up transportation costs, but goods take longer to reach markets. These factors undermine Vietnam’s low labor cost advantages over other regional manufacturers. The Vietnamese government wants to improve the country’s port and transportation systems. Improved ports would allow Vietnam to integrate into regional transport networks, thereby shortening routes and decreasing transport costs for goods leaving and entering the country, which could increase foreign investment and improve the competitiveness of local manufacturers. An accurate assessment of Vietnam’s current and future port capacity is difficult, due to the fact the majority of Vietnam’s major ports are in some phase of improvement. In addition, separating ambitions and projections given in government reports, from the reality of how actual projects are progressing is easier said than done. Vietnamese officials estimate that it will cost more than $60 billion to bring maritime transportation infrastructure up to international operating standards. The Vietnamese government and foreign investors plan to spend $4.5 billion over the next five years to improve seaport infrastructure. In the south, home to Vietnam’s large manufacturing base, the most progress to date has occurred. Joint ventures are leading the way in port expansion. Since 2006 more than 10 foreign companies have entered into joint venture port construction projects in Southern Vietnam, near Ho Chi Minh City. The Port of Ho Chi Minh City is Vietnam’s largest and most productive seaport, however, it is plagued by obsolete facilities, draft restrictions, and severe congestion. The Saigon Newport Holding Company was formed in 2006 with the purpose of furthering the competitive position of the Port of Ho Chi Minh City. The Saigon Newport has undertaken the task of developing new container facilities down river from Ho Chi Minh City, at Cai Mep, with the objectives of: relieving congestion, increasing proximity to the region’s industrial parks and export processing zones, and eliminating draft restrictions to better accommodate large ocean going vessels. Six new joint venture container facilities are in various stages of planning and development between the Saigon Newport Group and international transportation companies. Two of the new terminals are already operational; three are under construction with openings scheduled in the next few years; and a sixth is in the planning stage. Complementary shore side infrastructure is being planned and developed by the Vietnamese government. Saigon Port-PSA Terminal is being built in two phases. The US$240 million project is a joint venture among Singapore’s PSA (49 percent); Saigon Newport (36 percent); and Vietnam National Shipping Lines (15 percent). The first phase is operational and will have a capacity of 1.1 million TEUs when complete. Eventually, the second phase will double the facilities capacity to 2.2 million TEUs. Vessels began calling in June 2009, with direct service to N America. Tan Cang Cai Mep Terminal is being built in two phases. The first phase is operational, though not complete. Phase I will have an annual capacity of 650,000 TEUs per year. Vessels began calling in June of 2009, with direct service to N America. Three more terminals are under construction: Saigon International Terminal Vietnam, Cai Mep International Terminal and Saigon SSA International TerminalConstruction has yet to begin on a sixth, $520 million terminal that is a joint venture between French carrier CMA CGM and local companies Gemadept Vung Tau and VNM General Transport Services.	In This Issue Up Front News, Trends & Analysis New Items Transport Economics: Don’t be so gloomy Capitol Watch: From cargo screening to roadability equipment Trade Tools: A different world of trade in 2010 Supply Chain Chris Steele: The corner and what’s around it Compliance Corner: Hot trade compliance issues for 2010 Tech Trends: Five trends for 2010 Commentary David Bennett: Five predictions for 2010 Gateway Glance Georgia Vietnam The Port Community East Coast Ports 2010: Five things to watch for West Coast Ports 2010: The future of West Coast port productitivy? The Shipping Environment: Five sustainable trends for 2010 Product Review: Cranes Casualties Triple-deck trailer barge snaps towline, tankers leak, Coast Guard ice breaker runs aground ... and much more Final Say Your supply chain dynamics: 2010 crisis? Or oppotrunities?
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Gateway Glance: Vietnam