Overload looms large

According to a prefeasibility study on anti-congestion and facilitating trade logistics at the Cat Lai Port conducted by the Trade Facilitation Program funded by the United States Agency for International Development (the USAID TFP project), the Vietnamese economy will bounce back after the Covid-19 pandemic. Reasons for this include the ongoing trade dispute between the United States and China, the trend of factories’ withdrawing from China, and the growing United States-Vietnam trade relations.

In reality, most countries have seen a decline in trade as a result of the Covid-19 pandemic, while Vietnam’s trade still expanded by 5.1% in 2020, with exports rising 6.5% and imports, 3.6%; and 22.6% in 2021, with exports and imports growing 19% and 36.5%, respectively. Last year, Vietnam’s exports stateside rose 24.9% and increased by 14% to China.

In the context of the increasing demand in the region, the report of the USAID TFP project showed that the entire port network along the Soai Rap River would be overwhelmed soon. By 2030, the number of containers arriving at ports therein will increase 55%, from 5.43 million to 8.42 million TEUs. In that year, under the most feasible scenario, ports along the Soai Rap River will operate at only 75% of their total capacity, but severe congestion may still happen at the Cat Lai Port without urgent solutions.

Moreover, the port is unlikely to receive inter-Asian vessels. At present, the biggest vessel the port can receive carries 3,000 TEUs. However, the size of vessels on inter-Asian routes has increased due to a rise in the number of containers. The inter-Asian routes have been expanded to connect some areas in Asia and put vessels of 4,500-5,500 TEUs each into use. If the infrastructure of the Cat Lai Port and other ports along the Soai Rap River remains unchanged, inter-Asian vessels of 5,000 TEUs each and Eastern/Western vessels of 20,000-TEUs will be unable to dock at these ports. They will arrive at the Cai Mep Terminal instead, and container transport activities from/to the Cat Lai Port using barges will increase.

In addition to larger vessels, ports have seen a sharp increase in the number of containers of all sizes. The use of bigger inter-Asian vessels will not hinder the container transport on rivers to HCMC. Conversely, the number of barges entering and leaving the Cat Lai Port will significantly increase thanks to lower goods transport service costs than trucks.

Large vessels cannot enter the Cat Lai Port, but more than 90% of containers unloaded at the Cai Mep Terminal are transported to Cat Lai by barges. There is no official infrastructure system for these barges and they have occupied the space for wharves at Cat Lai, which is needed for large vessels. There is no barge wharf at the Cat Lai Port or an official barge network from Cai Mep to Cat Lai, which will lead to serious congestion once trade activities increase, according to the report.

Prompt actions needed to deal with overload

An appropriate and effective port system will definitely help Vietnam fulfil its commitments and take advantage of the developing global economic opportunities.

As stated in the report, the area can manage the estimated increase in container flows, but resources should be redistributed to adapt to changes in the planned trade volume, vessel size and economic growth. Accordingly, the growth and expansion of ports should be integrated to align themselves with the upcoming trade flows.

The integrated port planning should be prepared and shared to reflect the relationship between the Cai Mep and Cat Lai development requirements and characteristics of vessels and future strategies. This should be considered an urgent recommendation for the ongoing increase in containers and vessel size. Furthermore, the Cai Mep and Cat Lai ports need integrated planning, which can be applied to all other ports in the region in the future.

In addition to employing the “street turn” system to reduce the number of empty container trucks entering and leaving the Cat Lai Port, the report also recommended developing a scheduled barge system to serve the transport demand on the river between Cat Lai and Cai Mep. Currently, most barges entering or leaving the Cai Mep Terminal for the Cat Lai Port and other ports in HCMC are 100-TEU ones, which have operated in the shuttle model. They have moved between an inland container depot (ICD) in the upstream area and the Cai Mep Terminal.

Increasing the barge size to at least 200 TEUs each and arranging schedules for barges may significantly reduce costs. However, a unique ICD will find it hard to have enough goods to fill larger barges, especially if they need more barge services to satisfy customers’ demands.

Scheduled barge routes with many stops will be a good solution with lower costs and higher frequency. The shift from small to larger barges can also reduce maritime traffic congestion. In addition, scheduled services will ensure certainty for all entities in the market, enhance efficiency and reduce congestion at the Cai Mep and Cat Lai ports.

According to the report, HCMC can meet the demand by 2030. The development of a container barge system between HCMC and ICDs and the Cai Mep Terminal is a challenge to the future port planning in the region. With the estimated growth of the container flow at Cai Mep in 2030, all wharves at the Cai Mep Terminal will be used for goods handling; just some wharves will be used for barges. Moreover, the number of barges is forecast to triple. In order to receive a large number of barges in the future, a specialized barge wharf or more is needed at the terminal. It is optimal to develop a barge wharf at each port cluster to prevent the movement of barges between ports.

Source: Saigon Times