Vietnam and Cambodia develop their port infrastructure

At the end of May Mitsui OSK Lines opened their ‘Haiphong International Container Terminal’ at Lach Huyen Port in northern Vietnam. With a draft deep enough to receive, if not ultra large Post-Panamax, then sizeable 14,000 TEU vessels, the facility has six gantry cranes giving an annual capacity of 1.1m TEU.  It enables direct calls to be made to northern Vietnam rather than relying on feeder services.

The project marks the first stage of development of the Lach Huyen Port, a joint venture between the Governments of Japan and Vietnam, financed by the Japanese Government. Lach Huyen is key to the expansion of the economy in northern Vietnam. The area has had restricted choice of container ports and this has been a significant obstacle in the economic expansion of Vietnam.

Similar developments are taking place in Cambodia. Again, financed by the Japanese Government, Sihanoukville Autonomous Port, which is Cambodia’s only deep-sea facility, has completed a dredging project to clear its approach channel to 14.5m. To complement this Sihanoukville opened in June a ‘multipurpose terminal’ which is designed to offer both bulk and container handling capabilities, although it is unclear what volumes of containers its crane infrastructure can offer.

Elsewhere in Cambodia there are plans for a new terminal to be created at Stung Hav, this time backed by Chinese finance and port operators. However, it is uncertain when this project will start and how large the facility will be.

At present Cambodia is heavily reliant on road freight from Thailand, despite growing demand from clothing and electronics production in the country.

Similarly, Vietnam is a major destination of investment, especially from Japanese manufacturers looking for an alternative production location to China.

Yet the economic model of Vietnam in particular has been quite different from the infrastructure-intensive path taken by China. The building of port, rail and road projects has been slower, delayed by a different political environment to that in China.

The economies of South East Asia have enormous potential. The wider region has a population of hundreds of millions and, from Myanmar to Singapore, includes some of the most developed and underdeveloped economies. As the examples from Vietnam and Cambodia illustrate, their logistics provision is struggling to keep up with demand and the need for investment in logistics provision is very large.

Author: Thomas Cullen

Source: Transport Intelligence, July 17, 2018


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