American Shipper

APL: Vietnam’s continued growth depends on infrastructure planning

APL: Vietnam’s continued growth depends on infrastructure planning

Vietnam needs an extra 1 million TEUs of terminal handling capacity by 2010 or it risks losing the gains from its recent rapid trade growth, said a regional executive with Singapore-based container line APL.

   Jim McAdam, APL's president for the Asia Middle East region, speaking in Hanoi for the Vietnam Ports & Logistics 2007 conference, said the planning and construction of an integrated seaport network in Vietnam must be better coordinated as port and landside infrastructure is now close to full capacity.

   'Vietnam's cargo growth potential is tremendous,” he said. “Average historical growth of containerized cargo of 20 percent could rise to 25 percent per year. Previous government forecasts have underestimated actual growth of container volumes, which could have a severe impact on the future planning of cargo transportation infrastructure.'

   McAdam said that although more than $4.5 billion has been earmarked for new port investments in Vietnam over the next five years, this must be matched by a similar amount to upgrade land transportation facilities.

   The APL executive said new investment should focus on the key cargo carrying origins of the southerly Ho Chi Minh City — which accounts for more than 70 percent of Vietnam's container throughput — and Haiphong in the north.

   'Congestion is a real problem in Ho Chi Minh City. There may be some relief once the first phase of new capacity comes on stream in 2009. But, if demand growth exceeds 25 percent, we will likely have serious undercapacity in the years ahead,” McAdam said.

   Ports in Vietnam are only able to handle relatively small vessels of 20,000 to 30,000 deadweight tons, and McAdam warned that the world’s transport providers might look elsewhere if the development of new deepwater ports is delayed due to uncoordinated planning and poor infrastructure.

   'If this doesn't happen, shipper, carriers, terminals and all other stakeholders in Vietnam's supply chain will potentially suffer, and production and sourcing could shift to other Asian origins,' he said.

   APL’s parent company, NOL, earlier this year published a research paper entitled Vietnam Transportation and Logistics: Challenges and Opportunities, of which a summary is available at: www.nol.com.sg/newsroom/07releases/070125_execsummary.pdf.