Seaport competitiveness: Why is Nghe An ahead and behind?

From advantages to limitations

Dredging vessels dredge the estuary of Cua Lo port to maintain the depth of around 9 m to facilitate the entry and exit of large-tonnage ships. Photo: Nguyen Hai

According to the report of the Department of Transport, Ministry of Transport, despite the difficulties caused byCovid-19 pandemiccaused, in recent years, maritime transport and seaport logistics services have still developed and promoted effectively; shown through the quantity of goods transported by sea constantly increasing. Specifically, the quantity of goods transported by sea still increased by 5% compared to the same period last year; goods turnover increased by 2%; the volume of goods passing through seaports increased by 4%; the number of ships with foreign flags passing through increased by 9%; the number of ships with Vietnamese nationality passing through increased by 2%...

Regarding the Logistics Performance Index (LPI) published by the World Bank (WB), Vietnam ranked 39th out of 160 countries participating in the survey. In the ASEAN region, Vietnam ranked 3rd after Singapore (ranked 7th) and Thailand (ranked 32nd), achieving the target set by the Prime Minister in Decision No. 200/QD-TTg.

(According to the report of Nghe An Department of Industry and Trade)

Ships over 20,000 tons dock at Cua Lo port to unload cargo. Photo: Nguyen Hai

Over time,freight rates increasedue to having to bear many costs related to Covid-19 inspection and prevention procedures. In addition, Vietnam still lacks large enough businesses to coordinate the source of containers going in and out, leading to a shortage of empty containers. It is unreasonable for businesses using Vietnamese sea transport services to have to pay container fees for both going in and out (even though there is no cargo) without anyone standing up to connect and take responsibility.

In Nghe An, Cua Lo port in particular and the ports under Nghe Tinh port in general are units that participate quite early in maritime transport services, more or less creating an advantage compared to other ports in the region. However, since switching to the new mechanism, due to the lack of advantages of a natural deep-water port and limited resources for investment in upgrading infrastructure, competitiveness has significantly declined. The statistical report of the Ministry of Transport in September 2021 said: In the past 5 years, the volume of goods handled and unloaded through ports in the Central region has been increasing, but the rapid increase mainly belongs to Vung Ang port (Ha Tinh) and Nghi Son port (Thanh Hoa).

Fishermen's fishing boats anchoring at Cua Lo cargo port is a minus point in terms of port services because of the high risk of occupational safety. Photo: Nguyen Hai

A representative of a water transport enterprise at Cua Lo port said: The current situation of "difficulties limit intelligence" has caused Nghe An maritime transport to be stuck in a vicious circle, lagging behind. Due to the lack of resources for infrastructure investment, loading and unloading capacity has not been increased, the waterway is silted, making it difficult for large-tonnage ships to enter/exit and turn around; due to lack of incentives in terms of warehouses, the number of ships and goods exported/imported through has increased little, meaning that revenue and profit are not much, so there is a lack of resources to reinvest in infrastructure and equipment at the port. In addition, in the past 2 years, due to the impact of the Covid-19 epidemic, sea freight rates have also increased by 5-7%, making it even more difficult for businesses that are already in difficulty.

Nghe An seaport is in the master plan to connect with other countries, qualified to build a Logistics Service Center for the entire North Central region. Photo: Nguyen Hai

In addition to the above limitations, some businesses that transport goods through Cua Lo port also reflect that the reason for not wanting to transport goods through this port is due to unprofessional logistics services and service quality. Currently, the port is not a logistics service hub to connect businesses, especially international transport with the port in terms of time and convenient entry and exit procedures.

Determined to invest and create change

Faced with the above shortcomings and limitations, on August 27, 2021, based on Decision No. 200-QD/TTg dated February 14, 2017 approving the Action Plan to improve competitiveness and develop logistics services by 2025 and Decision No. 221/QD.TTg amending and supplementing Decision No. 200, the Provincial People's Committee issued Plan 496/KH to improve competitiveness and develop logistics services in Nghe An by 2025.

Accordingly, Nghe An strives to increase the contribution of the logistics service industry to GRDP to a fairly high level in the North Central region by 2025 and increase the rate of outsourcing logistics services, reduce the cost of using logistics services; attract and socialize investment in logistics infrastructure, mobilize all resources to the maximum, and attach importance to domestic resources to develop and complete infrastructure of seaports, airports, warehouses and roads.

Vissai Port (Nghi Thiet-Nghi Loc) put into operation in October 2017. Photo: Manh Hung

With Plan 496/KH, Nghe An has calculated and planned long-term to support the development of logistics services and maritime transport in the province. Before Resolution No. 36 of the National Assembly on piloting a specific mechanism for Nghe An and some other provinces, Nghe An identified seaport infrastructure and logistics services as bottlenecks, hindering the province's capacity to develop industry and services, so now it must be even more determined. The problem is that the province needs to calculate a roadmap to mobilize and concentrate resources to build essential infrastructure items to put into use as soon as possible.

Mr. Hoang Minh Tuan - Head of Import-Export Management Department, Nghe An Department of Industry and Trade

As we know, to complete the seaport infrastructure, connect with railways, roads, and airlines, besides that isLogistics service centerIn the North Central region in Nghe An, the province needs large investment resources, in which the main items are the construction of Cua Lo deep-water port for ships over 30,000 tons to dock; 20-hectare logistics center in the Southeast Economic Zone; investment in the construction of Nghi Long railway station; expansion of Vinh international airport. Along with completing the North-South expressway in the East through Nghe An, the Nghi Son - Cua Lo coastal national highway must be completed...

In the Dong Hoi area, apart from the road connecting from National Highway 48D (Route 36) to the sea, there is almost no infrastructure in Dong Hoi port, making it difficult to attract investment and develop logistics services in the Industrial Park Cluster in the North. Photo: Nguyen Hai

In addition, the province's current logistics warehouse enterprises must also improve their service capacity; invest in equipment and machinery to apply smart technology to production and provide closed logistics services. While waiting for large-scale logistics service enterprises with business capacity to invest in production, more than anyone else, enterprises in the area providing logistics services in the province are the focal point that clearly understands the procedures for loading and unloading goods through the port, so they need to boldly stand up and connect to provide services./.

Planning map connecting Nghe An's seaport with regional and international ports. Photo by Nguyen Hai