What caused the suspension of international container shipping through Cua Lo port?

Efforts to restore the line

In May 2022, the international container shipping route through Cua Lo port reopened after several years of interruption, following numerous efforts by various levels of government, the Nghe Tinh Port Authority, the Vietnam Maritime Corporation, and the Bien Dong shipping company. With this route, goods from the Central region are now directly connected to Port Klang (Malaysia) and Kolkata (India) in the shortest time and at the best cost. From Kolkata, goods are then transported to various states in India and to Chittagong port (Bangladesh).

Large ships entering Cua Lo port. Photo: Tran Chau

This event is of significant importance to import and export businesses in Nghe An province, and also demonstrates professionalism in transportation and improves the investment and business environment.

However, since April 2023, international container shipping through Cua Lo port has been suspended. Our investigation revealed that, in addition to the high fuel prices which significantly increased shipping costs, one of the key reasons is the lack of direct incentives for shippers and ship owners, unlike in other provinces.

A stone exporting business in Nghe An said: "Business is getting increasingly difficult these days, so every penny saved is a penny earned. From Quy Hop district, we take Highway 36 to Hoang Mai town and then to Nghi Son port (Thanh Hoa), which is more convenient. For a 20-foot container passing through Nghi Son port and declaring customs in Thanh Hoa, we receive a subsidy of 2 million VND, and for a 40-foot container, we receive a subsidy of 3 million VND. Meanwhile, transporting goods from Nghe An to Cua Lo is both far and lacks any subsidies..."

Further information revealed: Since July 2022, Thanh Hoa province has issued a policy to support international and domestic maritime transport, assisting businesses transporting goods by container through Nghi Son port. Accordingly, shipping companies operating international container routes through Nghi Son port that are licensed and required to unload goods at Nghi Son port will receive a subsidy of 500 million VND per trip. Domestic maritime transport vessels transporting containers through the port will receive a subsidy of 300 million VND per trip.

Thanh Hoa province has also issued a policy to support businesses transporting goods by container through Nghi Son port. The support levels are as follows: 2 million VND/container for 20-foot containers; 3 million VND/container for 40-foot containers. For containers without customs declarations, the support is 700,000 - 1,000,000 VND/container.

In Ha Tinh province, there is also a policy to support shipping companies transporting international containers through Vung Ang port, with a support level of 200 million VND per trip. For businesses, organizations, and individuals transporting goods by container through Vung Ang port, a 20-foot container receives a support of 700,000 VND/container; a 40-foot container receives a support of 1,000,000 VND/container. Thua Thien Hue province also has a similar policy...

Continue to improve the investment and business environment.

Welcoming major shipping companies to Nghe An. Photo: Tran Chau

Over the years, Nghe An has strived to improve its investment and business environment, innovating its methods of serving businesses and investors. It has expanded its seaports, invested in airports, and built convenient transportation routes connecting key regions. In the last two years, several component indicators of Nghe An's PCI (Provincial Competitiveness Index) have shown significant improvement, such as: Transparency; Informal Costs; Dynamism and Pioneering Spirit of Local Government; Legal Institutions and Security and Order; and Fair Competition. Nghe An's PCI score in 2022 reached 66.6 (an increase of 1.86 points compared to 2021), climbing 7 ranks in the ranking compared to 2021, a testament to the province's efforts. Nghe An is currently among the top 10 provinces attracting the largest number and capital of FDI projects nationwide, and many more projects are continuing to arrive. Opening up seaports and facilitating the logistics chain are urgent requirements for secondary investors in industrial zones to access and utilize Nghe An's seaport system. However, Nghe An still faces many challenges and needs to make improvements.

Regarding this issue, Mr. Bui Kieu Hung, General Director of Nghe Tinh Port Joint Stock Company, said: Nghe Tinh Port has made efforts to coordinate with Vietnam Maritime Corporation and international shipping lines to reopen the aforementioned route.

The port has also stepped up marketing and promotion of its routes, ensuring that long-standing container businesses will no longer need to use other ports. Supporting international and domestic shipping companies transporting container cargo within the area will benefit all ports in Nghe An, such as Vissai, Vietsun, Nghe Tinh, and Dong Hoi. Therefore, Nghe Tinh Port is striving to serve shipping lines and cargo owners, using its long-standing reputation and brand to compensate for any losses incurred by businesses transporting goods through the port.

Therefore, despite the difficulties, the port is still maintaining its long-standing traditional partners, but in the current context, if policies in the region differ, businesses will choose locations that do a better job of attracting investment.

Mr. Nguyen Quoc Khanh - Director of Cua Lo Port One-Member Limited Company (Vietsun Port) also stated: "As a port operating enterprise and a container shipping company, we have observed that the investment environment in our province still has some unfavorable aspects, such as the issue of fishing boats frequently encroaching on the port and cargo ships, causing inconvenience for cargo ships and affecting security and order. Furthermore, the transportation, control, and inspection systems are still too complex…"

Mr. Le Tien Tri, Director of the Southeast Economic Zone Management Board, believes that policies supporting import and export businesses and container shipping companies are necessary because they promote production, boost import and export, attract investment, and improve the business investment environment.

Loading and unloading containers at Cua Lo port. Photo: Tran Chau

It is understood that the Southeast Economic Zone Management Board is currently seeking feedback on policies to support shipping companies in opening container shipping routes and to support businesses with goods transported by container through Cua Lo port, Nghe An province.

Nghe An invests in airport and seaport infrastructure. Photo: Nghe An Newspaper archives.