New deep-sea port to boost logistics capacity in Vietnam

The city is a major sea gateway for Vietnam, but the existing port cannot receive large container ships as it lies on the Cam River, which is only seven meters deep, the Nikkei said in a report on May 5.

The new Lach Huyen International Gateway Port faces the sea, where the water is 14 meters deep.

It stretches 750 meters (2,460 feet), which is double the length of Hai Phong Port, and has two container cranes.

Work started on Lach Huyen Port in 2013 at an estimated cost of US$1 billion, and when the first phase is completed on May 13, it will be able to handle around 300,000 20-foot equivalent units, or TEUs, according to the Nikkei.

That figure will rise to between 2-3 million TEUs in 2019, which is double the current capacity of Hai Phong Port.

At a ceremony to mark the construction of Lach Huyen’s second phase in 2016, Prime Minister Nguyen Xuan Phuc said the new port “holds a key role in Vietnam’s maritime strategy”.

Infrastructure to support the operation of the port has been taking shape, including an expressway connecting Hai Phong with the capital Hanoi that cuts travel time by half to roughly 90 minutes, and Southeast Asia’s longest cross-sea bridge, which opened to traffic in September last year.

Spanning 15.63 kilometers (10 miles), the US$523-million bridge connects Tan Vu Port to the new Lach Huyen Port.

At a government meeting in Hanoi last month, PM Phuc said Vietnam’s logistics costs are putting a strain on local businesses and need to be cut in order to make firms more competitive.

Vietnam’s logistics costs accounted for 20.9% of GDP in 2016, according to the World Bank, and were higher than regional peers China, Thailand and Japan.

The reason for this is the cost of transporting goods via land, he said.

In Vietnam, transportation accounts for 59% of all logistics costs, Deputy Minister of Industry and Trade Nguyen Van Cong told the meeting.

The cost of transporting a 40-foot container by land from Hanoi to Ho Chi Minh City is about VND40 million (US$1,785), which is 9.7 times more than transporting it by water and 2.5 times more than moving it by train, he said.

According to a 2016 report released by the ministry, 77.2% of goods are transported by land in Vietnam, while just 5.22% go via water and 0.42% by train.