Supplying Fuel and Services to Mega Vessels: A Vision for HCMC

The Proposal: A Global Maritime Center

During a recent forum entitled “HCMC – A Regional Hub for High-Value, Advanced Service Industries,” Vu Ninh, a board member at Gemadept Corporation, made a compelling recommendation: Ho Chi Minh City (HCMC) should rethink its aspirations and aim to develop into a “global maritime center” rather than just a hub for warehousing and logistics. This shift could enhance HCMC’s role in the maritime sector, attracting various high-value services.

Learning from Global Leaders

Ninh drew comparisons with Singapore’s PSA port hub, which is a major contributor to its economy, accounting for 7% of its GDP. He pointed out that local port operators in Vietnam, including Gemadept and Saigon Newport, primarily focus on basic cargo handling. However, in today’s competitive maritime landscape, HCMC has the potential to offer much more.

“Can we supply fuel to these mega ships? Can we provide financial services for the cargo onboard?” Ninh asked, emphasizing the need for high-value services that could support HCMC’s burgeoning maritime ambitions. He posited that establishing a maritime center would complement the proposed international financial center in HCMC as mandated by a recent National Assembly resolution.

A Strategic Geographical Advantage

Ninh stressed the advantageous geographical positioning of HCMC, which boasts a cargo volume in the Southeast region of about 26 million TEUs (Twenty-foot Equivalent Units) when excluding transshipment. This volume serves as a solid foundation for establishing a global maritime center, which could serve both domestic needs and international shipping routes.

Enhancing Port Connectivity and Capacity

In the short term, Ninh proposed a unified network for the Cai Mep – Thi Vai port cluster. Currently, these terminals operate independently, but a coordinated effort could maximize their capacity and efficiency. Long-term strategies could involve collaboration among major enterprises to lay down a roadmap for creating this global maritime center, a goal that Gemadept is eager to contribute to.

Gemadept also manages a network of seaports and inland container depots (ICDs) throughout Vietnam, including Gemalink, a state-of-the-art deep-water port capable of accommodating some of the largest vessels in the world.

HCMC’s Maritime Edge Over Rivals

Dinh Xuan Khanh, Director of the Logistics Services Center at Saigon Newport Corporation, highlighted that the former port area of HCMC processes around 7 million TEUs each year. The Cai Mep – Thi Vai cluster matches this volume, putting HCMC in a strong position within the regional logistics landscape. Following recent administrative mergers, HCMC’s annual throughput could rise to about 14 million TEUs, with projections suggesting it might reach as high as 26.57 million TEUs by 2030.

Attracting Transshipment Cargo

Despite these impressive figures, the city’s maritime logistics sector still has considerable room for growth, especially in attracting transshipment cargo, instead of just catering to current import-export needs. For instance, Sihanoukville Port in Cambodia can only serve smaller vessels, thus forcing many shipments to go through Singapore or Thailand’s Laem Chabang port.

Khanh indicated that there’s a real opportunity for HCMC to capture this transshipment volume. The cost-effective and shorter route from Sihanoukville to Cai Mep – Thi Vai port for onward shipping to the U.S. is an attractive proposition for shippers.

Infrastructure Development and Integration

To capitalize on its maritime advantages, HCMC will need to invest in better integration among its seaports, logistics hubs, and various transport systems, including land and waterways.

Insights from the Vietnam Maritime and Inland Waterways Authority indicate that the costs of maintaining waterways are significantly lower than those of road infrastructure. By enhancing inland waterway transport, HCMC could alleviate some of the strain on its road systems, allowing for more efficient movement of goods.

Khanh noted that around 70% of the 7 million TEUs processed at Cai Mep – Thi Vai are transported by water to HCMC. Continued reliance on older inland container ports could contribute to rising road congestion, a situation that needs addressing.

Innovative Solutions for Logistics Zones

One suggested avenue for reducing road congestion is to utilize land along the upper stretches of the Dong Nai and Saigon rivers for developing post-port logistics zones. Areas such as Cu Chi Port and An Tay are well positioned to accommodate large-capacity barges, enhancing connectivity and easing traffic issues.

The commitment to improving inland waterway transport is being recognized at high levels. Currently, projects like raising the Binh Trieu Bridge to accommodate barges carrying multiple container layers demonstrate the city’s determination to enhance cargo transport efficiency.

A Call for Collaboration and Synchronization

During discussions, Bui Ta Hoang Vu, Director of HCMC’s Department of Industry and Trade, acknowledged that the current logistics network lacks coordination. To move towards the goal of becoming a global maritime center, he recommended forming a specialized research group to develop a comprehensive project for submission to the central government.

Deputy Chairman of the HCMC People’s Committee, Nguyen Van Dung, expressed interest in the proposal, highlighting that while other localities in Vietnam have significant ports, the concept of a global maritime center remains a novel and ambitious venture for HCMC.

By acknowledging its strengths and collaborating on strategic initiatives, HCMC could soon emerge as a key player in the global maritime industry, tapping into a wealth of economic opportunities.