A STUDY ON VIETNAMESE CONTAINER PORTS: ANALYSIS, EVALUATIONS, AND SUGGESTIONS Authors: Quynh Lam Ngoc LE Ngoc Hien DO Tae Won KIM Ki Chan NAM
CONTENT Introduction Container volume forecasting and discussions SWOT analysis Proposed alternatives Conclusions 2
Introduction (1) Containerization has revolutionized cargo handling and shipping. World scale: 1956: first 58 containers were carried by vessel 2006: 452 million TEUs (IAPH, 2006) Vietnam: 1995: 519,387 TEUs 2007: 3.7 million TEUs 3
Introduction (2) Forecast container volume and discuss SWOT analyze Propose alternatives Conclusions 4
Container volume forecasting and discussions Container volume forecasting Discussions 5
Container volume forecasting Container volume via Vietnam ports (1,000 TEUs) 6
Container volume forecasting - Vietnam (2) MAPE = 3.8591 MAPE = 3.424 MAPE = 6.404 MAPE = 29.401 7
Container volume forecasting - Vietnam (3) 8
Container volume forecasting - South (4) 9
Container volume forecasting and discussions Container volume forecasting Discussions 10
Discussions (1) Annually average growth rate Vietnam ports: 15.8% HCMC ports: 17.7% 11
Discussions expected capacity and volume in the South (2) Port 2006 2007 2008 2009 2010 2011 2012 2013 2014 Saigon 240 300 300 300 - - - - - Saigon New 1,400 1,570 1,640 1,830 2,130 2,130 2,130 2,130 2,130 Ben Nghe 190 200 200 200 - - - - - VICT 450 550 750 900 900 900 900 900 900 ICD Phuoc Long* 250 250 250 250 - - - - - Hiep Phuoc P&O Ports* 200 400 800 1,000 1,200 1,200 1,200 Cai Mep, ODA* 525 1,050 1,050 1,050 Cai Mep, SSA* 250 525 1,050 1,050 1,050 Cai Mep, APMT* 525 1,050 1,050 1,050 1,050 Cai Mep, New Port* 300 500 750 1,000 1,250 1,500 Cai Mep, PSA* 250 500 1,000 1,000 1,000 Cai Mep, Gemadept* 500 1,000 1,500 Total Capacity 2,530 2,870 3,340 4,180 5,355 7,380 9,880 10,630 11,380 Expected Volume 2,473 2,780 3,215.13 3,784.33 4,454.29 5,242.86 6,171.04 7,263.54 8,549.46 Surplus/Deficit 57 90 124.87 395.67 900.71 2,137.14 3,708.96 3,366.46 2,830.54 12
SWOT analysis of container ports Strengths Weaknesses Opportunities Threats 13
SWOT analysis Strengths (1) Geographical conditions Interlacing system of river and ditches: 40,998 km Coastline: 3,444 km (excluding islands) Convenience location on the world marine routes Suitable places for deep-sea ports building (14 25 m) 14
SWOT analysis - Strengths (2) Container volume has increased continuously Facilities: some ports are equipped with modern and specialized facilities 15
SWOT analysis Weaknesses Port infrastructure and superstructure: Old and out of date. Limitation of modern and specialized equipments Mixed use of port s facilities Inadequate information technology and operating systems Development of dedicated container ports is lagging behind growth rate of container volume. High port costs/port charges Most of current ports are located along rivers and inner big cities Limitation of depth Limitation of hinterland Traffic congestion at big cities 16
SWOT analysis - Opportunities % US$ billion Economic growth rate Foreign Direct Investment -Economic growth -FDI -Imports/Exports -Political environment 17
SWOT analysis - Threats Transportation infrastructure: Poor road conditions Old railway system Railways are not connected directly to ports and currently are not used for transporting container cargoes. 18
SWOT analysis Summary High growth rate on container volume High demand on modern and specialized port facilities High demand on infra- and superstructures of ports and landside. Besides, Need suitable strategies to improve ports competitive capability Need to attract more and more cargo volume 19
Proposed alternatives Co-opetition Privatization Regionalization Specialization Infrastructure development 20
Proposed alternatives Co-opetition Co-opetition: a mixture of competition and co-operation strategies (D.W. Song, 2003) Benefits Cost saving Shared investment so risk sharing Port expansion so market penetrating Improved and utilized capacity Stronger bargaining power Enhancing customer services Increase profits Vietnam: co-opetition among/with Domestic ports Foreign counterparts 21
Proposed alternatives Co-opetition Privatization Regionalization Specialization Infrastructure development 22
Proposed alternatives Privatization Disadvantages of current system: Inflexibility Inefficiency High costs Low service quality Privatization: increase the level of private sector Navigation services Stevedoring services Added value services Benefits Lower port costs Share investment Reduce cost of public sector Increase efficiency Speed of development of new container terminals Expand trade Increase revenue Management expertise 23
Proposed alternatives Co-opetition Privatization Regionalization Specialization Infrastructure development 24
Proposed alternatives Regionalization Benefits: Enhance logistics integration Reduce logistics costs Broaden hinterland Shorten transit time 25
Proposed alternatives Co-opetition Privatization Regionalization Specialization Infrastructure development 26
Proposed alternatives Specialization Benefits Increase efficiency Easy to modernize Optimized ship schedule plan Optimized labor plan Optimized inventory and warehouse systems 27
Proposed alternatives Co-opetition Privatization Regionalization Specialization Infrastructure development 28
Proposed alternatives Infrastructure development Benefits Ameliorate inland traffic Broaden hinterland Improve port competitive power 29
Proposed alternatives - Summary Co-opetition Privatization Regionalization Specialization Infrastructure development Cost saving Shared investment, risk sharing Port expansion market penetrating easily Improved and utilized capacity Stronger bargaining power Enhancing customer services Increasing profits Contributing to welfare 30 of the economy Lower port costs Sharing investment Reduce cost to public sector Increasing port efficiency Speed of development of new container terminals Expand trade Increasing revenue Management expertise Enhancing logistics integration Reducing logistics costs Broadening hinterland Shorter transit time Increasing efficiency Easy to modernization Optimized ship schedule plan Optimized labor plan Optimized inventory and warehouse system Ameliorating inland traffic Broadening hinterland Improving port competitive power
Conclusions Strong revolution on container volume (1995 2007: 700 %) Continue growing in the next few years: Whole country: 15.8 % annually South part: 17.7 % annually SWOT analysis shows: Internal and external factors which are helpful and/or harmful to container port development Alternatives are proposed for the future development However, the forecast should be revised year by year Multi-factor forecasting methods should be applied for more accurately results. 31