Sumitomo invests in logistics as production shifts to Vietnam

Jul 8, 2019. Japanese trading company Sumitomo has invested in a major Vietnamese port operator, Gemadept, aiming to seize growing demand for logistics services as manufacturers shift production to Vietnam amid the yearlong U.S.-China trade war.

Sumitomo teamed up with compatriot logistics company Suzuyo and a Japanese public-private fund specializing in infrastructure investment to take a 10% interest in Ho Chi Minh-based Gemadept. The trading house provided more than half of the roughly 4 billion yen ($37 million) the team paid to a local fund for the stake.

With demand for container shipments growing 7% annually in Vietnam, Sumitomo plans to build a logistics network connecting plants to ports for seamless export of Vietnam-made goods. Sumitomo is among the growing ranks of companies eager to cash in on the production shift away from China triggered by the trade war.

Gemadept owns six ports in Vietnam, handling 1.7 million containers for an over 10% market share. Sumitomo, meanwhile, operates three industrial parks in the Hanoi suburbs and owns a logistics unit in the country.

The tie-up will bring factories, logistics facilities and ports under Sumitomo’s management, allowing for greater efficiency and cost reduction. To that end, Sumitomo will develop a smartphone app that will enable truck drivers to reserve loading processes at ports and electronically handle other paperwork.

Tracking the movements of trucks will allow cargo to be loaded both ways. If all trucks carry cargo on both ways for the 150 km trip between Hanoi and Hai Phong, it would result in annual savings of $18 million, Sumitomo estimates.

At Hai Phong port, drivers generally have to wait one to two hours for cargo to be loaded onto ships. Such wait times average 12 minutes in Japan.


Posted: Jul 8, 2019 (Herb Cochran)

Congestion tackled at Cat Lai Port

Jan 30, 2018. Authorities have called for more measures to reduce traffic congestion at HCM City’s Cát Lái Port, District 2 and 9.

A representative of the HCM City Cargo Transportation Association added transport firms could save some billion đồng per day if traffic congestion was eliminated.

Cát Lái Port handles 89 per cent of total goods in the south and 50 per cent in Việt Nam.

In addition to a high volume of traffic, traffic flowing from perpendicular directions and narrow distances between traffic lights have made it challenging for drivers.

Incomplete road infrastructure has also contributed to traffic congestion, with ongoing constructions of Kỳ Hà 3 Bridge, a flyover and tunnel crossing Belt Road No 2, Đường added.

According to the Department of Transport, the tunnel project will be completed in two weeks and the flyover before April 30.



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Cat Lai seaport in danger of cargo congestion

Jan 13, 2019 Goods volume increase and scrap container stagnancy have posed a threat of cargo congestion at Cat Lai seaport in HCMC ahead of Tet Holiday.
HCMC Customs Department  reported that the volume of goods through the port has been much higher than normal.
Meantime, containers of scrap subject to import ban list are still being handled. Transport of these containers out from the port has been difficult because it will affect commodity circulation there.
Previously, the HCMC Customs Agency planned to examine 2,500 scrap containers stagnant at Cat Lai and Hiep Phuoc seaports.
So far, the agency has inspected 400 out of the 2,500 containers. Aside from that, about 110 containers of import goods are under special surveillance by authorized agencies and unable to pass customs clearance.
According to Saigon Newport Corporation, nearly 3,000 containers of goods have been left unown at Cat Lai seaport. Few hundreds of these have been opened for check according to regulation. The remaining ones have still been at the port, causing cargo congestion and limiting businesses’ ability of receiving goods.

Vietnam Transportation Infrastructure Feasibility Study (HCMC, Aug 2009)

Executive Summary.  The U.S. Trade and Development Agency (USTDA) provided grant support to Vietnam National Shipping Lines (Vinalines) to conduct the “Vietnam Transportation Logistics Feasibility Study”. The objectives of the study are to profile the existing processes, information systems and infrastructure for handling import and export containerized cargo, and to make recommendations for future improvements to reduce the costs and improve the security of containerized trade. Vinalines contracted with SSA Marine to conduct the study. A U.S. company, SSA Marine is a leading independent marine terminal operator with terminal operations in North America, Panama, Mexico, Chile, Costa Rica and New Zealand. In Vietnam, SSA Marine is participating in development of new container terminals at Cai Mep to serve the HCMC region and at Cai Lan in Northern Vietnam. Read more

Overloaded ports weigh down Vietnam

Vietnam’s over-burdened shipping infrastructure is taking a big toll on freight operations, with the peak port authority estimating the industry loses US$2.4 billion a year because it can’t reach the country’s best docks.

Cai Mep International Terminal (CMIT), 50 kilometers southeast of Ho Chi Minh City, the nation’s commercial hub, provides deep-water access for larger vessels with capacity of 18,000 20-foot equivalent units (TEUs).

But shippers prefer to use the far smaller Cat Lai Port, which is closer to the manufacturing districts of Binh Duong, Ba Ria-Vung Tau, Dong Nai and Ho Chi Minh City itself.

Containers must be offloaded onto more compact vessels at sea or transshipped through larger Hong Kong and Singapore ports so they can access Cat Lai, which creates delivery delays and hikes costs. Shipping through Hong Kong can add 30% to the cost of a container.

“If goods can be shipped with large vessels, goods owners can save US$200-US300 per container compared with small vessels,” Vietnam Port Association secretary general Ho Kim Lan told VietnamNet Bridge.

The association says the estimated losses of US$2.4 billion a year are based solely on the industry’s inability to access CMIT, which is operating well below its capacity while congestion steadily builds at Cat Lai. There is no effective road or rail infrastructure linking CMIT to Ho Chi Minh City.

Source: 10/1/2018