Urgently reducing congestion and facilitating logistics at Cat Lai port

The volume of goods at Cat Lai port is increasing day by day. Photo: T.H

Cat Lai Port is overloaded

Assessing the current situation of goods passing through HCM City’s ports, Ann Marie Yatishock, Director of the United States Agency for International Development (USAID) in Vietnam said that about 4.9 million 20-foot containers are handled in HCM City each year, equivalent to about three million trucks traveling in and around the city to load and unload containers from the port area. Among them, Cat Lai port handles more than 92% of this volume and about 50% of the country’s total container volume. “Therefore, alleviating congestion at Vietnam's ports become more and more important as trade gradually recovers after the pandemic. The pre-feasibility study at Cat Lai port has proposed an action plan for this Vietnam’s busiest container port with the goal of helping it to handle the increase in container volume," said Ann.

Sharing the same view, Claudio, USAID TFP project manager, said that Cat Lai port has exceeded its design capacity by 2.5 million Teus, while in 2020, the capacity of Cat Lai exceeded five million Teus; the wharf utilization rate is high, exceeding 90%, while this rate in the world is only about 70-80%. It is predicted that the volume of containers passing through Cat Lai port will double by 2030, putting tremendous pressure on the existing system and infrastructure. The expected commercial growth for the entire port system will have concrete and significant impacts on Cat Lai, so improvement measures are urgently needed.

Each year, on average, the Customs sub-department of Saigon Port border gate area 1 carries out customs clearance procedures for import and export goods with a total turnover of about US$30 billion; State budget revenue reached VND40,000 billion. Additionally, the unit also carries out supervision procedures for 35,000 import-export goods declarations of enterprises opening customs declarations at other local customs units. With such a large quantity of goods, the Customs sub-department of Saigon Port border gate area 1 has completely applied electronic procedures; it is equipped with five cargo container scanning devices by the General Department of Customs.

Along with that, the sub-department has implemented the Trade facilitation scheme at Cat Lai port. It helps businesses save customs clearance time, reduce costs, enhance the role of customs clearance agents, reduce congestion at Cat Lai port, and especially improve business efficiency at the port.

According to USAID’s research results, an average of 16,400 trucks arrive at Cat Lai port every day. They may have to wait for 2-3 hours before reaching the port, causing traffic jams along the roads leading to the port. If lined up, these 16,400 trucks would span up to 322 km. With the expected container growth rate of Cat Lai port, solving congestion becomes even more urgent.

With a large number of goods, experts said that the specialized inspection of import and export goods by the ministries, which has not been improved, also prolonged the time for customs clearance of goods through ports, including Cat Lai port.

A series of solutions and recommendations

The report outlined 21 recommendations in three groups to reduce congestion and facilitate logistics at Cat Lai port. The recommendation group suggest technical improvements, which is detailed and practical, and can be implemented immediately for good results. Specifically set up waiting areas near Cat Lai port for trucks to support activities at the gate at night would increase the usability of ports at Cat Lai port and reduce congestion; widening the number of lanes and the parking spots in front of the gate would also reduce congestion immediately without huge investment; as would specialized lanes to shorten handling time at the gate and especially waiting time outside the gate, in the direction of setting up special lanes for empty container trucks, “quick lanes” for pre-cleared containers, and “problem lanes” for containers that need to be paid or inspected.

There is a recommendation group working on applying technology and data mining solutions to improve management efficiency. Specifically, optical character recognition (OCR) equipment and RFID readers are arranged at the Cat Lai port. This solution will reduce processing time at the gate by installing an OCR device and an RFID reader to automatically recognize truck number plates, container numbers, and damage to containers; and installing Webcam Video Cameras to transmit real-time video images of traffic conditions on roads leading to Cat Lai port. This will allow transport companies to know traffic conditions and adjust their schedules to avoid congestion on the way to the port, thereby reducing queues at the port as well as traffic on the roads leading to the port. Currently, low-risk containers can be cleared before landing at Cat Lai port, but they are mixed with uncleared containers, so it is not easy to release from the port. Finally, there is the recommendation group of effective monitoring and evaluation. Specifically, building a system of indicators to measure port performance and a national port management information system.

However, to synchronously improve Vietnam's seaport infrastructure in general and Cat Lai port in particular from now to 2030, the USAID-funded trade facilitation project research team estimated that it needs a huge total budget of VND313 billion. Therefore, according to experts, besides capital from the State budget, it is necessary to have policies to attract investment capital from businesses and other sources in the form of public-private partnerships.

According to Nguyen Phuong Nam, Deputy General Director of Saigon Newport Corporation, based on the above recommendations, to improve the operational efficiency of Cat Lai port, HCM City needs to adjust the seaport planning in the direction of increasing the area for port operation services and out-of-port logistics. Simultaneously, the construction progress of Cat Lai Logistics Center (60-100ha) must be sped up, which is the general warehouse for distribution of goods for the entire HCM City port cluster, connecting to Cai Mep - Thi Vai deep-water seaport.

Ann Marie Yastishock, Director of the US Agency for International Development in Vietnam: Import and export goods through Cat Lai port will continue to increase in the future.

Import-export goods through Cat Lai port – one of the largest seaports in Vietnam – is increasing and is expected to continue to do so in the future. Therefore, solving congestion at Cat Lai port is a top priority.

After more than a year of implementation, the project has comprehensively reviewed the port operations on an area of 160 hectares and customs procedures at the port to assess the operational efficiency, bottlenecks, and obstacles in the process of increasing the port's cargo handling capacity. Thereby, 21 recommendations were made in the form of an action plan for local authorities and relevant agencies to consider.

These recommendations range from leveraging information technology solutions to enhance information flows and cargo clearance to locating or expanding port infrastructure and improving operational efficiency. Additionally, through the USAID INVEST project, USAID is working with the Vietnam Maritime Administration and the Ministry of Transport to consider potential areas for public-private partnership, an effective way to mobilize investment for large-scale infrastructure projects. This effort reaffirms our commitment to assist the Government of Vietnam in facilitating trade and investment and enhancing the country's competitiveness.

Nguyen Phuong Nam, Deputy General Director of Saigon Newport Corporation: there will be a storage yard outside the port to implement the recommendations

Of the 21 recommendations, there are two related recommendations that are focused on by Saigon Newport Corporation. They are the recommendation on the solution of cargo yards outside the port and the application of information technology in services at the port.

In the past years, Saigon Newport has been interested in developing cargo yards outside the port, but the implementation has been slow due to procedural problems. The current throughput capacity of the port is 6.5 million Teus/year; with an average of 6.37 days/container of imported goods. If allowed by authorities, Saigon Newport will have a storage area outside the port to implement the experts’ recommendations made in the research report. This solution has been implemented in many countries around the world to store empty containers, facilitating trade.

Au Anh Tuan, Director of the Customs Supervision and Administration Department - General Department of Customs: set up a customs clearance center at Departments instead of at branches.

Regarding recommendations related to renting yards outside the port to release goods, the Customs authority has a removal mechanism for Cat Lai port in each specific time. For example, when the Covid-19 pandemic was complicated, Cat Lai port was at risk of congestion, the General Department of Customs promptly removed it for the port and specified it in Circular 82/2021/TT-BTC of the Ministry of finance.

Currently, the Customs sector is implementing the Digital and smart customs project. Accordingly, the Customs office will set up a customs clearance center for goods at departments instead of at branches. Along with that, the Customs sector is implementing Decision 38/2021/QD-TTg dated January 12, 2021 of the Prime Minister approving the project on "Reform of quality and food safety inspection model for imported goods” with seven strong reform contents to facilitate businesses. Presently, 60-70% of goods are subject to specialized inspection at Cat Lai port. The General Department of Customs is coordinating with the Ministry of Industry to review and cut manual procedures, and reduce specialized inspection procedures.

Hoang Hong Giang, Deputy Director of Vietnam Maritime Administration: Develop a dedicated barge berth at Cai Mep port to connect goods by waterway

Regarding the recommendation on increasing the capacity of barges to transport containers on the inland waterway route connecting Cai Mep - Thi Vai area with seaports and inland customs clearance facilities in HCM City and Mekong Delta, the Vietnam Maritime Administration develop a dedicated barge berth at Cai Mep port to connect cargo by waterway, and develop a barge system with an increasingly large capacity.

Cai Mep port is the largest deep-water gateway port in the country with a designed capacity of 6.37 million Teus/year. The cargo throughput in 2021 reached 8.35 million Teus, exceeding the designed capacity. Cargo connections to the port are mainly through barges by waterway. The barge development project at Cai Mep port has five container berths. Thus, with the current growth rate of the port, the development of a dedicated barge berth will meet the increasing demand for freight transport, reducing the load on the main port, and improving the logistics efficiency for the HCMC and Cai Mep areas. The Vietnam Maritime Administration is focusing on improving barge transportation services to transport goods from Cat Lai to Cai Mep - Thi Vai seaport system to reduce the load on Cat Lai port.