Waterway shipping: Low tariffs are still difficult to compete

It is necessary to combine planning from inland waterway port with ICD, connecting to inland deep sea port and large seaport outside estuaries. Photo: Huy Kham.

Lack of capital and inadequate planning

According to the report of Vietnam Inland Waterway Administration, the total investment for inland waterway infrastructure is still not commensurate with the existing potential of the sector, is unable to ensure complete transport infrastructure that can take charge of transport volume. For investment projects funded by the state budget, due to the limited investment capital, the projects often have to make investment phases, prolong the investment time, and some projects are approved, but not yet allocated capital to launch.

In addition, the mobilization of social capital to invest in infrastructure for waterways is also facing many difficulties, due to the characteristics of the industry, so it is not attractive to investors, with investors only interested in renovation projects and upgrades of river channels and estuaries (6/13 projects); projects on inland ports and wharves (32 projects) have not attracted investors.

Remarkably, according to the analysis of the Inland Waterway Administration of Vietnam, although the domestic inland waterway tariff is much lower than that of road transport, in fact, the total cost of freight by water cannot compete with road. The reason is that transportation time by inland waterway is 5 times longer than other types of transportation, especially by road. At the same time, freight rates may be higher than road transport for short distances.

Talking with the reporter of Customs Newspaper, appreciating the method of inland water transport, Mr. Phung Liem Anh, representative of Trung Dung Transport and Construction Trading Joint Stock Company, his business frequently transports stones to the provinces of the Mekong Delta by river, rarely transported by road or rail due to the high cost of loading and unloading. However, many mainstream transport routes still do not provide transportation facilities and depend on seasonal streams. In particular, according to Mr. Phung Liem Anh, freight rates by inland waterways are only competitive for items with large transportation needs, low value and long distances.

Remove knot on capital

According to Mr. Tran Do Liem, President of Vietnam Inland Waterway Transport Association, Chairman of Board of Directors of Rach Gam Cooperative, lack of capital and overlapping fees are the difficulties that inland waterway enterprises are facing. Most inland waterway vehicles are invested by local people or by commercial banks. Meanwhile, 80% of the waterway transport means are old, businesses are looking to replace but lack of capital is "bundle" the business.

According to Mr. Liem, inland waterway transport enterprises are also faced with overlapping charges such as business registration, vehicle registration, water, port, port charges, and long distance charges. This, in turn, wastes the potential of inland waterway transport.

Therefore, according to Mr. Liem, to promote inland waterway businesses to "break through", it is advisable to reduce unnecessary inspections on vehicles in transit to reduce costs and time for businesses. Simultaneously reduce the waterway inspection stations. In each province there should only be 1-2 checkpoints on a waterway and the distance between stations should be about 50km. In addition, it is necessary to combine planning from inland waterway ports with ICD, connecting to inland deep sea ports, large seaports outside river mouths, avoiding overlapping with some small seaports, and road systems should be synchronized with highway systems.

Regarding the legal policy, Mr. Liem said that there should be specific legal documents as a full legal basis, updating new feasible policies, creating confidence for investors for the initial deployment and people's support, building ports and terminals in the forms of BOT, PPP, BT and ICD.

In order to remove bottlenecks in capital, specific measures should be taken to encourage the development of medium - and large-sized shipping enterprises in the Mekong Delta and the Red River Delta in order to mobilize capital and equipment for ships, engines... or providing the long-term loans with preferential interest rates for bulk cargo, container transport with 100% new engine.