When will the international container shipping route through Cua Lo port be reopened?

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The international container ship BIENDONG MARINER docked at Cua Lo Port to Port Klang (Malaysia) - Kolkata (India) - Chittagong (Bangladesh) on the morning of September 22, 2022. Photo: Thu Huyen

Reasons

Thanks to many efforts of all levels, departments and branches of Nghe An province and the support of Nghe Tinh Port Joint Stock Company, Vietnam National Shipping Lines, and East Sea shipping line, in May 2022, the international container shipping route through Cua Lo port have been reopened after several years of interruption due to the impact of the Covid-19 epidemic.

According to the representative of Nghe Tinh Port Joint Stock Company, the reopening of the international container transport route through Cua Lo port has an important meaning for the import-export enterprises of Nghe An province, and at the same time shows professionalism in transportation, improves the business investment environment. Especially since opening this route, goods in the Central region are directly connected to Port Klang (Malaysia) and Kolkata (India) with the shortest time and best cost. Specifically, from Kolkata, goods will be transported to the states of India and the port of Chittagong (Bangladesh).

According to Nghe Tinh Port Joint Stock Company, in the last 3 years, container cargo through the port is still small and unstable, accounting for 30-40% of the total cargo through the port and tends to decrease (from 1.63 million tons in 2020 to 1.3 million tons in 2022) and imbalance between outgoing and incoming goods. On the other hand, this imbalance may affect the two-way cargo exploitation of shipping lines to reduce costs and maintain regular operations.

However, up to now, attracting international ships to Cua Lo port is still "running aground", even gradually thinning out container shipping companies in the past few years. Remarkably, from April 2023, the international container transport route through Cua Lo port was stopped again, resulting from the petrol and oil price escalation and the lack of synchronous policy and direct incentives for shippers and ship owners like other provinces.

According to Mr Pham Van Tam, Director of Tan Long White Stone Company (Nghe An), so far, businesses have opened export declarations in Nghe An but still have to carry out procedures to open additional export declarations in Thanh Hoa, specifically through Nghi Son port, because Nghi Son port facilitates businesses with a more open mechanism.

According to the share of some furniture export enterprises in Nghe An, the business activities of most businesses are facing difficulties. However, transporting export goods to Nghi Son port (Thanh Hoa) will benefit them much because a 20-foot container through Nghi Son port which opens a customs declaration in Thanh Hoa, will be supported by 2 million VND, a 40-foot container will be supported by 3 million VND while in Nghe An. Meanwhile, transport to Cua Lo is both far and without support.

Currently, there are only 3 "traditional" shipping lines that are exploiting and transporting container goods with a tonnage of less than 1,000 TEU inland, including Vietsun, GLS, and VIMC Line, which are operating transhipment from Cua Lo port to Ho Chi Minh port and vice versa. VIMC Line operates international containers directly from Cua Lo - Kolkatar (India) - Chittagong (Bangladesh) with a limited frequency of only 1 trip/month and stopped at 7 trips/year in April 2023.

East Sea Shipping Limited Company, who opened a container ship transport route directly from Cua Lo port to Kolkata (India) - Chittagong (Bangladesh), said, compared to the time of opening the route about a year ago, freight rates from Vietnam to India have decreased by 60-70%, hitting businesses severely, so they have to find other exploitation options. Although shipping lines and port enterprises have exchanged regularly, they still cannot maintain the transport route.

Many businesses want to support some costs as some localities (Thua Thien Hue, Thanh Hoa, Ha Tinh) have done to lift the burden on ship owners, creating leverage to attract shipping lines and import-export enterprises through Cua Lo port.

Waiting for policy

Over the years, Nghe An province has made efforts to improve the business investment environment, innovate how to serve businesses and investors, invest, renovate many seaports and airports, build convenient traffic routes, and connect key regions. In 2022, PCI Nghe An surpassed 7 places in the Ranking compared to 2021, a testament to the province's efforts. Remarkably, Nghe An province is currently in the top 10 provinces attracting the country's largest number and capital of FDI projects.

As the representative of Nghe Tinh Port Joint Stock Company shared, this company has coordinated with the international ships' Vietnam National Shipping Lines Corporation to reopen the route as soon as possible. In turn, enterprises will also promote marketing and promotion of routes, serving shipping lines and shippers and taking prestige and long-standing brands to compensate for the transporting expenses. In detail, transporting international ships and domestic ship owners will benefit all seas of Nghe An, such as Vissai Port, Vietsun Port, Nghe Tinh Port, and Dong Hoi Port.

Recently, Nghe An province consulted on a draft resolution on policies to support shipping lines to open container shipping routes and support businesses with goods transported by containers through Cua Lo port (Nghe An province) from 2023 through 2026 to submit to the 18th Provincial People's Council at the meeting in July 2023 for consideration and promulgation.

Accordingly, Nghe An offers the following support levels: 200 million VND/port visit for shipping lines licensed to operate container shipping business according to regulations and deliver or load goods at Cua Lo port by route with a minimum frequency of 2 trips/month. Enterprises with goods transported by container through Cua Lo port with a minimum frequency of 2 times/month will be supported 600,000 VND/container for 20-foot containers and 1,000,000 VND/container for 40-foot containers.

A Southeast Economic Zone Management Board representative said that it is necessary to have policies to support import-export businesses and container shipping lines because it promotes the production, import and export, attracts investment and improves the business investment environment.