The document summarizes Vietnam's container port development over recent decades. It describes how terminals have progressively relocated from Ho Chi Minh City to new deepwater facilities like Cai Mep to handle larger vessels. Major global terminal operators like APM Terminals, DP World, PSA and Hanjin have invested heavily in new facilities in Cai Mep and elsewhere. APM Terminal's Cai Mep International Terminal is highlighted as the only Vietnamese facility that can currently handle the largest vessels up to 15,000 TEU. Strong annual growth rates around 15-18% are forecast to continue driven by manufacturing diversifying from China to Vietnam. Major investors see the market and government support as relatively safe despite past bureaucracy, with Vietnam's

1. I
n the early 1990’s as
part of the city’s plans
to reduce congestion, all
the terminals that make up
HCMC port were earmarked
for progressive relocation
outside the city to deepwater
facilities. This led ultimately
to the current developments
taking place in Cai Mep,
although the old HCMC
city container terminals
continue to operate today.
South Vietnam effectively
now has four container port
groupings: HCMC, Hiep
Phuoc and the Thi Vai and
Cai Mep clusters. In 2010,
Vietnam’s container volumes
grew by around 17% to 6.6m
teu of which HCMC and Cai
Mep handled 4.358m teu,
70% of the country’s total.
The groupings
HCMC comprises five old
facilities including those
owned and operated by the
Saigon Port and Saigon
New Port companies.
Hiep Phuoc comprises
one terminal, the Saigon
Premier Container Terminal
(SPCT) located along the
western shore of the Soai
Rap River - an 80/20 venture
between DP World and the
Vietnamese state-owned Tan
Thuan Industrial Promotion
Company (IPC). SPCT began
operations in October 2009
and today its 790,000 teu
capacity first phase comprises
two berths on 500 m of quay,
which will eventually be
extended to 950 m. When fully
completed, the terminal will
have the capacity to handle
more than 1.5m teu annually.
Currently, despite the
government having allegedly
given undertakings to dredge
the Saoi Rap River to a depth
of 9.5 m, no action has yet
been taken but when (if)
the dredging is carried out,
it should allow SPCT to
serve vessels with a nominal
capacity of up to 5,000 teu.
The Thi Vai cluster,
southeast of HCMC has two
terminals: Saigon International
Terminals Vietnam (SITV)
and SP-PSA.. Comprising
a 33 ha site, with 730 m
of berth, Hutchison Port
Holdings (HPH) has a 70%
share in SITV which started
36 • CONTAINER MANAGEMENT • September/October 2011
One of the most dynamic container shipping markets in Southeast Asia, Vietnam
has attracted significant levels of investment from the major global players with
APM Terminals firmly at the forefront, as part of its portfolio expansion strategy
reports Sid Cass
Vietnam’s ports:
transformation
and transition
Reproduced with the permission of CM as published in the September/October 2011 edition
APM Terminals’ CMIT is the leading facility in Ba Ria-Vung Tau province

2. September/October 2011 • CONTAINER MANAGEMENT • 37
operations in August 2010.
Although it has a 14 m depth
alongside, the access channel
has less than 12 m, since
dredging projects have not
been extended to the facility.
The SP-PSA terminal
is a joint venture between
Saigon Port, Vietnam
National Shipping Lines
(Vinalines) and PSA Vietnam
that started operations in
2009 as Vietnam’s first
deep-sea container terminal.
Strategically located near the
mouth of the Cai Mep-Thi
Vai River, SP-PSA hopes
to become a major hub for
regional transhipment activity.
The terminal currently has
600 m of berth with 14.5 m
water depth (though the access
channel is only 12 m), and a
further 600 m extension is at
the planning stage. When both
phases (1,200 m of berths)
are fully completed, SP-PSA
will have a projected annual
capacity of over 2m teu.
The Cai Mep cluster in
Ba Ria-Vung Tau province
80 kms southeast of HCMC,
comprises three existing
terminals (TCCT, TCIT and
CMIT) and three terminals
currently under construction.
The Tan Cang-Cai Mep
Container terminal (TCCT) is
wholly-owned by Saigon New
Port Company and it began
operations in June 2009. TCCT
has a total berth length of 300
m and a throughput capacity
of 600,000 teu/annum.
Tan Cang–Cai Mep
International Container
Terminal (TCIT) is a joint
venture between Hanjin, MOL,
Wan Hai and Saigon Newport.
The facility, which has a 14 m
depth alongside but only a 12
m access channel, commenced
operations in January 2011.
TCIT has two berths with
a total length of 590 m and
40 ha of container yard, and
is equipped with six post-
Panamax cranes and 20 RTGs.
In early 2011, APM
Terminals opened its Cai Mep
International Terminal (CMIT)
which is claimed to be the only
container facility in Vietnam
capable of handling vessels
up to 15,000 teu capacity
and as a result, it caters for
the majority of the country’s
Europe/US long haul trades.
Representing an investment of
around US$270m, CMIT has
an annual container throughput
capacity of 1.1m teu, with
16.5 m depth alongside and a
14 m channel that is planned
to be dredged to 16.5 m in
the medium term. Currently
equipped with four super
post-Panamax container
cranes, another on order
and the purchase of a sixth
crane under review, CMIT
also offers more than 36
hectares of container yard.
The terminal is a 49%/51%
venture between APM
Terminals and local state-
owned companies Vietnam
National Shipping Lines
(Vinalines) and Saigon Port
and it handled its first vessel
in March 2011 with the call
of the 11,388 teu CMA CGM
Columba which to date, is still
the largest container vessel
to call at a Vietnamese port.
In August, 2011 the 9,038
teu capacity Grete Maersk was
the first Maersk Line vessel to
call at CMIT on its route from
Asia to North America. With
this first direct “Transpacific
6” (TP6) call, Maersk Line
officially became a business
partner of its sister company
APM Terminals, one of the
three main investors in CMIT.
Meanwhile, US-based
operator SSA Marine has
invested in the SP-SSA
International Container
Terminal (SSIT) at Cai Mep.
SSIT is a joint venture between
Saigon Port, SSA International
Holdings – Vietnam and
Vinalines. Construction work
is now under way on the new
1.2m teu capacity facility,
which will have two berths
on a 600 m quayline able to
accommodate 10,000+ teu
vessels (with 600 m allocated
as dedicated barge berths).
The terminal will have 14
m depth alongside, and
will be equipped with four
ship-to-shore super post-
Panamax container cranes
and 16 eRTGs. Operations
are scheduled to commence/
end 2011/early 2012.
Why are major global
operators scrambling to
invest in Vietnam’s ports?
Malcolm Gregory, CMIT’s
head of marketing reasons that
double-digit annual growth
business profile
The 9,038 teu capacity Grete Maersk was the first Maersk Line vessel to call at CMIT

3. since 2004 has now doubled
throughput to more than 4.3m
teu and growth is forecast
to continue at between 15%
and 18% annually to 9m teu
by 2015. “This is mainly
due to US and European
manufacturers and importers
diversifying their production
and supply lines from China
to Vietnam as China becomes
increasingly more expensive.
Vietnamese labour is highly
competitive, intelligent,
productive and very resilient:
GDP is growing around
7.5% a year and has been for
many years despite the global
recession and it is a well-
balanced market in terms of
imports/exports with imports
primarily from Asia and
exports to US/Europe,” he said.
Until the development of
facilities beyond HCMC no
deepsea mainline container
vessels were able to call at
Vietnam. “Until two years
ago, the largest vessels to
call at Vietnam were around
1,500 to 1,800 teu whereas
today for example, CMIT is
now receiving vessels up to
11,500 teu with the potential
to handle vessels up to 15,000
teu.,” Gregory added.
Safe investments and
political will
Investment in Vietnam seems
to be relatively safe although
there are still high levels of
bureaucracy which can cause
frustrations and significant
delays. However, according to
Gregory, APMT has enjoyed
good working relationships
with all levels of government,
“And any problems that we
experience are dealt with to
our satisfaction,” he said.
This is a far cry from
the mid-early 1990s when
the then called P&O Ports
International outlined the
difficulties of investing in
Vietnam, citing that the lead-
time from preparation of tender
documents through concession
award to eventual start-up was
normally between two and
three years. Proceedings were
often delayed by a combination
of lack of confidence on the
part of government officials,
political considerations,
lack of an appropriate legal
framework, or simply a lack of
will on the part of government
to complete the process.
P&O Ports, in fact, was
initially invited by The Ho
Chi Minh People’s Committee
to tender for a joint venture
in Ben Nghe Port and was
eventually chosen from six
bidders after a long period
of deliberation. After a
year of getting nowhere
during which P&O Ports
had not even reached the
stage of completing the
first document, let alone
a management contract or
joint venture agreement in
which ‘unacceptable risks
and returns were proposed’,
the company cancelled its
interest in the concession..
The experience of P&O
Ports was not unique, as
demonstrated by the Mitsui
joint venture in Ho Chi Minh
City which overran its budget
by two and a half times, due
to bureaucratic delays.
“Today’s change in
government approach has
largely come about through
successive governments’
recognition that ports are a
strategic necessity and are vital
for the future development of
the country,” said Gregory.
“The need is to reinforce
an international perception
that inward investments are
safe and that the government
must be seen to deliver on
its promises that Vietnam is
a secure and reputable place
in which to do business. If
foreign investors are frightened
or cannot make a sensible
return on their investments
there will be no more foreign
investment which would be
catastrophic for the country.”
Learning curve
“We have been very impressed
with the quality of available
labour which is educated and
hard working and we have
been surprised at how easy
it has been to find those with
the skills and willingness to
learn. The crane drivers for
example, have been trained in
CMIT simulators and at other
APMT’s facilities around the
region but what we of a certain
age have to remember, is that
the youngsters of today grow
up with electronic games
and computers and so forth
and they adapt to simulators
like ducks to water, unlike
some of us oldies, he said”
The biggest problem for
APMT is trying to instil safety
into the mindset of labour. It
is not part of the culture, as
can be seen by a walk around
any town and observing how
people ride their motorbikes
or cross the road, for example.
“Significant company attention
is continually focussed on
safety and while there have
been no problems or safety
issues, it is an aspect that needs
constant attention. However,
this is more than offset by
a lack of labour militancy,
flexibility and reliability,”
Gregory concluded. n
38 • CONTAINER MANAGEMENT • September/October 2011
business profile
Since 2004 throughput doubled to more than 4.3m teu and 15% and 18% annual
growth is forecast to continue to 9m teu by 2015
Malcolm Gregory, CMIT’s head of
marketing