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MOL highlights Vietnamese investment as it opens second terminal    15/05/2018
Japanese shipping group Mitsui OSK Lines (MOL) has continued to expand its footprint in Vietnam with the opening of Haiphong International Container Terminal (HICT) in northern Vietnam on 13 May.

  • Haiphong port gateway
Haiphong port gateway. Credit: Tony Slinn
Located in Lach Huyen, HICT is the first terminal in northern Vietnam that can accommodate 14,000 teu container ships.

MOL, led by president Junichiro Ikeda, said, “The terminal will meet customer demands for shorter transit times and lower transport costs, while contributing to economic growth in northern Vietnam, since large vessels that offer direct links between Asia and North America and Europe, can call at the port.”

MOL is also operating tugs in the port to ensure safe navigation.
Significantly, HICT’s opening was concurrent with that of Lach Huyen, which is the first public-private partnership between Vietnam and Japan. The port was built with Japanese loans and the container cranes were supplied by Mitsui E&S Holdings as a result.

To tap on the growing manufacturing activities in Vietnam, MOL began investing in infrastructure development there and has a 21.33% stake in the Tan Cang-Cai Mep International Terminal, which opened in 2011.

In northern Vietnam, MOL has been expanding its logistics businesses such as customs clearance, warehousing, container depots, and inland transport in the Haiphong area.

Andy Lane, partner at CTI Consultancy in Singapore told Fairplay, "Haiphong has its own hinterland, Hanoi/northern Vietnam, and is well placed for that demand. Saigon to Haiphong by land is 1,400 km and the land freight infrastructure is very poor. Feedering Saigon to Haiphong is more viable, but with feedering and transhipment costs will not be more economical than direct calls in Saigon or Saigon feedering to Singapore.

"The limited demand in southwest China will likely use Fangcheng, hinterlands to the immediate north will be targets for the BRI north-south rail corridor running through Thailand-Malaysia-Singapore, if that ever becomes a reality. I think that there would be customs/border issues via Vietnam for Chinese exports and is potentially something which the government simply will not allow.

"For mainline calls, to extend a transPacific service from Hong Kong or Shenzhen to Haiphong would add at least 1,500 km to the tail of the service. That is likely [to be] cost prohibitive as feedering Haiphong to Hong Kong would yield a lower overall cost. Extending a USEC-Suez-Saigon service to Haiphong would add about 2,000 km, which is also likely not cost competitive.

"Diverting an Asia-Europe string into Haiphong would be a deviation of 610 km, an incremental cost of say USD40,000 (fuel and port costs) – and that could be cheaper than feedering to either Hong Kong or Singapore. So long as you had say 800 laden teu per call, which, despite the small market size, might be able to support one to two deepsea services. There are still a few services below 14,000 teu left on Asia-Europe, for the meantime.

Direct deepsea calls also have the perception of being higher quality and reliability than hub and spoke, so a direct service for say the THE Alliance could help them to build market share.


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