Recommendations to relieve container cargo congestion at the port of hai phong joint stock company – chua ve terminal

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: DO KHANH LY DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS TO R

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: DO KHANH LY

DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO RELIEVE CONTAINER CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT STOCK

COMPANY – CHUA VE TERMINAL

HAI PHONG – 2015

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: DO KHANH LY

CLASS: GMA 02

DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO RELIEVE CONTAINER CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT STOCK

COMPANY – CHUA VE TERMINAL

Supervisor: MSc Hoang Thi Lich Division: Global Studies and Maritime Affairs Faculty: Economics

HAI PHONG – 2015

PREFACE

It is believed that container has made the remarkable revolution in maritime industry Indeed, thanks to container shipping, an amount of cargo trading all around the world has been rising up In the present age, along with the development

of science and technology, container which is carried on mega ships is no longer impossibility And container shipping service has brought huge profits for the economy

Vietnam is a country which has got a favorable natural condition with more than

3200 km of coastline Therefore, maritime transport brings many opportunities and benefits to the country, especially in container shipping Although having a natural advantage along with a growing development of seaports, instead of being able to gain significant profits from container transportation, Vietnam has to spend an amount of money in dealing with container cargo congestion at port The storage of congested container at port causes the loose of not only an expense but also profits when a container cannot be used for lease

Obviously, it can be seen that container cargo congestion is an alarming problem nowadays Therefore, understanding and finding feasible solutions for this problem

is a compelling task This report is written with the aims to have a more thorough glance at container cargo congestion problem

I hereby declare that this report is my own work which has not been published before

If violated, I am solely responsible for and bear the punishments of the Institution and University

Student name and Signature

Do Khanh Ly

ACKNOWLEGEMENT

Firstly, I owe my deepest gratitude to my advisor MSc Hoang Thi Lich for the continuous support of my dissertation, for her patience, encouragement, guidance, and immense knowledge She helped me to develop my research as well as many difficulties during the time I carried out my dissertation

It is an honor for me to extend my special thanks to staffs at Container Team in particular and all staffs at Chua Ve terminal in general They have instructed me enthusiastically as well as provided information related to my report Without their assistance, I would not have fulfilled my dissertation

Table of Contents

PREFACE i

ACKNOWLEGEMENT ii

LIST OF ABBREVIATIONS v

LIST OF FIRGUES vi

LIST OF TABLES vii

INTRODUCTION 1

1 Necessity of the research 1

2 Research object 1

3 Research scope 2

4 Research findings 2

CHAPTER 1: LITERATURE REVIEW 3

1.1 An overview of congestion at port 3

1.2 Types of congestions at port 3

1.3 Causes of cargo congestion at port 5

CHAPTER 2: CONTAINER CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT-STOCK COMPANY – CHUA VE TERMINAL 9

2.1 Introduction of Chua Ve Terminal 9

2.1.1 General information about Chua Ve Terminal 9

2.1.1.1 General information about the Port of Hai Phong Joint-Stock Company 9

2.1.1.2 General information about Chua Ve Terminal 9

2.1.2 Main services 10

2.1.3 Infrastructure 11

2.1.4 Organization 13

2.1.5 Personnel 15

2.1.6 Business activity results of Chua Ve Terminal in 2013 and 2014 16

2.1.7 The total container throughput of Chua Ve Terminal in recent years 17

2.2 Container cargo congestion at Chua Ve terminal 20

2.2.1 Container cargo congestion at gate 20

2.2.1.1 The real situation 20

2.2.1.2 Causes of cargo congestion at gate 21

2.2.2 Container cargo congestion at quay 21

2.2.2.1 The real situation 21

2.2.2.2 Causes of cargo congestion at quay 22

2.2.3 Container cargo congestion at yard 22

2.2.3.1 The real situation 22

2.2.3.2 Causes of container cargo congestion at yard 23

2.2.3.3 The negative influence of accumulated containers 25

2.3 Evaluation 28

2.3.1 Strong points 29

2.3.2 Weak points 31

CHAPTER 3: RECOMMENDATIONS TO MINIMIZE CONTAINER CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT STOCK COMPANY – CHUA VE TERMINAL 34

3.1 Recommendations for Chua Ve terminal 34

3.1.1 Applying information technology 34

3.1.2 Port facilities 34

3.1.3 Skills of staffs 35

3.1.4 Controlling environmental issue 35

3.1.5 Co-ordination with authorities and enterprises 36

3.2 Recommendations for governments and involved authorities 36

3.2.1 For the government 36

3.2.2 For the involved ministries and parties 38

CONCLUSION 40

BIBLIOGRAPHY 41 APPENDIX I

APPENDIX II

LIST OF ABBREVIATIONS

ISO International Organization for Standardization

DIN Deutsches Institut fur Normung

UNCTAD United Nations Conference on Trade and Development

CFS Container Freight Station

L.O.A Length of Ship Overall

TEU Twenty-foot Equivalent Units

RFID Radio Frequency Identification

LIST OF FIRGUES

Figure 1: General layout of Chua Ve terminal 10

Figure 2: The diagram of organization at Chua Ve terminal 13

Figure 3: Financial indicators of business activity 16

Figure 4: The container throughput at Chua Ve terminal from 2011 to 2014 17

Figure 5: The comparison between Tan Vu terminal and Chua Ve terminal in terms of container throughput from 2011 to 2014 18

Figure 6: The geographic location of Chua Ve terminal and Tan Vu terminal 19

Figure 7: Facilities at Tan Vu terminal 20

Figure 8: The number of container stagnated at Chua Ve yard since 2006 to 2014 22 Figure 9: The number of containers stagnated at Chua Ve terminal since 2006 - 2014 23

Figure 10: Accumulated containers placed outside at Chua Ve yard 25

Figure 11: Damaged containers at Chua Ve yard 26

Figure 12: Yard layout of Chua Ve terminal 27

Figure 13: Block AD 27

Figure 14: Block BE 27

Figure 15: No 03/TB-KB form according to the Circular No 15/2014/TT-BTC 30

Figure 16: Cargo dispatching announcement of Chua Ve terminal 31

LIST OF TABLES

Table 1: Storage area at Chua Ve Terminal 11

Table 2: Berth at Chua Ve terminal 11

Table 3: Equipment at Chua Ve terminal 12

Table 4: Labor structure at Chua Ve terminal 16

Table 5: Business activity results of Chua Ve Terminal in 2013 and 2014 16

Table 6: Labor handling capacity at Chua Ve terminal from 2011 to 2014 32

Table 7: Comparison between Tan Vu terminal and Chua Ve terminal in terms of infrastructure 35

INTRODUCTION

1 Necessity of the research

Located near the international maritime lane, maritime transportation plays a crucial role in foreign trade activities of Vietnam Recent years, thanks to open door policies of the government and rapid growth of the national economy, especially acceding World Trade Organization (WTO) on November 2006, the amount of cargo trading between Vietnam and other nations in the world has been increasing significantly, especially container cargo

In the present age, during the process of economic integration of the country, Hai Phong Port is considered as an important port in bridging trade between the Northern cities and other provinces and cities as well as between Vietnam and other nations in the world With its strategic location along with strong growth of seaborne trade, instead of gaining significant benefits from container shipping, the Port of Hai Phong Joint Stock Company has been faced container congestion which affected detrimentally to business activity of the company as well as the society Regarding to Chua Ve terminal – a branch of the Port of Hai Phong Joint Stock Company, the terminal is specialized in handling container cargo Recent years, Chua Ve terminal has been suffered consequences from container cargo congestion

at gate, quay and yard This problem causes a loss of revenue including storage charge and other cost related to cargo storage, a time-consuming stay of ships and cargo at port meanwhile “time is money” in maritime field and so on Container cargo congestion not only influences directly to Chua Ve terminal but also national economy and society in general

Therefore, the topic “Recommendations to minimize container congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal” is chosen in order to have a deep glance at this problem, understanding thoroughly reasons and find feasible solutions for container cargo congestion at Chua Ve terminal

2 Research object

Container cargo congestion at Chua Ve terminal – a branch of the Port of Hai Phong Joint Stock Company

CHAPTER 1: LITERATURE REVIEW

1.1 An overview of congestion at port

Congestion at port can present numerous ways of appearance It could be witnessed either in congestion costs or in queue which are increasingly accumulated, being featured visually (Meersman, Voorde, & Vanelslander, 2012)

A port typically experiences internal bottlenecks in which they are resulted in a queue; for example: loading and discharging quays, locks, etc (Blauwens, De Baere, & Van De Voorde, 2010)

In fact, there is no common norm to define cargo congestion at port so far According to Dr Usman Gidago, congestion in ports is an issue related to delays, queuing and additional time of voyage and dwell of ships or cargoes at the port (M Alderton, 2008) From this point of view, it can be seen that cargo congestion at port is a part of port congestion in which flow of cargo is interrupted or delayed by some factors

1.2 Types of congestions at port

According to Dr Usman Gidago, there are some main types of port congestion in African ports (Gidado, 2015):

- Ship berth congestion: is primarily caused by many ships at berth or at anchorage waiting for available berth

- Ship work congestion: is mainly caused by delays in procedure for loading and discharging ship This can lead to a dwell of ships at port to complete cargo operation work

- Vehicle gate congestion: is primarily caused by congestion or delay of landward access to the port If there is any problem occurring on the way to the port, it could result in queuing of truck coming in and out of the port gate This will affect the flow of cargo significantly

- Vehicle work congestion: is mainly caused by low efficiency when loading and unloading cargo

- Cargo stack congestion: is principally caused by either a stay of cargo at a storage area beyond allowed hours or days or above a maximum capacity of

- Maritime access route: in default of capacity restrictions; for example, in order to access the port, ship have to adapt its speed depending on tide

- Locks: congestion may happen if the numbers of ships which want to use the lock excess the lock capacity

- Berths: in a case of available berth is occupied another ship

- Loading and unloading: when all berths are employed, there coud be a shortage of loading and unloading equipment

- Storage area: in storage area, bad configuration or unexpected moves may impose a waiting time on cargo or ships

- Custom inspection: the procedure of custom inspection may result in congestion at the point where cargo arrive or depart The security checks may worsen the flow of cargo

- Hinterland loading and unloading: the employment of specific hinterland mode of transport may cause disruption or delays, influencing the port operation as well In case of truck use, gate area is often the bottleneck at the port

- Hinterland connections: if hinterland infrastructure is utilized excessively where the port is located in crowded city, there is probably delays in delivering cargo at the port

In above classification of port congestion, it can be said that there are two main types of port congestion including cargo congestion and ship congestion In terms of

cargo congestion, there are three main types of congestion depending on the location and structure of the port

- Cargo congestion at gate: this type of congestion related to vehicle gate congestion In case of truck carrying container cargo enter or depart from the port, if there is any delay or interruption of landward access to the port, container cargo will also be congested

- Cargo congestion at storage area: it could be either a stay of cargo at storage area beyond allowed time or excess a maximum capacity of storage area

- Cargo congestion at quay: this type of congestion related to loading and unloading process when there is a shortage of handling equipment

1.3 Causes of cargo congestion at port

Obviously, it is important to identify causes of delays so as to find appropriate solutions to solve According to Professor Patrick M Alderton, there are some causes of port congestion related to freight congestion at port (Alderton, 2008) (1) Planning

- Inadequacy of inland transport, both in capacity and efficiency, in relation to trucks, wagons, highways and port access routes

- Failure to keep traffic forecast updated to reflect changes in the pace of major economic developments,

- Failure of port management and planning authorities to make adequate plans

in time for port management

- Inflexibility in development plans to allow later changes in mode of traffic flows

- Political and social interference which bear on decision-making processes (2) Management

- Lack of continuity in senior port management positions

- Senior port management chosen without regard for the qualifications required by the job and the adequate provision for upgrading knowledge

- Too little training for other staffs, particularly of the middle management and operating levels

- Lack of direct authority of management to effect remedial actions

(3) Labor

- Poor labor relations, leading to insufficient restrictive practices

- Problems caused by too much or too little labor, according to circumstances

- Insufficient deployment of labor

- Failure to adapt working practices to local circumstances, such as the climate

- Lack of training of dockworkers, especially in the use of sophisticated equipment

- Cargo stowed at port of loading without regard to efficiency of discharge

- Form of packaging and cargo presentation unsuitable for efficient handling at port

- Consignees without adequate financial resources physical facilities to take cargo

- Absence of preventative and running maintenance

- Lack of qualified maintenance personnel

- Lack of adequate stock of spare parts

- Insufficient standardization of equipment types

(8) Clearance procedure and documentation

- Late arriving document

- Faulty document

- Outmoded documentation requirement and processing method

- Outmoded clearance facilities for vessel and cargo

- Importers allowed to order shipments without sufficient funds to take delivery on arrival

(9) Dynamic effects

- Emergency diversion and transshipment of cargo destined for another port, which can bring temporary peaks in quantities of cargo, which a port has to handle

- Period of exceptionally bad weather

(10) Function and location of the port

- Impossibility of improving back-up land accesses in ports because adjacent lands have been occupied by urban developments

- Activities carried out in the port area, not related directly to cargo handling, which may conflict with higher port throughput

- Special difficulties which may occur with traffic of landlocked countries

- Dislocation of traffic by decisions of neighboring countries if ports are serving regional trade

CHAPTER 2: CONTAINER CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT-STOCK COMPANY – CHUA

VE TERMINAL

2.1 Introduction of Chua Ve Terminal

2.1.1 General information about Chua Ve Terminal

2.1.1.1 General information about the Port of Hai Phong Joint-Stock Company

Established in 1874, with more than over 140 years of development, Port of Hai Phong has become one of the leading port operators in the North of Vietnam Located in the triangle economic zone Hanoi – Hai Phong – Quang Ninh, a well-developed area with good infrastructure in transport, Port of Hai Phong is the most popular destination for the export and import activities not only of those provinces but also of the whole Northern part of the country

Port of Hai Phong’s main premises are Hoang Dieu Terminal, Chua Ve Terminal, Tan Vu Terminal and Bach Dang Terminal

From 1st July, 2014, Hai Phong Port has transformed its legal form from Limited Liability Company into Joint-Stock Company The company operates under the international name “Port of Hai Phong Joint-Stock Company”

2.1.1.2 General information about Chua Ve Terminal

Business name: Chua Ve Terminal – Port of Hai Phong Joint Stock Company

Address: No 5 Chua Ve Street, Dong Hai 1 Ward, Hai An District, Hai Phong Phone: 0313.765784; Fax: 0313.765784

Chua Ve Terminal is a branch directly under Hai Phong Port which was established

in 1997 Before 1995, Chua Ve Terminal had two areas In the first area, departments, transaction and port operation places were built In wartime and subsidizing period, port mainly operated general cargoes, aid and exported agricultural product In the second area, in a period of war, military cargo and building materials were operated

Until 1995, because of requirements of separating Chua Ve Terminal into two enterprises: Chua Ve Stevedoring Enterprise and Doan Xa Stevedoring Enterprise Chua Ve Stevedoring Enterprise remained the organization, infrastructure, transporting vehicles and handling equipment

After the period of two years 1995 and 1996, being invested by Ministry of Transport and Hai Phong Port, Chua Ve Enterprise had basically changed in terms

of scale The enterprise built yard with 70,000 m2, operation building, CFS warehouse as well as equipped facility and equipment for operation

In July 2007, Chua Ve Terminal was officially put into operation after renovation and construction Until now, Chua Ve Terminal is one of the biggest container terminals in the North of Vietnam with the handling capacity of 500,000 TEU/year Chua Ve Terminal is the international standardized modern container terminal, operating on the basis of application of information technology, having professional staffs in the field of management of container port operation Chua Ve Terminal constantly improves and enhances customer service quality

Figure 1: General layout of Chua Ve terminal

2.1.2 Main services

- Container handling service at berth

- Yard leasing, forwarding, container stuffing and de-stuffing, reefers storage, cargo inspection and quarantine

- CFS warehouse service: Consolidation and distribution

- 120 tons electronic weigh bridge for containerized bulk cargoes

- Handling equipment and vehicle repairs Container cleaning and repair

- Container and other cargoes transportation by road

Total length of berth (meters) 848

Depth alongside (meters) -8.4

L.O.A (meters) 175

This is a specialized container terminal with total 848m length of 05 berths which are designed according to standard of first level terminal Chua Ve terminal has -8.4m deep alongside and 175m L.O.A Yard area is 150,000 m2 with wharf surface pressure is 8-16 T/m2, being able to handle 5 ships simultaneously with throughput capacity about 500,000 TEU/year

Table 3: Equipment at Chua Ve terminal

EQUIPMENT

CATEGORY TOTAL

Gantry cranes (QC) 04

Portal cranes (PC) 05

Rubber Tyred Gantry (RTG) 10

Rubber Tyred Mobile Crane 02

Reach Stackers 02

Forklift of all kinds 09

Container tractor, trailers 26

Electronic weighing bridge 120 tons 01

Deputy Director

of Warehouse

CFS Warehouse

Container Team

Crane Team

Mechanized Team

Industrial Hygiene Team

Salary Department

Administration and Health Department

Finance and Accounting Department

Duties of departments:

- The board of directors:

o Director: a highest senior leaders in the enterprise with a responsibility of adapting a target and plan of Hai Phong Port, guaranteeing employees’ life as well as being legally accountable for production and business of the enterprise

o Deputy Directors: a counselor for Director, directly supplying concrete guidance in production including a output target, price, materials, forwarding plan, collecting all information about annually, quarterly and monthly plan in order to inform for Director

o Technique and Material Department: in charge of managing technique and material and ensuring labor safety

o Administration and Health Department: advise Director in terms of emulation, propaganda, office stationery buying and management; arrange workplace; welcome domestic and foreign guesses

o Information Technology Department: manage cargo information system; connect information with MIS system of Hai Phong Port

o Security Team: ensure security, prevent cargo and asset theft

o Industrial Hygiene Team: clean and repair berth, yard and warehouse; ensure industrial hygiene in a good manner

o Container Team: conduct freight forwarder through the port; manage container arrangement at yard; solve forwarding procedure at port; keep track of the time of container demurrage

o CFS warehouse: manage storage, preserve goods for cargo owners

- Service workers: people who serve for production process creating main products for enterprise

- Indirect staffs: people who carry out management of production process of enterprise

Table 4: Labor structure at Chua Ve terminal

No Job title Total

2.1.6 Business activity results of Chua Ve Terminal in 2013 and 2014

Table 5: Business activity results of Chua Ve Terminal in 2013 and 2014

Indicators Unit Year 2013 Year 2014

Figure 3: Financial indicators of business activity

The table and graph above show business activity results of Chua Ve Terminal in the period of two yeas which are 2013 and 2014 It can be seen that the results in

2014 was lower than that in 2013

- The total output in 2014 was 378,051 TEU, decreasing by about 0.9 TEU compared with the total output in 2013

- The total revenue declined to 334,002 million VND in 2014 with over 35 million VND less than the former

- The total cost which the enterprise had to spend in 2014 was 244,266 million VND, being approximately 13 million VND less than the total cost in 2013

- Because of a decrease of total revenue and total cost, in 2014, the enterprise only gained 89,736 million VND profit; meanwhile, they gained 111,648 million VND in 2013

2.1.7 The total container throughput of Chua Ve Terminal in recent years

Figure 4: The container throughput at Chua Ve terminal from 2011 to 2014 From the above chart, it can be obviously seen that an amount of container throughput followed a downward trend Specifically, in the period of four years, a volume of container throughput was the highest in 2011 with 552,120 TEU In the next two years, there was a gradual decrease of an amount of container throughput from 446,693 TEU to 395,143 TEU Chua Ve Terminal witnessed the lowest

volume of container throughput in 2014 with 378,051 TEU, being one and a half less than that in 2011

Although Chua Ve terminal has throughput capacity about 500,000 TEU/year, an amount of container throughput was under its capacity from 2012 to 2014 The main reasons for a decrease in a volume of container throughput at Chua Ve terminal in recent years is an increase introduction of container ports within Hai Phong in specific and Vietnam in general Because of increasing demand of container shipping, a variety of container ports were built to meet the need, increasing competitiveness among these ports According to statistics of the Second Zone Maritime Pilotage Single-Member Limited Liability Company (PILOTCO - II), there are more than 20 container terminal in Hai Phong area (PILOTCO II) Because of numerous container ports in area, Chua Ve terminal gradually reduced its market share; hence, container throughput also decreased although the terminal has enough capacity to handle a large amount of container each year

Meanwhile, there is a different story at Tan Vu terminal in the same Hai Phong port system with Chua Ve terminal In recent years, the Port of Hai Phong Joint Stock Company has witnessed a slight fluctuation in a volume of container throughput in which an amount of container throughput at Tan Vu terminal rose slightly

Figure 5: The comparison between Tan Vu terminal and Chua Ve terminal in terms

of container throughput from 2011 to 2014

0 200000 400000 600000 800000 1000000

1200000

Compared to Chua Ve terminal, Tan Vu terminal has more advantages in terms of infrastructure and geographical location After more than 10 years of being constructed since 2003, Tan Vu terminal is deep water port which is invested and equipped modern facilities Regarding to geographical location, the terminal is located at favorable condition where is near the estuary of Cam river

Figure 6: The geographic location of Chua Ve terminal and Tan Vu terminal

Source: The Port of Hai Phong Joint Stock Company

As can be seen from above picture, compared to Chua Ve terminal, Tan Vu terminal

is located near the river mouth where a ship can access to the port easily Moreover, the deep at berth of Tan Vu terminal is -9.4m, being deeper than that of Chua Ve terminal With these geographical conditions, it is more convenient for ships to access Tan Vu terminal rather than Chua Ve terminal

In terms of infrastructure, Tan Vu terminal is well equipped with the most advanced and modern facilities which can serve container ships and container cargo sufficiently and effectively This terminal also has a larger area of warehouse and

CY and a longer length of berth than Chua Ve terminal

Figure 7: Facilities at Tan Vu terminal

Source: The Port of Hai Phong Joint Stock Company

It can be seen obviously that thanks to these strengths, a growing number of shipping lines choose Tan Vu terminal as their destination for services That is a reason why an amount of container throughput at Chua Ve terminal decline considerably in recent years

2.2 Container cargo congestion at Chua Ve terminal

2.2.1 Container cargo congestion at gate

2.2.1.1 The real situation

In fact, the cargo congestion at gate rarely occurs at Chua Ve terminal nowadays The major reason for this situation is a low volume of cargo throughput Because of

an introduction of various new container terminals at Hai Phong area, Chua Ve terminal hardly compete to these terminals, especially Tan Vu terminal – also be one branch of Hai Phong Port Thus, an amount of container cargo throughput of Chua Ve terminal in recent years decreases dramatically As a result, a number of arriving container trucks to the port is not high

Nonetheless, it is still necessary to consider both external and internal factors that can cause cargo congestion at gate of this terminal

2.2.1.2 Causes of cargo congestion at gate

Regarding to external factors, there is a principal cause that could lead to cargo congestion at gate which is communication network In the first place, the road system connecting ports along Chua Ve – Dinh Vu route is dramatically downgraded and overloaded, especially the T-junction of Chua Ve, Nguyen Van Linh Street and Dinh Vu industrial zone This is the main and unique road route that connects Hai Phong port with highway 5 to Hanoi and adjacent cities in order to transport cargo from the gathering destinations to Hai Phong port and deliver imported cargo from the port to the other local areas Nearly 90% of an amount of import and export cargoes through the port is transported via this road system A number of container trucks frequently travel across the T junction area; meanwhile, this area is small and narrow along with a significant degradation of the road As a result, this leads to traffic congestion in many hours, especially at rush hour In

2010, there were many container trucks stand stilled on the road to the port and this traffic congestion lasted 20 hours Because of poor communication network to Chua

Ve terminal, it is possible for vehicles carrying cargo to be congested at gate

In terms of internal factor, a primary cause which can result in cargo congestion at Chua Ve terminal is procedure at gate Instead of applying information technology

in checking container trucks at gate, there is a manual method of controlling vehicle coming in and out the terminal When trucks come in the gate, truck drivers or cargo owners have to inform security guard information including: name of truck driver, truck number, trailer number, container number, etc., so that a guard enters data in a computer or vehicle register book Additionally, forwarding staffs also check “Inspection Certificate” of a truck in order to identify allowed loading capacity of the truck before allowing a truck to enter the terminal It can be seen that there are many procedures to be carried out before a container truck can come in the terminal If this process is conducted slowly and time-consuming, especially when a queue of containers is still waiting for coming, this can lead to a backlogs at a gate

of the terminal

2.2.2 Container cargo congestion at quay

2.2.2.1 The real situation

In fact, because of a decline in an amount of container throughput in recent years, nowadays cargo congestion at quay rarely happens at Chua Ve terminal With the

capacity of handling 550,000 TEU/year, Chua Ve terminal has sufficient equipment

to handle a volume of container in recent years; for example, in 2014, the total volume of container cargo throughput at Chua Ve terminal was 378,051 TEU, being about 171,000 TEU less than the actual capacity of the terminal Nonetheless, if an amount of containers increase at the terminal, cargo congestion probably occurs at quay because of some causes

2.2.2.2 Causes of cargo congestion at quay

There are some justifications leading to cargo congestion at quay at Chua Ve terminal consisting of infrastructure and occupational skills of staffs First of all, in terms of infrastructure, although Chua Ve terminal has been equipped relatively sufficient facilities to handle container cargo at quay, there is some outdated equipment which is not technically inconsistent with others Therefore, the handling process at quay can be affected and interrupted if there is any problem with facilities Secondly, occupational skills of staffs also influence cargo operation at quay In order to handle cargo, if there is no suitable stevedoring solutions that staffs have to give decision which depends on a number of workers, equipment, cargo owner’s truck, weather and so on, container cargo cannot be handled in a good manner

2.2.3 Container cargo congestion at yard

2.2.3.1 The real situation

According to a report of container team at Chua Ve terminal, there is a large number of container congestion at yard since 2006 until 2014 A detailed number of congested containers are shown in the following table:

Figure 9: The number of containers stagnated at Chua Ve terminal since 2006 -

2014 From statistics in above graph, it can be clearly seen that there is total amount of

879 TEU of total 455 containers which still stayed at yard since 2006 to 2014 Meanwhile, a largest number of congested containers are 273 which have been stayed at Chua Ve terminal since 2012 Majority of cargo at Chua Ve terminal are rubber, used rubber tyres, scrap metals, lead batteries, frozen products, etc

2.2.3.2 Causes of container cargo congestion at yard

There are a number of primary causes of container congestion at Chua Ve terminal yard consisting of trading contract problem, a category of cargo, intentionally renouncement of cargo owners and an impact of VINASHIN corruption

The first cause of this matter arises from the category of cargo Until now, majority

of cargo stayed at yard are temporary import for re-export cargo From 2011 to

2013, enterprises conducted temporary import for re-export service to import cargo

at Hai Phong Port These kinds of cargo include rubber, used rubber tyres, scrap metals, used electrical equipment, used electronic products, etc According to the issued list attached to Circular No 05/2014/TT/BCT on 27th January 2014 of the Ministry of Industry and Commerce (Ministry of Industry and Commerce, 2014), those categories of cargo are on the list of banned temporary import for re-export cargo As a result, these amounts of cargo could not be brought out of Chua Ve terminal, carried by the road to Mong Cai – Quang Ninh and then re-exported to

China On the other hand, Chinese government also tightened monitoring mechanism imported cargo Therefore, many consignments become banned imported cargo in China Because of close control of both sides which are imported and exported destinations, a variety of consignments still have been staying at Chua

Ve terminal indefinitely

Secondly, contributor to this problem stems from parties in a trading contract with a wide range of circumstances In the first case, a person who assigned as a buyer deny receiving cargo because of not signing the sale contract or cargo is incorrect category as committed In the other circumstance, a shipper/consignor does not state clearly the address of a cargo receiver or a receiver is not affordable to pay transportation fee for a shipper Moreover, a person who is assigned to conduct intermediary service for foreign companies is not delivered consignee documents; therefore, they reject to receive cargo In addition, the buyer and the seller cancel a contract or the buyer loses original documents; thus, they are not able to carry out procedure to receive cargo

Furthermore, the overdue custom clearance implementation also leads to renouncement of receiving cargo of cargo owners Estimated costs to be paid for a storage charge of many consignments have exceeded their actual value For instance for consignments of rubber and used rubber tyres, the cost for 10 years storage of these containers has reached to approximately 300 million VND /container; meanwhile, the actual value of these containers are only 10-20 million VND/container Obviously, cargo owners tend to leave these low valuable cargos at port instead of taking cargo and paying for a large amount of cost

Additionally, the corruption of the stated-owned Vietnam Shipping Industry Group (VINASHIN) in 2010 influenced adversely national economy in general and maritime field in specific including ports Chua Ve terminal is one of terminals remaining consignments of this corporation including ship equipment and machine After corruption, VINASHIN still left a number of containers at Chua Ve yard, increasing number of congested container at this area