RECOMMENDATIONS TO RELIEVE CONTAINER CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT STOCK COMPANY – CHUA VE TERMINAL

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

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

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 thepresent age, along with the development of science and technology, container which is carried onmega ships is no longer impossibility And container shipping service has brought huge profits for theeconomy

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 incontainer shipping Although having a natural advantage along with a growing development ofseaports, instead of being able to gain significant profits from container transportation, Vietnam has tospend an amount of money in dealing with container cargo congestion at port The storage ofcongested container at port causes the loose of not only an expense but also profits when a containercannot 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 Thisreport 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 providedinformation 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 DevelopmentCFS 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

1 Necessity of the research

Located near the international maritime lane, maritime transportation plays a crucial role in foreigntrade activities of Vietnam Recent years, thanks to open door policies of the government and rapidgrowth 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 increasingsignificantly, especially container cargo

In the present age, during the process of economic integration of the country, Hai Phong Port isconsidered as an important port in bridging trade between the Northern cities and other provinces andcities as well as between Vietnam and other nations in the world With its strategic location along withstrong growth of seaborne trade, instead of gaining significant benefits from container shipping, thePort of Hai Phong Joint Stock Company has been faced container congestion which affecteddetrimentally 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 sufferedconsequences from container cargo congestion at gate, quay and yard This problem causes a loss ofrevenue including storage charge and other cost related to cargo storage, a time-consuming stay ofships and cargo at port meanwhile “time is money” in maritime field and so on Container cargocongestion not only influences directly to Chua Ve terminal but also national economy and society ingeneral

Therefore, the topic “Recommendations to minimize container congestion at the Port of Hai PhongJoint 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

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 incongestion costs or in queue which are increasingly accumulated, being featured visually [ CITATIONHil12 \l 1033 ]

A port typically experiences internal bottlenecks in which they are resulted in a queue; for example:loading and discharging quays, locks, etc [ CITATION Bla10 \l 1033 ]

In fact, there is no common norm to define cargo congestion at port so far According to Dr UsmanGidago, congestion in ports is an issue related to delays, queuing and additional time of voyage anddwell of ships or cargoes at the port[ CITATION Pat08 \l 1033 ] From this point of view, it can beseen that cargo congestion at port is a part of port congestion in which flow of cargo is interrupted ordelayed 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[ CITATION Gid15 \l 1033 ]:

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

- Ship work congestion: is mainly caused by delays in procedure for loading and dischargingship 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 theport If there is any problem occurring on the way to the port, it could result in queuing of truckcoming 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 unloadingcargo

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

- Ship entry/exit route congestion: happens when there is any stoppage on the marine side access

- 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 andunloading equipment

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

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

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

- Hinterland connections: if hinterland infrastructure is utilized excessively where the port islocated 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 portcongestion including cargo congestion and ship congestion In terms of cargo congestion, there arethree 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 oftruck 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 beyondallowed time or excess a maximum capacity of storage area

- Cargo congestion at quay: this type of congestion related to loading and unloading processwhen 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 freightcongestion at port[ CITATION Pat081 \l 1033 ]

- 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 andthe 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

- Lack of reserve capacity to deal with recurring surges of demand placed on ports.

- Pilferage and smuggling resulting in tight controls which impede a free and efficient movement(7) Maintenance

Inadequate maintenance policies which result in a high proportion of equipment being out ofservice due to:

- 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 bringtemporary 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 beenoccupied by urban developments

- Activities carried out in the port area, not related directly to cargo handling, which may conflictwith 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 becomeone of the leading port operators in the North of Vietnam Located in the triangle economic zoneHanoi – Hai Phong – Quang Ninh, a well-developed area with good infrastructure in transport, Port ofHai Phong is the most popular destination for the export and import activities not only of thoseprovinces 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 Terminaland Bach Dang Terminal

From 1st July, 2014, Hai Phong Port has transformed its legal form from Limited Liability Companyinto Joint-Stock Company The company operates under the international name “Port of Hai PhongJoint-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 operationplaces were built In wartime and subsidizing period, port mainly operated general cargoes, aid andexported agricultural product In the second area, in a period of war, military cargo and buildingmaterials were operated

Until 1995, because of requirements of separating Chua Ve Terminal into two enterprises: Chua VeStevedoring Enterprise and Doan Xa Stevedoring Enterprise Chua Ve Stevedoring Enterpriseremained 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 PhongPort, 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 foroperation.

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 withthe handling capacity of 500,000 TEU/year Chua Ve Terminal is the international standardizedmodern container terminal, operating on the basis of application of information technology, havingprofessional staffs in the field of management of container port operation Chua Ve Terminalconstantly 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 inspectionand 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

2.1.3 Infrastructure

Table 1: Storage area at Chua Ve Terminal

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 designedaccording to standard of first level terminal Chua Ve terminal has -8.4m deep alongside and 175mL.O.A Yard area is 150,000 m2 with wharf surface pressure is 8-16 T/m2, being able to handle 5 shipssimultaneously with throughput capacity about 500,000 TEU/year

Table 3: Equipment at Chua Ve terminal

EQUIPMENT

Gantry cranes (QC) 04

Portal cranes (PC) 05

Rubber Tyred Gantry (RTG) 10

Rubber Tyred Mobile Crane 02

Forklift of all kinds 09

Container tractor, trailers 26

Electronic weighing bridge 120

tons

01

Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

2.1.4 Organization

Figure 2: The diagram of organization at Chua Ve terminal

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Business and Marketing Dept.

Container Team

Container Team

Techniques and Materials Department Crane Team

Mechanized Team

Mechanized Team

Industrial Hygiene Team Industrial Hygiene Team

Salary Department

Salary Department

Administration and Health Department

Administration and Health Department

Finance and Accounting Department

Finance and Accounting Department

Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

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 PhongPort, 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 outputtarget, price, materials, forwarding plan, collecting all information about annually, quarterly and monthly plan inorder to inform for Director

o Business and Marketing Department: exploit domestic and foreign market, negotiate and conduct economic contract

o Operation Department: work out and conduct a production plan, discuss and negotiate with involved organizations,cargo owners, vehicle owners so as to carry out the plan

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

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

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

- Teams:

o Mechanized Team: load and unload cargoes in accordance with stevedoring solutions; manage vehicle and equipment

o Crane Team: manage vehicle and equipment; ensure technical condition for vehicle and equipment as well as plan aperiodic repair

o Handling Team: handle cargo for ships; handle cargo at warehouse and yard

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 forwardingprocedure at port; keep track of the time of container demurrage

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

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- 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

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

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Indicators Unit Year 2013 Year 2014

It can be seen that the results in 2014 was lower than that in 2013

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

- 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 VNDless 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

2011 2012 2013 2014 0

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

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

From the above chart, it can be obviously seen that an amount of container throughput followed a downward trend Specifically, inthe period of four years, a volume of container throughput was the highest in 2011 with 552,120 TEU In the next two years, therewas a gradual decrease of an amount of container throughput from 446,693 TEU to 395,143 TEU Chua Ve Terminal witnessed thelowest 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 itscapacity from 2012 to 2014 The main reasons for a decrease in a volume of container throughput at Chua Ve terminal in recentyears is an increase introduction of container ports within Hai Phong in specific and Vietnam in general Because of increasingdemand of container shipping, a variety of container ports were built to meet the need, increasing competitiveness among theseports 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[ CITATION PIL15 \l 1033 ] Because of numerous container ports inarea, Chua Ve terminal gradually reduced its market share; hence, container throughput also decreased although the terminal hasenough 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 anamount of container throughput at Tan Vu terminal rose slightly

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

2011 2012 2013 2014 0

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

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 shipcan 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

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

In terms of infrastructure, Tan Vu terminal is well equipped with the most advanced and modern facilities which can servecontainer ships and container cargo sufficiently and effectively This terminal also has a larger area of warehouse and CY and alonger 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 theirdestination for services That is a reason why an amount of container throughput at Chua Ve terminal decline considerably in recentyears

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

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 lowvolume of cargo throughput Because of an introduction of various new container terminals at Hai Phong area, Chua Ve terminalhardly compete to these terminals, especially Tan Vu terminal – also be one branch of Hai Phong Port Thus, an amount ofcontainer cargo throughput of Chua Ve terminal in recent years decreases dramatically As a result, a number of arriving containertrucks 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 thisterminal

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 communicationnetwork In the first place, the road system connecting ports along Chua Ve – Dinh Vu route is dramatically downgraded andoverloaded, especially the T-junction of Chua Ve, Nguyen Van Linh Street and Dinh Vu industrial zone This is the main andunique road route that connects Hai Phong port with highway 5 to Hanoi and adjacent cities in order to transport cargo from thegathering destinations to Hai Phong port and deliver imported cargo from the port to the other local areas Nearly 90% of anamount of import and export cargoes through the port is transported via this road system A number of container trucks frequentlytravel across the T junction area; meanwhile, this area is small and narrow along with a significant degradation of the road As aresult, this leads to traffic congestion in many hours, especially at rush hour In 2010, there were many container trucks stand stilled

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

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 inand out the terminal When trucks come in the gate, truck drivers or cargo owners have to inform security guard informationincluding: name of truck driver, truck number, trailer number, container number, etc., so that a guard enters data in a computer orvehicle register book Additionally, forwarding staffs also check “Inspection Certificate” of a truck in order to identify allowedloading capacity of the truck before allowing a truck to enter the terminal It can be seen that there are many procedures to becarried out before a container truck can come in the terminal If this process is conducted slowly and time-consuming, especiallywhen 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 rarelyhappens at Chua Ve terminal With the capacity of handling 550,000 TEU/year, Chua Ve terminal has sufficient equipment tohandle a volume of container in recent years; for example, in 2014, the total volume of container cargo throughput at Chua Veterminal was 378,051 TEU, being about 171,000 TEU less than the actual capacity of the terminal Nonetheless, if an amount ofcontainers 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 occupationalskills of staffs First of all, in terms of infrastructure, although Chua Ve terminal has been equipped relatively sufficient facilities to

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

handle container cargo at quay, there is some outdated equipment which is not technically inconsistent with others Therefore, thehandling process at quay can be affected and interrupted if there is any problem with facilities Secondly, occupational skills ofstaffs also influence cargo operation at quay In order to handle cargo, if there is no suitable stevedoring solutions that staffs have togive 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 2006until 2014 A detailed number of congested containers are shown in the following table:

Figure 8: The number of container stagnated at Chua Ve yard since 2006 to 2014

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

Figure 9: The number of containers stagnated at Chua Ve terminal since 2006 - 2014From 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 Veterminal since 2012 Majority of cargo at Chua Ve terminal are rubber, used rubber tyres, scrap metals, lead batteries, frozenproducts, 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, acategory of cargo, intentionally renouncement of cargo owners and an impact of VINASHIN corruption

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The first cause of this matter arises from the category of cargo Until now, majority of cargo stayed at yard are temporary importfor re-export cargo From 2011 to 2013, enterprises conducted temporary import for re-export service to import cargo at Hai PhongPort 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 andCommerce[ CITATION Min14 \l 1033 ], 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 Ninhand 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 importedand 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 ascommitted In the other circumstance, a shipper/consignor does not state clearly the address of a cargo receiver or a receiver is notaffordable to pay transportation fee for a shipper Moreover, a person who is assigned to conduct intermediary service for foreigncompanies 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 forconsignments of rubber and used rubber tyres, the cost for 10 years storage of these containers has reached to approximately 300million VND /container; meanwhile, the actual value of these containers are only 10-20 million VND/container Obviously, cargoowners tend to leave these low valuable cargos at port instead of taking cargo and paying for a large amount of cost

Do Khanh Ly – GMA 02 Page 35

Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock Company – Chua Ve terminal

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

2.2.3.3 The negative influence of accumulated containers

Obviously, ownerless containers staying at Chua Ve terminal affects society, management agencies, shipping lines as well as Chua

Ve terminal itself detrimentally

First of all, this problem influences society in terms of environment and trading activities In the first place, all containers havebeen placed outdoor for a long time, being affected directly by weather which means that these containers are not covered when it

is rainy or sunny

Do Khanh Ly – GMA 02 Page 36