Technical Report No. 8 PORT AND SHIPPING

I-4-11
Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports
will rise to 105 million TEU by the year 2006. It means that further
containerization is expected at the pace of more than 7% annually.
The shipping business has considerably changed in the last years. Ship owners
and ship operators had to face a fiercer competition in global markets. This has
led them to elaborate the following three strategies:
1) Global alliance, merger and acquisition
Ship operators have resorted to global alliance, merger and acquisition in
order to offer the best possible service to shippers by combining routes,
destination, frequencies of sailing and cut down the operation cost at the
same time through mass service effects. Some examples are:
- Joint-operation between P&O and Nedlloyd or Hanjin and DSR-Senator
- Acquisition of APL (American President Lines) by NOL (Neptune Orient
Lines)
- Merger of Navix with MOL (Mitsui O.S.K. Lines)
2) Larger container ships
Mega carriers, as the results of global alliance, merger and acquisition, have
ordered many larger container ships even under over-capacity business
environments. It enables to cut down the production cost per TEU: from US$
10 on small size ships to US$ 5-6 on Over Panamax type ships. In addition,
the operational speed of the new vessels is higher than that of the old ones,
e.g., ships over 5,000 TEU have now a standard speed of about 25 knots
while the 2,000-3,000 TEU capacity ships built a few years ago, could sail at
21-22 knots only. Higher operational speeds increase the actual carrying
capacity. (Refer to Table 4.2.2)
3) Hub ports
The assignment of larger ships theoretically leads mega carriers to a strategy
of “hub port” or “hub and spokes”. It is reported that the container terminal
accommodating Over Panamax ships should be able to handle at least 2,000
containers in 24 hours. The strategy is particularly shown in Kaohsiung where
Maersk operates its own private high productive terminal. It also needs to
develop feeder routes in order to serve small amounts of containers at small
ports. Mega carriers usually assign small and old container ships for such
services 2 .
2
Average container ship size assigned at Vietnamese ports in 1999: HCM City ports – 622 TEU, Hai Phong
– 312 TEU, Danang – 250 TEU.