With continuing trade tensions between the United States and China, the ratification of the European Vietnam Free Trade Agreement (EVFTA), and China’s tidal wave of manufacturing migration, the Vietnam industrial and logistics sector is poised for growth.
One of the leading Vietnam industrial sectors, Ho Chi Minh City’s road networks and Cat Lai Terminal have become overcrowded, causing investors to look for other port-accessible sites, fueling demand in Ba Ria-Vung Tau, with Cai Mep International Terminal poised to be Vietnam’s next high-capacity port choice.
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Vietnam Industrial – Economic Overview of the Province of Ba Ria – Vung Tau
Ba Ria – Vung Tau (BR-VT) is in the Vietnam industrial zone, located in the southern economic zone, BR-VT is one of Vietnam’s most appealing economic and investment destinations. Economic growth in recent decades has resulted in the province having one of the highest GDPs per capita and living standards in Vietnam.
In the first quarter of 2021, Ba Ria – Vung Tau in the Vietnam industrial zone saw favorable economic growth in industrial production, port services, and domestic travel.
Its sales increased by 6.7% year on year to more than US$953.46 million; the value of industrial production excluding oil and gas increased by 7.3%. Port services increased in value by 9.6%.
The province has accelerated development of several critical transportation projects to improve the connection to Phu My Town’s Cai Mep – Thi Vai port complex.
Vietnam Industrial – Overview of Cai Mep – Thi Vai port
Thi Vai – Cai Mep port is a deep seaport cluster in Ba Ria – Vung Tau situated at the confluence of the Thi Vai and Cai Mep rivers. It is part of the Vietnam industrial seaport system. This Vietnam industrial port is regarded as a modern deep-water transhipment port with the most advantageous geographical position in Southeast Asia. It is planned to handle container ships with a tonnage of up to 80,000 DWT and a throughput capacity of 600,000-700,000 TEU per year.
The number of products passing through the Cai Mep – Thi Vai area’s seaports is predicted to account for at least half of the total volume of products passing through seaports countrywide.
Cai Mep port benefits from a shift in China’s supply chain
Cai Mep port in the Vietnam industrial zone could become one of the world’s major ports. As we look forward to a prosperous and strong Vietnam by 2045, Ba Ria – Vung Tau, with its network of seaports and logistics, will play a key role during the process.
The government leader has directed key ministries and the southern province of Ba Ria – Vung Tau to construct the Cai Mep – Thi Vai port complex’s seaport and supply chain system to reach regional standards by 2030, with the goal of becoming a world-class seaport centre by 2045.
Ba Ria – Vung Tau is the entrance to Vietnam’s Southeast area, as well as one of the country’s important economic centres, accounting for 33% of the country’s GDP and connected to international maritime routes.
This port, along with the southern province and Hai Phong in the north, would establish a significant corridor connecting Hanoi and Ho Chi Minh City in Vietnam to China and Cambodia.
In 2020, the seaports of Ba Ria and Vung Tau handled 113 million tons of cargo, including 7.5 million TEUs of containers, accounting for 16 percent of the country’s total and 34 percent of containers passing through Vietnam’s seaports.
Margrethe Maersk, one of the world’s largest container shipping lines, arrived successfully at the CMIT in October, making the harbour one of just 20 in the world capable of accepting such a massive ship.
Not only does the establishment of transport lines from Cai Mep to Europe and the United States address Vietnam’s long-distance ocean freight problem, but it also lays the groundwork for attracting international transhipment commodities and progressively bringing goods to Vietnam. It is a great benefit not only for the Southeast region’s economy but also for the national level.
Vietnam’s industrial logistics business is expected to grow in 2021
According to SSI Securities, the ports and logistics sector’s development prospects are favourable in 2021 with businesses expected to expand considerably due to the probability of global trades recovery this year.
The security firm anticipates that the port and logistics industry’s revenue will grow by 10% in 2021. For example, expanding Cai Mep – Thi Vai and Lach Huyen seaports might lure large ships to Vietnam rather than Singapore or Hong Kong.
Permalink Port – Vietnam’s largest deep seaport – will likewise achieve at least 80% of its intended capacity this year and achieve its maximum capacity of 1.5 million TEU by 2022.
With a total expenditure of $520 million and the potential to accept the world’s largest ships (up to 200,000 DWT), Gemalink is the largest seaport in the Cai Mep-Thi Vai complex.
Additionally, Gemalink’s executives requested the government and vital ministries that the port’s infrastructure be completed to connect it to the Cai Mep – Thi Vai seaport complex, expressways, and the Phuoc An Bridge. Hopefully, a railway line connecting the port to the national railway system connecting Laos, Cambodia, and Thailand will be finished shortly.
The government leader has directed relevant ministries, agencies, and the southern province of Ba Ria-Vung Tau to construct the Cai Mep-Thi Vai port complex’s seaport and logistics system to reach regional standards by 2030 and to become a world-class seaport centre by 2045.
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Conclusion
The establishment of sea transport routes from Cai Mep to Europe and the United States will not only solve Vietnam’s long-distance ocean freight problem; it will also serve as the foundation for attracting international transhipment commodities and gradually bringing Cai Mep to Vietnam.
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