Box pile-up at Ho Chi Minh City causes delays

THOUSANDS of import containers piling up at terminals in Ho Chi Minh City are causing severe congestion and delays at Vietnam’s main gateway port.

A massive surge in imports into Vietnam combined with a squeeze on credit has left the main container terminals chock-a-block with unclaimed boxes, which has resulted in lower productivity and berthing delays.

The surge in imports would seem to have caught both terminal operators and shipping lines by surprise. Main terminal operator Saigon New Port reported a 46% rise in imports in the first months of 2008 compared to the same period last year, although at least one industry source put the figure at 70%.

“This in itself (the growth) would not have been such a disaster, but the boxes are staying as the importers are not picking them up,” an executive with a major shipping line in Vietnam told Lloyd’s List.

Containers are being left uncollected by importers who have been unable to obtain credit lines, in a combined squeeze on lending and soaring interest rates.

“A lot of people are being cut off from lines of credit,” said a shipping agent in Ho Chi Minh City.

Additionally some importers are allowing goods to stay in port while they wait for prices to rise in Vietnam itself, where inflation is now officially running at 25%.

According to local reports, at the end of May, the internationally run terminal, Vietnam International Container Terminal, had 13,000 teu stacked up its yard area, despite only having capacity for 11,000 teu. At Saigon New Port’s Cat Lai terminal 19,000 teu is stuck in the terminal, with 5,700 boxes kept in the port more than 15 days.

This in turn has led to regular berthing delays of anything from a couple of hours to two to three days. “Basically the terminal gets congested, productivity goes down and the time alongside the berth increases,” the shipping line executive explained.