Solutions to encourage container transport into ports

Currently, there are 18 ports in the province, all invested and operated by non-state enterprises. The port system has many different types and scales along the Vam Co and Soai Rap rivers. In particular, Long An International Port plays an important strategic role not only for Long An but also for the entire Mekong Delta and Southeast regions.

The province considers this a highlight for industrial, service and urban development. Currently, Long An International Port has completed and put into operation 7 wharves with a total length of 1,670m and 1 million m² of warehouse space, meeting the capacity to receive ships with a capacity of up to 70,000 DWT. Fully implemented according to the plan, the Port will reach a scale of 9 wharves, with the capacity to receive ships with a capacity of up to 100,000-200,000 DWT, meeting the diverse and large-scale needs of import and export activities as well as international logistics and tourism activities.

However, the reality is that enterprises investing and exploiting ports, especially seaports, are facing great difficulties. Because they are in the early stages, like other seaports, they are facing difficulties due to the lack of container sources for inbound and outbound goods, so there are almost no container ships entering the port.

The volume of container cargo is small, the cost of ships entering and leaving is high, and it is difficult for shipping lines to choose it as a destination for their journey. Therefore, initial support from the government through mechanisms and policies to encourage container transportation through the port is necessary (only when there are containers will there be ships transporting containers to the port). This is the responsibility of the provincial government as it has committed to always accompany and support investors for the common development and enhance the image of the province's investment destination.

The scientific and practical basis is clear and appropriate enough.

Experiences of some localities that have implemented policies to attract container cargo to ports such as Thanh Hoa, Ha Tinh, Thua Thien - Hue show that the results are very large not only for port investors, revenue from port services but also an important driving force to attract local investment. Analysis of the scientific basis and evaluation of the effectiveness of the policy to encourage container transportation through ports have been discussed in depth by experts and scientists at the Policy Roundtable Program organized by the Standing Committee of the Provincial People's Council and the Scientific Workshop on mechanisms and policies organized by the Provincial People's Committee.

Member of the Provincial Party Standing Committee, Vice Chairman in charge of the Provincial People's Council - Dr. Mai Van Nhieu and speakers, experts discussed and made recommendations at the Policy Roundtable Program

In reality, in the world, the government spending money to encourage shipping lines and cargo owners to use seaports is not a common measure, but some seaports have proactively applied financial incentive policies to attract ships and cargo, bringing about many-sided effectiveness.

Specifically: Antwerp Port has reduced port fees for large ships and new shipping routes; Jebel Ali Port (Dubai) and Rotterdam Port (Netherlands) have reduced port fees and provided business support services; Los Angeles and Long Beach Ports (USA) have also reduced port fees and supported fuel costs for ships using cleaner fuel when calling at the port; Incheon Port (South Korea) has reduced port fees and supported costs for shipping lines opening new routes to the port.

In Vietnam, while Hai Phong City and Ho Chi Minh City are the two localities with seaports that account for the main market share and collect port infrastructure fees, increasing logistics costs, and have no support policies, some central provinces such as Thanh Hoa, Ha Tinh, and Thua Thien - Hue have proactively introduced policies to attract container shipping by sea for both shipping lines and cargo owners.

First, Thanh Hoa province in 2019 had a policy to support 200 million VND/ship to Nghi Son port with a minimum frequency of 2 trips/month. In the period of 2019-2023, it supported 17.8 billion VND for 89/91 ships and brought the budget 1,180 billion VND (66 times the support cost spent). Next, Ha Tinh province in 2021 had a policy to support 200 million VND/ship to Vung Ang port with a minimum frequency of 2 trips/month. By 2022, due to difficulties in attracting, it had increased to 500 million VND/international trip and 300 million VND/domestic trip and 1-2 million VND/container corresponding to 20 feet - 40 feet for businesses with goods passing through the port.

By 2022 and lasting until December 2024, Thua Thien - Hue province also has a pilot policy to support 210 million VND/ship trip with a minimum frequency of 2 trips/month through Chan May Port and 800,000 - 1.1 million VND/20-foot - 40-foot container for businesses with goods passing through the port by container (except for temporarily imported, re-exported and transit goods). The 2022-2023 period has attracted 65 ships (44 domestic and 21 international) equivalent to 7,370 TEU ~ 110,640 tons.

Sharing risks, sharing benefits and building an image of a friendly, effective and safe investment destination

Reality has proven that the policy of supporting maritime transport vehicles, transport enterprises, and cargo owners transporting goods by container through ports in provinces such as Thanh Hoa, Ha Tinh, and Thua Thien - Hue has initially brought about clear results, not only in terms of state budget revenues being higher than the support costs spent, but also in terms of the very practical meaning of the motto "harmonizing interests and sharing risks" between the State and investors.

It is very necessary for Long An to prepare a policy to encourage container transportation through the province's ports, with sufficient scientific and practical basis. Investors have invested in logistics infrastructure according to the province's planning and are facing risks for this huge investment, Long An authorities will share with necessary support, within their authority, in accordance with the policy on encouraging the implementation of public-private partnership projects.

The Draft Resolution of the Provincial People's Council on the policy to encourage container transportation to ports in the province clearly identifies 6 factors: (i) Legal basis and practice of policy issuance; (ii) Supported subjects (shipping lines; domestic transport enterprises); (iii) The level of support is suitable for the province's budget capacity, has the effect of encouraging and attracting container transportation through the port, and harmonizes the interests of provinces and cities in the region (for example, 200-300 million VND/ship calling at the port with a minimum frequency of 2 trips/month; 1-2 million VND/container depending on the type of 20-foot, 40-foot container); (iv) Reasonable implementation time of the support policy (for example, a period of 2 years or 3 years, or at the time when the additional cost of the ship owner arriving at the port is zero); (v) Procedures for payment and settlement of support costs (State budget allocation, payment methods, settlement, etc.); (vi) Source of funding for implementation (expenditure in the state budget, allocation method).

Member of the Provincial Party Standing Committee, Vice Chairman in charge of the Provincial People's Council - Dr. Mai Van Nhieu and Member of the Provincial Party Standing Committee, Vice Chairman of the Provincial People's Committee - Dr. Nguyen Minh Lam chaired the Scientific Workshop on building mechanisms and policies to attract containers to ports in Long An province.

This policy is built on the principle of harmonizing interests and sharing risks between the State and enterprises, including: Port management - cargo owners (domestic import-export enterprises) - international shipping lines. First of all, in terms of benefits, there will be 3 major benefits.

Firstly, currently, import-export enterprises in the Mekong Delta and Long An province are carrying out international cargo delivery through ports with inappropriate locations, causing waste of time and costs. Therefore, the formation of international shipping routes at ports in the province will help shipping lines easily consider placing empty containers near ports or factories, thereby saving transportation costs, significantly increasing profits for enterprises, especially cargo owners and logistics enterprises.

Second, the impact of the formation of container shipping routes increases the scale and value of port operations, increases the opportunity to choose ports of arrival and departure for shipping lines and import-export enterprises through the port, thereby increasing revenue and profits for port service enterprises, import-export enterprises, and shipping lines.

Third, the effectiveness of port services, logistics, and import-export activities is important for GRDP growth, state budget revenue, and job creation, increasing income for workers in the province. And the indirect impact, which is very important and strategic, is to improve the readiness and quality of industrial and service development of the transport system in the province, thereby increasing the attractiveness of the investment destination, creating a strong competitive advantage to attract many investors to explore investment opportunities.

Regarding risks, first of all, it is the effectiveness of using the State budget to support business activities of enterprises. Second, it is the risk related to domestic regulations and agreements that Vietnam has signed on competition. Third, it is the risk in implementing regional linkage mechanisms and policies.

Therefore, to ensure the harmony of interests and risk sharing, the policy will aim to directly impact the cargo owners and ship owners - the decision makers on the method of container transportation and the port of destination; the scope of support is mainly to compensate for the additional costs compared to ports in the region, without affecting the costs and prices of imported and exported goods; in terms of support methods, the State budget only supports at a certain rate, the rest is shared by port managers, ship owners, and cargo owners. For enterprises benefiting from the policy, there must be commitments to implement specific targets on scale, quality, and service costs as prescribed by the Provincial People's Committee, especially infrastructure investors and port operators need to ensure conditions on port infrastructure, service quality, and port service costs according to the general orientation of the province.

In short, this policy focuses on enterprises, enterprises are the objects of support, participation and benefit. The significance of the policy is that the State and enterprises implement it together to enjoy and build the image of Long An province as a friendly, effective and safe investment destination.

Efforts to make a breakthrough in developing logistics infrastructure, enhancing competitive advantages to attract investment, and developing coastal economic zones

Long An has a very favorable, "prime" location, unique to the Mekong Delta and the Southeast with important economic driving axes of connectivity and diffusion. For the Mekong Delta, Long An is also the hub of 3/4 of the economic development corridors of the Region including: Urban - industrial economic corridor from Can Tho to Long An; Coastal economic corridor from Long An, Ca Mau to Kien Giang; Border corridor from Long An to Kien Giang. The highlight and hub of these corridors is Long An International Port - the center of the key intra-provincial traffic route connecting with the Vietnam - Cambodia international border gate and the economic development corridors of the Mekong Delta, Ho Chi Minh City and the Southeast.

According to Decision No. 686/QD-TTg, dated June 13, 2023 of the Prime Minister on approving the Planning of Long An province for the period 2021-2030, with a vision to 2050, there is an orientation to develop important industries and fields, striving by 2030: Developing logistics services into an important economic sector of the province, making Long An a gateway, a transit center for goods, warehouses connecting provinces in the Mekong Delta with Ho Chi Minh City, the Southeast. On the other hand, very importantly, also in Decision No. 686/QD-TTg, it has oriented to build Long An Economic Zone in Can Giuoc and Can Duoc districts, becoming a new growth engine in the direction of a high-tech ecosystem, innovation and logistics center of the province. Long An Economic Zone (with the nature of a coastal economic zone) is formed, will become a driving force, a breakthrough for the province to take off and grow strongly; At the same time, creating a "boost" for the development of the Mekong Delta.

As a province that comes later in this policy, it will have more advantages in applying it appropriately and effectively. The first effect is the breakthrough thinking in the policy to support enterprises, thereby liberating resources for investment in logistics infrastructure and creating motivation to realize the planning of coastal economic zones, forming a port city of the province. Therefore, the Standing Committee of the Provincial People's Council considers this Resolution a breakthrough for Long An province to maximize its potential and geo-economic advantages, create differences, enhance competitive advantages, accelerate economic development, promote social development, and firmly enter a period of development, prosperity and prosperity with the whole country./.

Member of the Provincial Standing Committee, Vice Chairman in charge of the Provincial People's Council - Dr. Mai Van Nhieu

Source: https://baolongan.vn/giai-phap-khuyen-khich-van-chuyen-container-vao-cang-a191581.html