The seven international container terminals in the Cai Mep-Thi Vai deepwater port complex in southern Vietnam are struggling with such low demand that they have resorted to price undercutting, further driving profitability down.
A Vietnam Seaport Association report said the seven—SP-PSA International Port, Cai Mep International Terminal (CMIT), SP-SSA International Terminal, Gemalink-Cai Mep Deep-Sea Container Terminal, Tan Cang-Cai Mep Container Terminal (TCCT), Tan Cang-Cai Mep International Terminal, and Saigon International Terminals Vietnam (SITV)—used only up to 20 percent of their capacity last year.
The relatively new terminals were built starting from 2007 at a total cost of more than US$2 billion.
The low traffic has caused them to slash service fees to just $32 per container on average against the $88 per container needed to break even. There were even port operators offering handling charges of just $23 per box, the association said.
Both CMIT and SP-PSA reported losses for 2011 amounting to VND460 billion, according to the Vietnam National Shipping Lines.
For now, the ports’ developers are implementing stopgap measures to overcome their difficulties.
Since late 2011, SITV and SP-PSA have shifted to bulk cargo handling and tourism cruises, while TCCT started accepting bulk cargo, general cargo, farm produce, and steel in August 2012. Gemalink in 2012 decided to slow down on its investments until the national economy recovers.