Deepwater port in VN boosts traffic through Phnom Penh

Photo by: Heng Chivoan
The Phnom Penh Autonomous Port, as seen from a vantage point on the Japanese Bridge. Exports through the port increased almost a quarter in August, port figures show.

The Phnom Penh Post
Tuesday, 01 September 2009
Chun Sophal

Exports through Phnom Penh Autonomous Port rose by nearly a quarter in August as traders turned to new shipping facility

The Phnom Penh Autonomous Port is starting to see the benefits from the launch of the Cai Mep deepwater port in southern Vietnam, with outbound cargo increasing 22.65 percent in August compared with the same month a year earlier.

The gain follows a 0.84 percent increase in exports through the port in July, which in turn followed declining trade volumes across the first six months of the year.

Port General Director Eang Veng Sun said the improved fortunes were due to the new deepwater port in southern Vietnam's Ba Ria Vung Tau province.

Shipping goods down the Mekong River from Phnom Penh and then out through the port to the US - a key export market for Cambodia - was much faster than through Sihanoukville International Port on Cambodia's south coast, he said.

Because Sihanoukville lacked a deepwater port, goods had to be transferred to Singapore, Taiwan or Hong Kong in smaller vessels before being loaded into a larger container ship for the journey across the Pacific.

Comparative advantage
"I think that traders are seeking to gain whatever advantages they can due to the global financial crisis," Eang Veng Sum said. "That is why they turn to our port."

The port was also less than an hour from most factories in Phnom Penh, compared with the six- to seven-hour road trip to Sihanoukville, he said.
"I believe that exports through this port will continue to increase because most exported goods are made in Phnom Penh."

Port figures show exports for the first eight months of the year fell 15 percent compared with a year earlier as only 27,493 TEUs (20-foot equivalent units) passed through. In August, 5,063 TEUs were shipped down the Mekong, compared with just 4,128 TEUs a year earlier. July exports were up 0.84 percent year-on-year to 4,191 TEUs.

Bun Sovanna, a sales manager at Mitsui OSK Lines, said the Phnom Penh Autonomous Port was cheaper and two to three days faster than going through Sihanoukville.

"The time savings and the reduced expenses are the two main factors encouraging more and more traders to turn to the Phnom Penh Autonomous Port," he said.

The shipping company started using the port in mid-June to ship around 100 TEUs per month, Bun Sovanna added. Most of the goods transported were garments, 60 percent of which were for clothing label Gap.

The new deepwater port in Vietnam did not have the same effect on imports as on exports through the Phnom Penh Autonomous Port, figures show.

Imports handled at the port were down 23.81 percent year on year in August to 1,696 TEUs. Just 11,114 TEUs were handled across the first eight months of the year, down 32 percent from 16,442 TEUs a year earlier.

Eang Veng Sun said agricultural products and garments accounted for the bulk of exports through the port, whereas raw materials for the garment sector, construction materials and electronic items accounted for most imports.

Sihanoukville International Port General Director Lou Kimchhun said throughput decreased 22 percent over the first 8 months of 2009 but denied that the Phnom Penh rival was a factor. "I think that the decrease in shipping activity at our port is caused only by the global and regional economic crisis," he said.