Why does MSC, the world's largest shipping company, want to invest in Can Gio international transshipment Terminal?

By tuoitre.vn - 18/03/2024

The largest shipping company in the world, MSC, plans to invest in the Can Gio international transshipment port and relocate part of its transshipment activities to Vietnam.

MSC intends to relocate a portion of its transshipment operations to Vietnam.

According to the Can Gio international transshipment port project presented to the Prime Minister last week, the Ho Chi Minh City People's Committee reported that an international transshipment port is where containers are transferred from "feeder ships" operating on near-sea routes (branch lines) to larger ships (mother ships) for international transport routes.

Establishing an international transshipment port requires necessary and sufficient conditions. Among these, the necessary conditions include geographical location, natural conditions, and national policies on port development. The sufficient, decisive condition is the selection and establishment of transport routes by a leading global shipping company at the transshipment location.

Currently, the Can Gio international transshipment port project is receiving attention from MSC, which is exploring and expressing an interest in investing.

MSC is the world's largest shipping company, headquartered in Geneva, Switzerland. The company's shipping capacity exceeds 23 million TEUs per year, accounting for 18% of the global shipping fleet's total capacity. Its service lines connect to over 500 ports worldwide.

In Vietnam, MSC currently offers services to the container port system in Hai Phong, Da Nang, Cai Mep - Thi Vai, etc.

Annually, the MSC fleet transports over 1 million TEUs of import and export goods from Vietnam, connecting with major markets such as the United States, Europe, China, Japan, Australia, and Southeast Asia.

MSC plans to develop its intra-Asia network and establish a transshipment hub that will consolidate cargo volumes currently handled at various locations in Asia.

In April 2023, Terminal Investment Limited Holding S.A (a MSC subsidiary) and Saigon Port Joint Stock Company submitted a proposal to the Ministry of Planning and Investment for the project.

MSC plans to relocate part of its transshipment operations to Vietnam, building an international transshipment port and creating a transshipment center in Vietnam.

The total cargo volume through the port is expected to reach about 4.8 million TEUs by 2030 and about 16.9 million TEUs by 2047, with the goal of exploiting mainly international transshipment cargo by MSC.

Ahead of shipping companies' trends

According to the project, global container transport activity is currently very vibrant, especially the maritime transport route through the Pacific, which accounts for about 60% of global container cargo volume. This route connects Japan, South Korea, China, Vietnam, and Singapore with countries in Europe, the Americas, Africa, and Western and Southern Asia.

Currently, shipping companies with strong financial resources and large port systems are increasingly using large container ships up to 24,000 TEUs for intercontinental transport routes.

Smaller ships (up to 5,000 TEUs) are used for feeder operations. Thus, with the development trend of container transshipment transport mentioned above, ports need to ensure depth of shipping lanes, docks, and modern cargo handling equipment to serve large cargo ships.

Currently, cargo from countries in the region such as Cambodia, Thailand, Brunei, South China, and the Philippines is mainly transshipped in Singapore or Malaysia. If cargo from these countries is transshipped in Can Gio, the transportation distance can be reduced by about 30 - 70% compared to Singapore.

Moreover, the cost of handling container cargo in the Cai Mep - Can Gio area is currently about 54% lower for import and export containers and about 40% lower for international transshipment containers compared to Singapore.

The proposed location for the Can Gio international transshipment port has many competitive advantages, attracting international cargo from countries in the region such as Cambodia, Thailand, Brunei, South China, and the Philippines.