Theories of seaport
Definition
According to the Vietnam Maritime Code (2005), a seaport is defined as an area comprising both port land and port waters, equipped with the necessary infrastructure and facilities to facilitate the arrival and departure of seagoing vessels for cargo loading and unloading, passenger services, and other related activities.
A seaport, as defined by the Vietnam Encyclopedia (1995), encompasses both land and water areas equipped with facilities and infrastructure for maritime activities It serves as a hub for ships to dock, load and unload cargo, transport passengers, and conduct repairs and maintenance on vessels and their components Key features of a seaport include berths, access roads, rail connections, warehouses, and repair workshops.
Seaports serve as crucial hubs in the transport chain, acting as points of rotation for goods and passengers rather than merely the start or end of transport processes These areas are defined through legal, economic, and technological lenses, where maritime and land transport routes converge Essentially, a port facilitates the exchange of goods and passengers between ships and land-transport vehicles, highlighting its integral role in global logistics and trade.
Seaports are essential facilities that encompass both land and water areas, featuring critical infrastructure like navigation channels, breakwaters, berths, warehouses, and workshops These components enable the efficient arrival and departure of ships for the exchange of goods and passengers, while also facilitating various maritime services.
Classification of seaports
According to application, seaports can be divided into four types of military port, civil port, port of refuge and port of fuel supply.
Military Port is a port used for military purposes such as the home places of military facilities and military exercises.
A civil port serves the needs of ordinary citizens, distinguishing itself from military ports It encompasses various types of facilities, including traffic ports, commercial ports, and specialized ports such as fishing, entertainment, tourist, container, bulk, and liquid-cargo ports.
Port of refuge is the port with specialized function of allowance vessels to landing in special situations or distress.
Port of fuel supply is the port operating in a defined function of storing, supplying and distributing fuel for vessels right on their way or other demands.
1.2.2 According to Economic sense of traffic
According to Economic sense of traffic, seaports fall in to three types of international port, national port and local port.
International Port is a port in a country to serve the marine activities among different nations even the activities of vessels or persons who do not have nationality from this country.
National Port is a port in a country to serve the marine activities between this country and other nations and among different regions in the country.
Local Port is a port in a region of a country with the main function to serve marine activities within this region.
1.2.3 According to height of berth
According to height of berth (H), seaports can be separated in four types of Grade I, Grade II, Grade III and Grade IV.
The port grade I is a port with the height of berth greater than or equal to 25 meters.
The port grade II is a port with the height of berth greater than or equal to 20 meters and smaller than 25 meters.
The port grade III is a port with the height of berth greater than 10 meters and smaller than 20 meters.
The port grade IV is a port with the height of berth equal to or smaller than 10 meters.
1.2.4 According to decentralization of management of seaport
Seaports can be categorized into three types based on the decentralization of their management: ports managed by the government, ports overseen by local authorities, and ports controlled by private enterprises.
1.2.5 Classification according to Vietnam law
According to the Government's Decision No 70/2013/QĐ-TTg regarding the classification of seaports in Vietnam, ports are categorized into three types based on various criteria Key factors for assessing and grading seaports include the attractiveness of the port area, which encompasses aspects such as geographical area, population, urban type, economic status, industrial situation, maritime services, and transport infrastructure Additionally, the role and influence of ports on local, regional, and national economic development are considered Important metrics include the size and capacity of the port, such as cargo volume, harbor length, and current and planned tonnage capacity Furthermore, the development of ports must follow a construction trend that prevents uneven distribution across provinces and cities, as outlined in Article 59 of the Vietnam Maritime Code.
Seaports are classified into two types based on their scoring system: Seaport Type I, which receives 50 points or more, and Seaport Type II, which scores below 50 points Seaport Type II primarily caters to specific business needs of enterprises For further details, refer to Appendix 1.
Vietnam seaport system consists of three levels of seaports: 17 seaports Type
There are 23 Type II seaports and 9 Type III seaports, with Type I seaports playing a crucial role in enhancing the national economy and inter-regional development Type I seaports, also known as international transshipment ports, serve as vital gateways for economic growth and societal advancement, classified further into Type IA Type II seaports focus on the economic and social development of their local areas, while Type III seaports are dedicated to specific business operations Overall, seaports of Types I, II, and III vary in size and capacity.
Seaports can be categorized based on various criteria, including their function and location, which encompasses general ports, dedicated ports, container ports, transshipment ports, and international ports Additionally, they can be classified according to the port management model, such as service ports, tool ports, port leasing, and commercial ports Other factors influencing classification include object management, the fundamental functions of the seaport, natural and maritime conditions, and technical aspects of construction.
Mission and functions of seaport
The general mission of seaports can be divided in to two categories of the passive role and the active role.
Seaports play a crucial passive role in adapting to the economic needs of their regions, serving as vital infrastructure for societal and economic development The growth of local industries drives the demand for efficient transportation of goods and services, leading to increased import and export activities Seaports are favored for their cost-effectiveness, capacity for large shipments, and compatibility with various goods, which further amplifies their demand and scale Consequently, provinces and cities strive to develop ports that meet these requirements, as the establishment and expansion of seaports significantly enhance economic status and boost trade activities.
The active role of seaports significantly boosts the economy by fostering the development of cities and industrial zones Their establishment enhances local trade and the exchange of goods and services, leading to increasingly dynamic urban areas This growth results in the creation of industrial parks and new job opportunities, ultimately improving living standards Seaports are viewed as a transformative solution that drives advancements in transportation and economic development.
Mission of seaport according to classification of Government in Vietnam
The classification of seaports aims to enhance state management policies and improve oversight for various port operators This framework encourages the development of individual ports, boosts service quality and productivity, increases management efficiency, and addresses societal needs while adapting to international standards.
There are 17 Type I ports, categorized into three groups based on their functions Some of these ports serve as international gateway ports, facilitating vessels on global main lines, while others specifically cater to Asia-line services The remaining Type I ports lack the capacity to handle these services and cannot discharge containers.
Type IAA is international gateway port to serve the main routes.
Type IA is international gateway port serving the Asia lines.
Type IB is International Port Services serves traditional shipping container or inter-regional services.
Port Type II primarily serves coastal shipping and the export/import of specific goods like wood chips, coal, and minerals, with its mission and development closely tied to the local industry Generally smaller than Type I ports, Type II ports have a limited user capacity and are managed locally, although they require government guidance for effective development and management.
Port Type III plays a crucial role in supporting specific industries, with local industries responsible for its expansion, maintenance, and management The State oversees safety inspections, environmental protection, and administrative tasks related to Port Type III operations.
The maritime economy encompasses six key sectors: port economy, fishing and aquaculture, shipbuilding, oil and gas exploitation, marine ore extraction, and tourism For a coastal nation like Vietnam, enhancing and modernizing its seaport system is crucial for rapid and sustainable maritime economic growth Competitive and well-developed seaports are essential not only to meet domestic needs but also to align with global standards, thereby fostering the growth of interconnected sectors.
Seaports play a crucial role in the national transportation system by serving as key hubs for loading and unloading cargo They facilitate the transfer of goods between various transport modes, including road, rail, and sea Essential machinery, such as cranes, hoists, and conveyors, is necessary for efficiently moving cargo between vessels and landing areas Different types of cargo, including containerized and bulk goods, require specialized handling methods to ensure safe and effective processing at seaports.
Warehousing plays a crucial role in seaport operations, as the clearance of goods for import or export requires time Consequently, cargo owners consistently need storage solutions for their goods at the ports.
Seaports play a crucial role in supplying fuel and essential accessories for seagoing ships When a vessel arrives at a port, it is vital that the necessary services and supplies are readily available to ensure efficient operations.
Seaports serve as crucial logistical and distribution centers, functioning as intermodal hubs within supply chains and providing door-to-door services for customers These centers coordinate activities across multiple supply chains, enhancing the value of goods from origin to destination In this integral supply and logistical chain, seaports play a vital role by organizing and streamlining the logistical processes involved.
Seaports must offer essential services to both ship owners and cargo owners, including tugboat assistance, ship chandlery, cruise ship transportation, shipping agency support, and mechanical repairs.
Seaports have historically been vibrant hubs of commerce and trade, serving as vital junctions for various transportation methods Their strategic locations, often situated along international maritime routes and close to major cities and industrial zones, enhance their appeal Additionally, connectivity to highways and national roads further boosts their potential These favorable conditions position seaports as emerging commercial centers, not only within their nations but also on a global scale.
The port area serves as an ideal location for constructing factories and enterprises across various industrial sectors, as marine transport significantly reduces costs compared to other transportation methods This is particularly beneficial for the manufacturing industry that relies on imported raw materials, as exporting goods via sea transport leads to substantial savings, ultimately lowering product prices and enhancing competitiveness in the global market Additionally, industrial enterprises, tourism companies, and service providers can collaborate to establish an economic zone, fostering synchronized and efficient development.
Seaports and urbanization are interlinked, with each influencing the other's growth over time As cities expand, they play a crucial role in facilitating the export of goods and the distribution of imports, which in turn fosters the development of port cities These urban areas become hubs for shipping agents, insurance firms, and traders, attracting labor from surrounding regions and accelerating the urbanization process.
Cultural centers, tourist resort and entertainment
Facilities at seaport
Infrastructure of seaports including insight infrastructure and outsight infrastructure.
Figure 1.1: Components of port infrastructure
The port area features essential infrastructure such as piers, wharves, warehouses, factories, offices, service facilities, and internal transport systems Additionally, it is equipped with communication equipment, electricity, fresh water, and various ancillary buildings, all permanently installed on the port lands and the waters adjacent to the jetty.
Warehouse is a large building where raw materials or manufactured goods may be stored before their export or distribution for sale.
Berth is a fixed structure in a harbor, used for ship mooring, loading and unloading of goods, picking up or discharging passengers and performing other services.
Port land is a restricted area designated for the development of essential infrastructure, including wharves, warehouses, storage yards, factories, offices, and service facilities This region also encompasses transportation systems, communication equipment, and utilities such as electricity and fresh water A jetty, a permanent structure within a harbor, serves critical functions such as ship mooring, loading and unloading goods, and facilitating passenger transfers.
Berths Warehouses, factories, offices Communication system, electricity, fresh warter Internal transport systems
Channels of the port marine Lighthouses, marking buoys and signs
The port water area is a designated zone surrounding a harbor that includes essential features such as ship return areas, shelters, transshipment zones, storm shelters, and quarantine facilities This region plays a crucial role in vessel operations and encompasses waiting areas, the water in front of the port, and the in/out channels leading to the harbor.
The waiting area is situated offshore, away from the port berths, at the boundary between the sea and the estuary This designated space serves as an anchorage for ships awaiting the completion of clearance procedures before they can enter the port.
The water area in front of the port, known as the landing zone, is crucial for ship docking and mooring The depth of this water significantly influences the port's development potential A deeper harbor enhances the port's capacity to accommodate larger vessels, thereby improving its overall functionality and efficiency.
The harbor's flow area, situated between the waiting zone and the water in front of the port, is crucial for maritime operations Key factors such as tidal currents, sediment deposition, waves, wind, and channel dimensions significantly influence the port's capacity to accommodate vessels and ensure safe navigation Navigation channels, designed to be wide and deep, facilitate the passage of larger ships to the port Additionally, navigational aids like lighthouses and marking buoys guide vessels safely in and out of the harbor, especially during adverse weather conditions or low visibility.
Breakwater is a barrier built out into a body of water to protect a coast or harbor from the force of waves.
A seaport is typically associated with coastal locations; however, it can also be situated within an estuary, away from the open sea, as long as it has navigable channels and berths for receiving vessels Seaports may consist of one or multiple harbors, each containing several berths to accommodate various ships.
The port superstructure encompasses all essential assets and equipment necessary for seaport operations, including tugboat systems, cargo handling equipment, and internal transportation tools These resources facilitate the efficient movement of goods and provide office spaces for operational management, supporting a variety of port services.
The asset at seaport includes the assets inside the office building and the workshop They may consists of ships, generators, machine for repairing ships and other equipment.
Seaports are equipped with a variety of loading and unloading machinery, including different types of cranes such as frame, rail, and mobile cranes on wheels or caterpillars Additionally, they utilize forklifts, suction pumps for bulk and liquid cargo, conveyors, tipper wagons, automobiles, and locomotives to facilitate efficient cargo handling.
Activities at seaport
1.5.1 Activity general classification according to serving subjects
According to the serving subjects, activities at seaports can be listed at three types that are Services related to ships, Services related to cargo, and General services.
Shipping agency services involve acting as a shipping agent responsible for managing shipments and cargo, as well as safeguarding the interests of ships at ports and harbors around the globe on behalf of ship owners.
Ship Supply Services are the activities to provide the ships all the needed services, fresh water or goods and products
Ship Repairing Services are the activities to discuss a marine engineering, refit or fabrication project.
Towing Service is the activity to use the tugboats to push or tow the vessels.
Ship Sanitation Service is the activity to use sanitary tools to wipe the deck, make garbage dumping and clean the device on board.
Inspection and Counting Cargo Service is the activity to examine the appearance quantity and quality of goods.
Cargo Handling Service is the activity to move cargo onto and off the ships or vehicles.
Warehousing business services for exported and imported goods involve the storage of products at ports during the waiting period for international export or domestic distribution These services play a crucial role in managing inventory and ensuring timely delivery to markets.
Retail Delivery Service is the activity to ship the goods to the warehouse of customers or the defined places as authorized.
Warehouse and Distribution Services encompass both warehousing and retail delivery activities, with the port assuming responsibility for the goods throughout the entire process.
Customs clearance services involve the process where ports are contracted to handle customs procedures on behalf of cargo owners, ensuring compliance with customs regulations and facilitating the smooth movement of goods.
Maritime Agent Services encompass the management of shipments and cargo, safeguarding the interests of clients at ports and harbors globally These services are conducted on behalf of ship owners, managers, and charterers, ensuring efficient handling and representation in maritime operations.
Shipping brokerage services act as essential intermediaries, facilitating negotiations between ship owners and charterers for cargo transportation, as well as between buyers and sellers of ships These specialized financial activities ensure smooth transactions in the maritime industry.
Business Services for non-ship transport are the activity to become the freight forwarders or consolidators to serve the import and export of goods.
1.5.2 Activities at seaport according to Vietnam law
According to Decision No 10/2001/NĐ-CP dated on March 19, 2001 regarding business conditions for maritime provisions of Vietnam Government, activities at seaport are divided into 9 criteria.
Ship agent services play a crucial role in facilitating the operations of ship owners by managing various tasks, including coordinating the entry and exit of ships at ports, arranging towing and pilot services, and overseeing the loading and unloading of cargo as well as passenger embarkation and disembarkation They ensure that all necessary documentation for cargo and passengers is prepared and delivered to consignees, handle customs clearance, and manage payment collections, including freight and compensation Additionally, ship agents are responsible for arranging essential supplies like fuel, food, and fresh water for vessels in port They also handle the creation and signing of ship charter contracts and cargo handling agreements, and are authorized to address maritime disputes and other related matters on behalf of ship owners.
Agent services for sea transport
Agent services for sea transport differ from ship agent services as they are tasked with carrying out responsibilities on behalf of cargo owners These agencies organize and manage transportation support, goods forwarding, and the transport of passengers and baggage under maritime or multi-modal transport contracts Additionally, they lease or rent shipping facilities, handling equipment, warehouses, wharves, piers, and other specialized maritime tools on behalf of the cargo owner They also act as container agents and may handle various other matters as authorized.
Marine brokerage services serve as intermediaries in the negotiation and signing of various maritime contracts, including those for the carriage of goods, passengers, and luggage Brokers facilitate agreements for marine insurance, ship hiring, buying and selling vessels, towage, and crew leasing, ensuring compliance with the specific needs of each trustee involved in the maritime activities.
Vessel supply services play a crucial role in ensuring that ships are equipped with essential provisions, including food, fresh water, fuel, lubricants, and equipment These services also encompass additional tasks such as providing medical care, recreational activities for both passengers and crew members, and facilitating transportation and immigration processes for crew changes.
Inspection and counting services involve accurately tallying the quantity of goods upon their delivery or receipt, whether by ship or other transportation methods, as entrusted by the shipper, consignee, or carrier.
Sea towage services involve the operation of pulling, pushing, or supporting ships and other floating vessels in maritime environments or near seaports These services ensure safe navigation and operational efficiency for vessels entering or operating within designated water areas.
Ship repair service at the port is the service to perform the tasks of repairs and maintenance of ships when anchorage at the port
Ship sanitation services is the service to perform for the collection and treatment of waste, waste oils, waste from ship while anchorage or mooring at ports.
Under Decision No 10/2001/NĐ-CP, cargo handling services involve the loading and unloading of goods at ports, adhering to the specific technological processes required for different types of cargo.
Vietnam seaports are not only engaged in the services outlined in the government text system but also actively provide additional activities One key service is warehousing, which involves storing goods in the port's storage facilities for customers during the waiting period for export or distribution.
Logistics and distribution at Vietnamese seaports represent a burgeoning sector, offering customers comprehensive services that encompass the entire storage and distribution process of goods This service integrates various essential tasks, including transportation, stock control, warehousing, and the monitoring of goods flow.
Besides, there are some small activities that supported to customers of seaports such as supply of marine and import/export services, tourism services, security operations.
Seaport performance assessment criteria
The extensive literature on port efficiency is primarily quantitative and can be categorized into two main types of indicators: macro-performance indicators, which assess the overall economic impact of ports, and micro-performance indicators, which analyze the input/output ratios and productivity of port operations.
1.6.1 Macro-performance indicators of seaport operations
Macro-performance indicators for port operations have been introduced to evaluate the modernity and adequacy of seaport infrastructure and superstructure, as well as their overall output capacity.
Figure 1.2: Macro-performance indicators of seaport operations
The bustling activity of a port can be gauged by the number of vessels, Gross Registered Ton (GRT), and Deadweight Ton (DWT) that enter and exit annually For instance, Rotterdam, recognized as the largest seaport globally, accommodates approximately 30,000 seagoing vessels each year These metrics not only highlight the port's operational intensity but also indicate its capacity constraints in servicing larger ships.
The second is number of ships can carry loading/unloading at the same time can show us the ability of a port in providing reception capacity.
The volume of goods handled annually is a key indicator of a port's capacity and efficiency Rotterdam Port has consistently managed over 440 million metric tons of cargo each year since 2013, showcasing its significance in global trade and logistics.
The cargo handling capacity of a port refers to the volume of goods it can manage within a single day, typically measured in metric tons per day.
It is used for assessing the high or low or average capacity of a port.
Macro-indicators of seaport's performance
Annual number of vessels, GRT,
Volume of goods handled per year
Number of vessels can be at same time
(MT/day) Costs and Freight
Cargo handling costs, port fees, and towing fees are key indicators of labor productivity and port management effectiveness, highlighting the strengths and weaknesses of various port activities Additionally, the state of navigators and cargo berths reflects the infrastructure quality and natural environment of the port, serving as a significant factor that enhances its competitive advantages over others.
The storage warehouse's capacity is a crucial indicator of a port's scale and modernity, measured by area in square meters, cargo circulation, and the capacities of Container Yards (CY) and Container Freight Stations (CFS).
1.6.2 Micro-performance indicators of seaport operations
Micro-performance indicators play a crucial role in enhancing operational efficiency, employing distinct analytical approaches These indicators primarily rely on empirical research and can be categorized into three key areas: throughput measurements, productive efficiency, and financial reporting.
Figure 1.3: Micro-performance indicators of seaport operations
Micro-indicators of seaport's performance
Productive efficiency in port operations focuses on comparing actual performance to optimal output, rather than historical performance, while the throughput measurement approach aligns port operations with the production function Financial reporting evaluates port performance through accounting ratios, such as pay-back, return on equity (ROE), and gearing ratio, utilizing indicators like operating expenses and surplus per cargo unit or ship type.
Real situation of Chan May Port’s performance
Introduction to Chan May Port
Chan May Port, strategically located in Central Vietnam, serves as a vital seaport that enhances the region's industrial, commercial, and service development Nestled within Chan May Bay, a deep-water bay covering 2,013 hectares with depths ranging from 6 to 14 meters, the port benefits from natural protection provided by the Chan May East and West headlands Classified as a type II seaport by the Vietnamese Government, it facilitates tourism, as well as the export and import of goods, serving not only the Central economic region but also neighboring countries like Laos, Cambodia, and Thailand Additionally, Chan May Port acts as a crucial gateway to the East Sea, linking the East-West trade corridor from Myanmar to East Asia and beyond Its proximity to Da Nang International Airport (30km south) and Phu Bai Airport (40km north), along with easy access to National Highway AH1 and Highway 9 leading to the Lao Bao border gate, further enhances its logistical advantages The port is also surrounded by renowned tourist attractions, making it a key player in both trade and tourism.
March 24, 1996 Prime Minister Vo Van Kiet visited and inspected Chan May Port and worked with leaders of Thua Thien Hue.
March 28th, 2006 the Government Office released the Announcement No: 31/
During a meeting with the leadership of Thua Thien Hue Province, Prime Minister Vo Van Kiet emphasized the importance of conducting a pre-feasibility study for the development of a deep seaport and an industrial, commercial, and service zone at Chan May Port.
December 27th, 1996 Prime Minister signed the Decision No:966/TTG onApproval of Generating Plan for Chan May New City, Thua Thien Hue Province.
On September 4, 1997, the Ministry of Construction issued official document No 1166/BXD-KTQH, which outlined the planning agreement for land use in Chan May New City Subsequently, on September 17, 1997, the Vietnamese Government released document No 4633/KTN, addressing the pre-feasibility study for Chan May Port, based on the initial report regarding the port's construction through 2010.
November 09th, 2000 Provincial People Committee of Thua Thien Hue had the Decision No.2999/QD-UB on Approval of Berth 01 constructing plan at Chan May Port, Thua Thien Hue Province.
March 25th, 2001, initiating to construct Berth 01 - Chan May Port.
April 23rd, 2003 Provincial People Committee of Thua Thien Hue had Decision No.1048 QD/UB on transferring Chan May Port to Chan May management Board for managing and running.
May 19th, 2003, Opening Ceremony of Berth 01 - Chan May Port.
January 5th, 2006 Prime Minister gave out the Decision No.04/2006/QD-TTG on founding and implementing the Operation regulations of Chan May-Lang Co, Thua Thien Hue province.
December 7th, 2006 the People Committee of Thua Thien Hue Province had the decision No 2789/QD-UBND on changing Chan May Project Management Board into Chan May Port.
May 25th, 2007, Signatory Ceremony of Over-handing Chan May Port to Vinashin between management.
September 28 th , 2007 Group Vietnam Shipbuilding Industry Decision No. 3128/QD-CNT-DOP-LD on the establishment of Chan May Port limited Liability Company.
November 14 th , 2007 Prime Minister's Decision No 1541/QD-TTg on the transfer of assets Port Economic Zone Chan Chan May-Lang Co, Thua Thien Hue for Vietnam Shipbuilding Industry Corporation.
From 2007 until now, Chan May Port is operated and controlled by Chan MayPort limited Liability Company.
The company organizational structure of Chan May Port Ltd Co is composed of chairman of the board, directors and deputy directors, the specialized departments and workshops.
Figure 2.1: Organization structure of Chan May Port Ltd Co.
Operation Deputy Director Technology Deputy
Source: Administrative Department at Chan May Port
The Board of Directors appoints the company's Chairman, who is responsible for making decisions regarding appointments, dismissals, discipline, salaries, bonuses, and benefits as requested by the parent company Acting on behalf of the stockholders, the Chairman represents the company and is accountable to both the law and the parent company for fulfilling assigned rights and responsibilities.
The Director serves as the legal representative of the company, appointed by the Board of Directors, and is responsible for hiring, dismissing, and determining the compensation and benefits of employees as per the parent company's recommendations The Director executes the company's activities in compliance with legal standards and established responsibilities, while being accountable to the law, the Board of Directors, the parent company, and the Chairman for fulfilling their assigned duties and rights.
The Deputy Director, appointed by the Board of Directors at the request of the Chairman, is responsible for managing the company under the Director's guidance and is accountable to both the Chairman and the Director for assigned tasks The Chamber Services-Marketing Department advises on tariff construction for business activities, directly engages with customers through contract management, and resolves disputes Additionally, this department prepares cost tables for customer services, conducts data analysis, and evaluates annual business performance while actively promoting marketing initiatives to attract new clients Meanwhile, the Discovery Department supports the Director by ensuring compliance with planning and statistical operations, guiding the production team to achieve the company's annual targets.
The Technology Department plays a crucial role in advising the Director on investment construction performance management, organizing maintenance, repairs, and upgrades of existing constructions and equipment Additionally, it focuses on researching and applying new technologies for production and investment projects, as well as overseeing the procurement of new vehicles and equipment.
The Accounting and Finance Department plays a crucial role in advising the Director on effective financial management, ensuring the optimal use, preservation, and development of capital Under the Director's guidance, the Department is responsible for overseeing and managing workshops, teams, and other departments while adhering to state regulations in financial and accounting practices Additionally, the Department provides counsel on structuring accounting processes to align with the manufacturing enterprise's needs, facilitating management innovation and ongoing improvements in accounting operations.
The Administrative Department is responsible for advising and assisting the Commission and the Director in various areas, including organization, management, recruitment, and training of personnel It ensures compliance with state laws and regulations regarding internal political protection and policy implementation for officers and employees Additionally, the Department provides guidance on labor management, income distribution, and salary standards for company employees, in alignment with government decrees and circulars Furthermore, it is authorized by the Director to oversee teams involved in organization, personnel, and human resource management.
The Service-Providing Factory oversees the inventory management and supervision of goods in the warehouse, ensuring accurate tallying and efficient operations It also compiles statistics related to mining activities and port production Additionally, the Factory facilitates gasoline business operations and offers various supply services for ships.
Cargo handling Workshop has the main function to organize the loading and unloading good activities.
Departments and Workshops focus on specific activities related to their tasks, while also establishing and implementing internal management rules, organizational structures, and human resources policies Their functions and responsibilities are aligned with the company's production needs and business development objectives.
2.1.3 Facilities of Chan May Port
Chan May port is quite fully equipped facilities, however, it has no breakwater, which affects the safety issues and cause some considerable damage for the port business operations.
The four navigation channels with the width of 150 meters and the depth of - 12.5 meters (minus twelve point five meters) to help vessels confidently to circulate in the port area.
The turning basin, with a radius of approximately 200 meters and a depth of -10.7 meters, features restricted areas that affect vessel access To the north, there is a limited depth zone of -10.5 meters near the rock end, while the south edge of the anchorage pool has a depth of -8.1 meters Due to these depth restrictions, ships are generally not permitted to enter these areas unless absolutely necessary, and the decision to enter is made by the captain based on the vessel's tonnage.
The port features two distinct berths: Berth No 1, measuring 300 meters in length and 24 meters in width, accommodates both cargo and passenger ships, while the additional berth, spanning 120 meters in length and 24 meters in width, is designated exclusively for vessels under 3000 DWT and tugboats.
Chan May port features a 2,000 square meter warehouse, but lacks specialized facilities for cryopreservation products, food storage, or liquid cargo, aside from fuel While this limitation may be seen as a drawback, the port compensates with extensive open storage areas, including 70,000 square meters for general cargo and 10,000 square meters designated for container stacking.
The port has built a complete system of signal lights, buoys and lighthouses. The ship passing in the port water area has never had an accident involving outsight infrastructure.
Superstructure of Chan May port including the equipment, the office building and inner transportation system of the port.
Table 2.1: The equipment at Chan May port
No Name of equipment Quantity Capacity
10 Multifunctional Loader Komatsu 01 3~5 cubic meters
Source: website http://www.chanmayport.com.vn/ accessing date on 8 April, 2015
Chan May port boasts a modern array of cargo handling and lifting equipment, particularly for bulk cargo, that rivals other leading ports in Vietnam These advanced devices facilitate efficient cargo operations, ensuring timely handling for incoming ships Additionally, the port is equipped with a generator to provide power during emergencies or outages, and an electronic scale is employed to accurately manage vehicle tonnage, enhancing berth safety.
Main activities’ performance
In the past year, the company has offered a range of essential services, including cargo handling, warehousing, tourist vessel servicing, towing, and various transportation services, along with oil and gas trading.
Cargo handling is the key activity at Chan May port, consistently generating the highest revenue among all services The port is well-equipped with specialized loading tools for bulk cargo, ensuring it meets the needs of every ship that arrives, rivaling the capabilities of larger ports in the country.
In 2012, cargo handling revenue was 22.796 billion VND, which slightly decreased to 22.133 billion VND in 2013, before rising again to 23.884 billion VND in 2014 This fluctuation reflects the varying demand from port customers Despite these changes, cargo handling consistently contributed significantly to the port's total revenue, accounting for 29% in 2012 and 29.13% in 2013 Notably, in 2014, this activity achieved a new milestone, representing 30.35% of total sales revenue.
In all his lifetime, Chan May port witnessed the rapid and strong development of cargo handling activity in the port.
Figure 2.2: Volume of Loading and unloading cargo in Chan May Port 2005- 2014
Cargo handled at Chan May port 2005-2014
Source: Accounting and Finance Department of Chan May port
Over the past decade, Chan May port has experienced a significant increase in annual cargo handling, with a remarkable 4.5-fold rise in output from 2005 to 2014 In the last four years alone, the port's loading capacity reached 1.5 million tons per year, exceeding the wharf's design capacity by over 150%.
Between 2011 and 2014, the cargo volume at Chan May port experienced significant fluctuations, with a decline from 1.697 million MT in 2011 to 1.48 million MT in 2013 This decrease can be attributed to the economic downturn, which led to reduced demand from Japanese and Chinese companies for titanium, clinker, and wood chips Additionally, ineffective marketing efforts resulted in the port failing to attract new customers, further contributing to the sharp drop in throughput during this period.
Figure 2.3: The throughput handled at Chan May port 2011-2014
Throughput handled at Chan May port 2011-2014
Source: Accounting and Finance Department of Chan May port
The data illustrates a significant increase in export goods handled at Chan May port over the years, with export volume rising sharply and constituting a large portion of total throughput In contrast, the import and domestic volumes remain unstable and account for only a small percentage, with domestic cargo ranging from 4% to 13%, indicating underdevelopment in domestic marine transport compared to other transport modes The primary domestic goods, salt and coal, contribute minimally to total throughput Similarly, the import volume fluctuates, suggesting that Chan May port is not a reliable choice for foreign firms However, the rise in export is attributed to the growing demand for Vietnamese goods, particularly wood chips, clinker, and minerals, which are gaining traction in the Japanese and Chinese markets, signaling positive economic development for both Vietnam and Chan May port.
In a comparison, we have data of loaded and unloaded cargo through the port of Da Nang and port of Nghe An.
Table 2.3: Cargo handled of Da Nang port in 2011-2014
Source: www.danangport.com.vn accessing on 1 st May 2015
Table 2.4: Cargo handled of Nghe Tinh port in 2011-2014
Source: www.nghetinhport.com.vn accessing on 1 st May 2015
Between 2011 and 2014, cargo handling at Da Nang and Nghe Tinh ports in Central Vietnam experienced consistent growth, while Chan May port saw significant fluctuations By 2014, Da Nang port handled 6,022,045 MT of cargo, which was over 3.5 times greater than that of Chan May port A deeper analysis of marine transport indicates a shift of customers from Chan May to Da Nang port, attributed to challenges at Chan May during lobster seasons, where fishermen's nets hinder vessel landings, alongside difficulties in attracting new clientele.
Nghe Tinh port significantly outperformed Chan May port in cargo handling operations, with its volume consistently reaching nearly 1.5 times that of Chan May This substantial difference highlights the inferiority and lagging development of Chan May port compared to its neighboring ports in Central Vietnam.
Recently, Chan May port has seen an increase in large tonnage cruise ships from renowned shipping lines, including Celebrity Millennium, Queen Victoria, Costa Atlantica, Queen Elizabeth, and Seven Seas Voyage The port features a front water depth of 12.5 meters, with potential for further dredging to accommodate even larger vessels.
16 meters, the Chan May port allow the 6-star cruise ship with volume of 100,000 GRT or greater to dock on.
The figure 2.3 shows the number of cruise ships docking at the port and numbers of passengers come to Chan May port through the year.
Figure 2.4: Number of cruise ships and passenger through Chan May port 2005-2014
Number of cruise ships and passengers to Chan May port 2005-2014
Number of Passengers Number of Cruise Ship
Source: Administrative Department of Chan May port
Figure 2.4 illustrates a significant upward trend in passenger numbers and cruise ship arrivals at Chan May port In 2005, only six ships visited the port, but by 2008, this number rose to 16 The peak occurred in 2011, with 43 cruise ships bringing nearly 44,000 visitors, largely due to the government's decision to position Chan May as a key cruise destination in Central Vietnam However, in 2012 and 2013, visitor numbers declined by over 13,000 due to a lack of marketing strategies to attract cruise lines Fortunately, in 2014, Chan May port experienced a resurgence, welcoming 30 cruise ships and 34,000 visitors, demonstrating effective collaboration with Royal Caribbean This partnership includes plans to renovate Berth No 1 to accommodate super-luxury passenger ships with a capacity of up to 240,000 GRT.
The fluctuation in the number of cruise ships and passengers arriving at Chan May port is evident through key ratios Notably, in 2011, the passenger count at the port surged by 74% compared to 2010.
In 2012, Chan May port experienced an 11.4% decline in passenger numbers compared to 2011, with a further decrease of 32% in 2013, marking the lowest figures in three years This decline highlighted the port's inexperience in marketing and attracting cruise ship customers However, in 2014, the port rebounded with a remarkable 132% increase in passenger numbers compared to 2013, aided by a partnership with Royal Caribbean, which signaled a significant step in improving marketing efforts That year, Thua Thien-Hue welcomed 2.9 million visitors, including 1 million foreign tourists, with the tourism sector contributing over 56% to the provincial GDP, the highest rate among all provinces in Vietnam Chan May port played a crucial role in facilitating international passenger transport, significantly boosting revenue for the Thua Thien-Hue tourism industry.
In addition, the revenue from the services for tourist vessels includes both the revenue from berth service and the revenue from passengers through the port In
Between 2012 and 2014, revenue from berth services demonstrated significant growth, increasing from 9.307 billion in 2012, which represented 11.8% of total sales revenue, to 9.09 billion in 2013, accounting for 12% By 2014, the proportion of revenue from this service rose to 12.38% These figures highlight the consistent upward trend in berth service revenue over the three-year period.
In the other hand, based on the figure describing the number of passengers toChan May port and Da Nang port, we have a comparison with some inverse results.
Figure 2.5: Number of passengers through Chan May port and Da Nang port 2010-2014
Chan May port Da Nang port
Source: www.danangport.com.vn accessing on 5 th May 2015 and Administrative Department of Chan May port
Figure 2.5 illustrates the fluctuations in tourist numbers between Chan May and Da Nang ports, revealing a notable shift in preference from Chan May to Da Nang beginning in 2012 Initially, in 2010 and 2011, both ports experienced a similar increase in visitors However, as the proximity of these neighboring ports—approximately 50 km apart—became more apparent, it became clear that Chan May's limited infrastructure, including only one berth serving both cargo and cruise ships, hindered its appeal In contrast, Da Nang port boasts a robust infrastructure with two wharf systems and a total of 12 berths, significantly enhancing its capacity Consequently, the urgent construction of Berth No 2 at Chan May port is critical to improving its competitiveness in the cruise shipping market.
In 2014, Chan May port experienced a significant increase in cruise ship arrivals, rising by 32%, while Da Nang port saw only a modest growth of 2% compared to the previous year This remarkable growth at Chan May port highlights its rapid development in the cruise industry, outpacing the progress made at Da Nang port.
Assessment of Chan May Port performance
Cargo handling is the core activity of the port, necessitating careful investment in appropriate loading and unloading equipment for different types of goods It is essential for the port to clearly understand the advantages and disadvantages of these operations to implement necessary improvements.
Chan May Port prioritizes safety in its loading and unloading operations, ensuring a track record free from accidents or customer losses since its inception Additionally, the port boasts a high-productivity equipment system for handling bulk cargoes like clinker, wood chips, coal, titanium, and salt, comparable to major national ports such as Hai Phong and Da Nang.
For example, the wood chip handling capacity per trough of Hai Phong port is 5,400
Chan May port has a daily handling capacity of 5,200 MT, surpassing Da Nang port's 5,000 MT and Hai Phong port's 3,000 MT For titanium and coal, Chan May port can manage 3,000 MT per day, compared to Da Nang's 2,800 MT and Hai Phong's 2,400 MT When it comes to clinker, Chan May port leads with a capacity of 4,000 MT per day, while Da Nang port handles 3,400 MT and Hai Phong port 3,000 MT.
The port's efficient loading and unloading equipment significantly reduces the time required for cargo handling of bulk shipments, allowing ship owners and cargo owners to save both time and money.
Chan May Port offers some of the most competitive charges and fees in the region, making it an attractive option for ship owners Compared to Da Nang Port, Chan May Port not only adheres to government-regulated fees but also provides lower prices for various services, enhancing its appeal for maritime transactions.
Table 2.6: Some charges and fees of Chan May port and Da Nang port
No Charges and Fees Chan May port Da Nang port
1 The minimum charge of ships 50 USD 60 USD
Fee for ships smaller than or equal to 120 meters 300 USD 500 USD
Fee for ship greater than 120 meters to 180 meters 600 USD 800 USD
3 Fees for baled and bulk cargo 1.5-2.1 USD/MT 1.6-2.2 USD/MT
Fee for liquid cargo 3.2 USD/MT 3.5 USD/MT
4 Charges of mooring and unmooring 18-60 USD 20-66 USD
Sources: www.danangport.com.vn accessing on 12 May 2015 and Accouting and Finance Department of Chan May port
Chan May Port offers significant advantages over Da Nang Port in attracting small and medium vessels, primarily due to its low costs and specialization in bulk cargo These factors position Chan May Port favorably to attract both domestic and international customers for bulk commodities.
While cargo handling at Chan May port is a significant investment and one of the oldest activities in the region, it is accompanied by notable drawbacks One major issue is the absence of a breakwater, which complicates vessel landings during adverse weather conditions.
Chan May port experiences significant adverse effects from storms, facing 1 to 3 major storms annually that cause considerable damage to both the port and cargo owners Additionally, the lobster season in Chan May Bay runs from October to March of the following year, during which approximately 100 households deploy nets in the port area for lobster fishing, restricting vessel docking during this period.
The third, the cargo handling activity depends completely on the weather, so that in rainy day, the activity has to compulsorily stop to protect goods.
The fourth, container-handling equipment operates inefficient, it is estimated that the container handle capacity is 10 cont per hour compared to Da Nang port of
Chan May port operates at a capacity of 12 containers per hour, while Hai Phong port handles 20 containers per hour The significant distance between the container yard and the berth introduces operational uncertainties Additionally, it is important to highlight that Chan May port does not generate any revenue from container handling, indicating an inefficient use of the port's resources.
The port's ability to attract new customers is severely constrained due to a lack of investment in marketing initiatives Additionally, the limited use of e-commerce by staff and the absence of any e-commerce strategies further hinder customer acquisition efforts, leaving the port reliant solely on its existing clientele.
Chan May port currently lacks a detailed breakdown of handling charges and fees for various cargo types, particularly for high-volume commodities This absence of clarity can result in misunderstandings among customers regarding costs, potentially leading to disputes between involved parties.
Chan May port stands out as a key hub for tourist vessels due to its strategic location near renowned attractions like the Hue Ancient Capital, Hoi An Ancient Town, My Son Sanctuary, and Phong Nha Cave This prime positioning allows easy access for travelers to explore not only these iconic sites but also to reach neighboring countries such as Laos and Thailand by road Additionally, major airports like Da Nang International Airport and Phu Bai Airport are just an hour away by car, enhancing the port's appeal for tourists.
Chan May port is recognized as a key player in international trade routes connecting various continents with the Indochinese peninsula The Asia Cruise Association has ranked Chan May port as one of the top 47 cruise ship destinations in Asia, enhancing its reputation on the global stage and providing a unique advantage over other national seaports.
Chan May port has established a long-term, reputable partnership with renowned tourist carriers, fostering loyalty among its customers The port prioritizes efficient and secure Exit and Entry procedures for international passengers, with a dedicated security team ensuring a safe and orderly environment This commitment to safety has resulted in no incidents occurring within the port area, further enhancing the impressive customer service reputation of Chan May port among major tourist carriers.
The service for tourist vessels at Chan May Port benefits from low charges and fees set by the management board, including reduced mooring and unmooring fees, parking fees, and pier rental costs.
In other hand, Chan May port also provides a number of services those other ports hardly support such as cleaning and garbage collecting for long-stay vessels.