CMA CGM pulls out of Vietnam's Cai Mep terminal near Ho Chi Minh City

MARSEILLES' shipping giant CMA CGM has stopped calling at Ho Chi Minh City's big container terminal at Cai Mep, which first opened in 2009 offering access to ships above 3,000 TEU for the first time in Vietnam's history, reports Alphaliner.

Carriers first rushed to introduce direct connections from the port 70 miles from Saigon, the former capital of South Vietnam, to the US and Europe and, within the first two years of its opening, a total of 15 weekly direct, non-feeder services added Cai Mep to their rotations.

But interest has waned with weaker than expected cargo volumes, resulting in a reduction in the number of direct services calling at Cai Mep to just eight loops. These are seven intercontinental services and a long haul intra-Asia loops.

Much of the deterioration is blamed on the lack of shoreside infrastructure such as good roads to the interior as well as excessive harbour fees.

CMA CGM has now removed the port from its Asia-Europe FAL 3 loop in favour of Shenzhen-Yantian. The French shipping line will also stretch the rotation of the FAL 3 by one week, from 11 to 12 weeks, with the addition of a further vessel as it adopts super slow steaming on certain legs of the service. It will henceforth be run with 12 ships of 11,000-11,400 TEU, all provided by CMA CGM.

The FAL 3 service deployed the largest ships to call hitherto at Cai Mep and it was the only CMA CGM service offering a direct Vietnam-Europe link, which is to be replaced temporarily by feeder connections at Singapore. The FAL 3 is also used by MSC and UASC through two separate slot exchange arrangements. Several other carriers have already pulled out of direct services to and from the southern Vietnam port, including APL, CSAV and Zim.

The decline in the number of vessel calls at Cai Mep has prompted CMA CGM and Gemadept to slow down the pace of construction at their joint venture terminal 'Gemalink,' which was originally scheduled to start operations in 2013. The launch of the SSA-operated SSIT (Saigon Port-SSA International Terminal), which was due to begin operations in the second quarter of 2012, has also been delayed. An eighth terminal, built with funds provided by the Japan Overseas Development Assistance (ODA), also due to start operations in 2012 according to the original schedule, has also been delayed to an unspecified date.

The prospect for these terminals will remain bleak in the near term, given the significant overcapacity at Cai Mep, with current utilisation at less than 50 per cent. Two out of the five existing terminals at the port are without any regular customers - the PSA operated SP-PSA terminal lost its last regular customer in November 2011 while SITV, which is operated by Hong Kong's Hutchison Port Holdings, lost its sole customer in July 2011. These two terminals have a combined capacity of 1.4 million TEU annually.

The Saigon New Port-operated TCCT and a sister company, TICT (the joint venture of Saigon New Port, Hanjin Shipping, MOL and Wan Hai), are the only terminals that have retained most of their customers although the number of linehaul calls at the two terminals has also dropped from eleven calls a week in June 2011 to seven calls currently.