Country offers diverse opportunities for project shipments

Infrastructure projects provide some of the most promising areas for U.S. exports to Vietnam, according to the Commerce Department’s U.S. Commercial Service.

The major industry sectors for project logistics activity in Vietnam are road and port construction; power generation, including hydroelectric, thermal, wind and coal-fired plants; mining, refining and petrochemical expansion; and steel plants, said Lim Siew Hua, regional general manager for BDP Project Logistics for Vietnam and Singapore.

Vietnam’s oil and gas sector is the fourth-largest in Southeast Asia and accounted for $8.8 billion in exports in 2007, about 12 percent of the country’s gross domestic product. Between 1988 and 2008, Vietnam signed 58 gas exploration and production contracts with foreign firms.

Challenges for project cargo shippers and carriers include a limited supply of heavy-lift trailers and limited multilingual human resources. Increasingly, barges are being substituted for heavy-lift project vessels, Lim said.

The nascent project cargo industry in Vietnam could be hit hard by the recession. According to a government trade report, the nation has cut its import forecasts for 2009 by more than 12 percent, largely because of falling commodity prices.

"Given the current situation and the early months of 2009, prices of many input raw materials, such as steel, steel billets, fertilizers and oil products, are seen falling from 30 percent to 50 percent," the report said.

Those pressures could push Vietnam’s 2009 trade deficit to about $18 billion and could force the government to prop up exports by devaluing its currency, the Vietnamese dong.

Congestion is acute at the nation’s largest port complex at Ho Chi Minh City, according to an Asia supply-chain report. The problem is especially troubling for heavy-lift shippers. Vehicles weighing more than 30 tons are banned from most bridges in the Ho Chin Minh City metropolitan area.

In a 2007 World Bank evaluation of the logistics performance of Asian nations, Vietnam scored well below China, India and Singapore in customs clearance, international shipmetns, tracking and tracing, timelines and overall logistics competence.