Logo of Phnom Penh Post newspaper Phnom Penh Post - Cargo giants call on Sihanoukville port

Cargo giants call on Sihanoukville port

A China Ocean Shipping Company (COSCO) container ship sits docked at the Port of Oakland, California, in October last year. Bloomberg
A China Ocean Shipping Company (COSCO) container ship sits docked at the Port of Oakland, California, in October last year. Bloomberg

Cargo giants call on Sihanoukville port

As Cambodia's sole deep-sea port in Sihanoukville looks to increase its presence on global shipping routes, the decision by two major Chinese shipping companies six months ago to call at the port has seen mixed results, with one firm already dropping out due to low container traffic.

Last September, China Shipping Container Lines (CSCL) and the state-run China Ocean Shipping Group Company (COSCO) signed agreements with the Sihanoukville Autonomous Port (SAP) to create a direct route to China for Cambodian exports.

The two shipping firms, with a combined annual capacity of more than 1.2 million standard 20-foot containers, also known as TEUs, provided local exporters with the option of directly shipping to China, bypassing the usual stopover at Vietnam’s Cai Mep port.

SAP’s director general Lou Kim Chhun said that while COSCO was currently operating one port call every two weeks, CSCL had decided to scale back its operations and was instead booking slots at the port only when there was a critical mass of containers.

Yet despite CSCL’s withdrawal, Kim Chhun said the incremental increase in Cambodia’s volume of exports had garnered the attention of international shipping firms, which were considering calling at the coastal port to meet this increasing demand.

“The market for shipping services to come to Cambodia is still available,” he said. “There is still a demand for such services at the port.”

He noted that Korea-based HMM Logistics announced last week that it had included SAP on its Shanghai-Thailand Express, which is expected to reach the port for the first time on Sunday, creating a direct eight-day route to South Korea.

Kim Chhun said the increase in shipping companies using SAP had resulted in benefits for exporters – where costs had seen a “significant” reduction compared to previous years.

“It is normal when there are more international direct shipping routes that the cost of logistics will increase savings and reduce time, as well as increase the output of containers, making our export sector more competitive,” he said.

With container ships now capable of transporting an average of 700 TEUs, he said it significantly increased the amount of containers that can depart from Sihanoukville port.

Chim Peter, a business development executive at DB Schenker (Cambodia) Ltd, the local arm of the German transportation and logistics services firm, said that supply space for shipping carriers was no longer a problem and the cost of shipping on carriers had dropped significantly recently due to more competitors serving the Cambodian market.

“We always had problem with space last year, but now there are more containers with space and it’s cheaper,” he said.

Peter added that costs were now comparable to inland transportation costs and clients had seen their logistics outlays drop by 20 to 30 per cent.

“Short containers now cost around $200 to South Korea, compared to $500 to $800 that it used to cost in the past,” he added.

With the increase in shipping routes to China, exports will see an uptick in their price competitiveness, including to other ASEAN member nations, said Nuon Ratana, sales and marketing manager at RDL Logistics.

“This could contribute to cost competitiveness,” he said. “These companies should be able to provide better rates than the current price.”

MOST VIEWED

  • With herd immunity likely in 2022, is Cambodia ready to reopen for tourism?

    The government aims to inoculate 80 per cent of the target population by June next year, giving it a head start among regional peers to reboot the sector but first, it has to do a few things to up its game A sign on a glass

  • US wants 'full access' to Ream Naval Base

    On June 11, the US embassy's Defense Attaché Colonel Marcus M Ferrara visited Ream Nava Base in coordination with Cambodian officials following the recent approval of Prime minister Hun Sen to allay the concerns on Chinese military presence at the base as raised by US Deputy

  • Jab drive heading to 5 provinces

    The government is set to vaccinate more than 1.2 million people in five provinces after finishing with Phnom Penh and neighbouring Kandal in an ongoing campaign administered by the ministries of Health and National Defence. The five provinces are Preah Sihanouk, Kampong Speu, Takeo, Kampong Cham

  • New immigration bill targets illegal foreigners in Kingdom

    General Department of Immigration (GDI) officials are discussing revisions to the new draft law on immigration to prevent foreigners from entering Cambodia illegally and to supervise those living in the Kingdom more effectively. The revisions draw wide support among civil society organisations. GDI director-general Kirth

  • School reopening can’t wait

    With the Covid-19 pandemic now well into its second year, safely reopening schools has become an urgent priority. School attendance is critical for children’s education and lifetime prospects. The long-term costs of closures – both for individual children and society – are simply too large to

  • Kingdom set to be a gold producer

    Cambodia will soon join the roster of gold producing countries after the government announced the commencement of commercial gold mining operations in the Okvau area in southwestern Mondulkiri province's Keo Seima district from June 21. Prime Minister Hun Sen on June 10 announced that after 14 years of