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Waterways may reduce export costs

Waterways may reduce export costs

Heavyweight boxing: Workers prepare to unload containers at a Chinese-built container port on the Mekong River in Kandal province’s Kien Svay district in January 2013. Photograph: Hong Menea/Phnom Penh Post

Cambodia's waterways are significantly underused for the transport of commodities such as rice, and enhanced infrastructure and a review of government fees is needed at the Kingdom’s ports to make exports more competitive, industry experts say.

According to figures from the Alliance of Rice Producers and Exporters of Cambodia (ARPEC), Vietnam’s rice millers, located largely on estuaries, primarily use waterways for transport at an average cost of $3 a tonne. By comparison, local rice millers rely on trucking to transport rice, at an average cost of $15 to $17 a tonne.

ARPEC deputy secretary-general David Van said the viability of setting up regional hubs to ship to Cambodia’s ports along waterways, rather than by road, should be explored, as it could significantly reduce transport costs.

“Someone should conduct a proper survey of the navigability of waterways here and put up investment to maximise the commercialisation of them,” Van said.

Although Sihanoukville still lacked the warehousing facilities to compete with neighbouring sea ports, government-imposed charges on shipping lines were also a hindrance to the competitiveness of Cambodian exports, Van said.

“The state should lift such a monopoly from that state agency and eventually look at perhaps a more efficient way to levy all incoming vessels to make shipping services a lot more competitive,” he told the Cambodia outlook conference in Phnom Penh last month.
Van said a logistics company had calculated that waterway transport from Kampong Cham to Ho Chi Min City and on to Shekou, in southern China, would cost $32.50 a tonne, compared with $53 a tonne to Shekou via Sihanoukville.

Tom Willems, the managing director of Akra Group, which has recently established a rice production and exporting co-operative, said that although in the short term it made sense to make greater use of Cambodia’s waterways, in the long term it would be in the best interests of Cambodian producers and exporters to also strengthen the ports.

“We need to get ships calling at the sea ports. You have to have enough containers coming out of the sea ports to have the shipping lines make calls,” Willems said.

Grant Joyce, the general manager of Phnom Penh-based Seacam Logistics, said more should be done to reduce the “multitude” of charges at Cambodia’s ports to make them more competitive.

“Thailand is more advanced in its thinking: if customs here made it the same price [as Thailand], they would lose on one shipment but would gain on the thousands of shipments that would follow,” Joyce said.

Sihanoukville Autonomous Port chief executive Lou Kim Chhun said navigation charges applied to shipping had been minimised with the introduction of a new policy effective from March 1.

In the near future, rail cargo to the port would further enhance export competitiveness, Chhun said.

“Very soon the railroad connecting Phnom Penh to Sihanoukville will be operating, making Cambodian rice exports even more competitive.”


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