RECOMMENDATIONS TO RELIEVE CONTAINER CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT STOCK COMPANY – CHUA VE TERMINAL

MINISTRY OF TRANSPORTATION

MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: DO KHANH LY

DISSERTATION
GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO RELIEVE CONTAINER CARGO
CONGESTION AT THE PORT OF HAI PHONG JOINT STOCK
COMPANY – CHUA VE TERMINAL


HAI PHONG – 2015


MINISTRY OF TRANSPORTATION

MINISTRY OF EDUCATION & TRAINING

VIETNAM MARITIME UNIVERSITY

STUDENT NAME: DO KHANH LY
CLASS:

GMA 02

DISSERTATION

GLOBAL STUDIES AND MARITIME AFFAIRS

RECOMMENDATIONS TO RELIEVE CONTAINER CARGO
CONGESTION AT THE PORT OF HAI PHONG JOINT STOCK
COMPANY – CHUA VE TERMINAL
Supervisor: MSc. Hoang Thi Lich
Division:

Global Studies and Maritime Affairs

Faculty:

Economics

HAI PHONG – 2015


PREFACE
It is believed that container has made the remarkable revolution in maritime
industry. Indeed, thanks to container shipping, an amount of cargo trading all
around the world has been rising up. In the present age, along with the development
of science and technology, container which is carried on mega ships is no longer
impossibility. And container shipping service has brought huge profits for the
economy.
Vietnam is a country which has got a favorable natural condition with more than
3200 km of coastline. Therefore, maritime transport brings many opportunities and
benefits to the country, especially in container shipping. Although having a natural
advantage along with a growing development of seaports, instead of being able to
gain significant profits from container transportation, Vietnam has to spend an
amount of money in dealing with container cargo congestion at port. The storage of

congested container at port causes the loose of not only an expense but also profits
when a container cannot be used for lease.
Obviously, it can be seen that container cargo congestion is an alarming problem
nowadays. Therefore, understanding and finding feasible solutions for this problem
is a compelling task. This report is written with the aims to have a more thorough
glance at container cargo congestion problem.
I hereby declare that this report is my own work which has not been published
before.
If violated, I am solely responsible for and bear the punishments of the Institution
and University.
Student name and Signature

Do Khanh Ly

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ACKNOWLEGEMENT
Firstly, I owe my deepest gratitude to my advisor MSc. Hoang Thi Lich for the
continuous support of my dissertation, for her patience, encouragement,
guidance, and immense knowledge. She helped me to develop my research as
well as many difficulties during the time I carried out my dissertation.
It is an honor for me to extend my special thanks to staffs at Container Team in
particular and all staffs at Chua Ve terminal in general. They have instructed me
enthusiastically as well as provided information related to my report. Without

their assistance, I would not have fulfilled my dissertation.

Do Khanh Ly – GMA 02

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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Table of Contents
PREFACE.................................................................................................................i
ACKNOWLEGEMENT.........................................................................................ii
LIST OF ABBREVIATIONS..................................................................................v
LIST OF FIRGUES................................................................................................vi
LIST OF TABLES.................................................................................................vii
INTRODUCTION...................................................................................................1
1.

Necessity of the research..............................................................................1

2.

Research object............................................................................................1

3.

Research scope.............................................................................................2

4.

Research findings.........................................................................................2

CHAPTER 1: LITERATURE REVIEW...............................................................3
1.1. An overview of congestion at port...............................................................3
1.2. Types of congestions at port.........................................................................3
1.3. Causes of cargo congestion at port...............................................................5
CHAPTER 2: CONTAINER CARGO CONGESTION AT THE PORT OF
HAI PHONG JOINT-STOCK COMPANY – CHUA VE TERMINAL...............9
2.1. Introduction of Chua Ve Terminal................................................................9
2.1.1. General information about Chua Ve Terminal..........................................9
2.1.1.1. General information about the Port of Hai Phong Joint-Stock
Company.......................................................................................................9
2.1.1.2. General information about Chua Ve Terminal...................................9
2.1.2. Main services.........................................................................................10
2.1.3. Infrastructure..........................................................................................11
2.1.4. Organization..........................................................................................13
2.1.5. Personnel...............................................................................................15
2.1.6. Business activity results of Chua Ve Terminal in 2013 and 2014...........16
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2.1.7. The total container throughput of Chua Ve Terminal in recent years
17
2.2. Container cargo congestion at Chua Ve terminal..........................................20

2.2.1. Container cargo congestion at gate........................................................20
2.2.1.1. The real situation............................................................................20
2.2.1.2. Causes of cargo congestion at gate.................................................21
2.2.2. Container cargo congestion at quay.......................................................21
2.2.2.1. The real situation............................................................................21
2.2.2.2. Causes of cargo congestion at quay................................................22
2.2.3. Container cargo congestion at yard........................................................22
2.2.3.1. The real situation............................................................................22
2.2.3.2. Causes of container cargo congestion at yard.................................23
2.2.3.3. The negative influence of accumulated containers..........................25
2.3. Evaluation.....................................................................................................28
2.3.1. Strong points..........................................................................................29
2.3.2. Weak points...........................................................................................31
CHAPTER 3: RECOMMENDATIONS TO MINIMIZE CONTAINER
CARGO CONGESTION AT THE PORT OF HAI PHONG JOINT
STOCK COMPANY – CHUA VE TERMINAL.................................................34
3.1. Recommendations for Chua Ve terminal......................................................34
3.1.1. Applying information technology..........................................................34
3.1.2. Port facilities..........................................................................................34
3.1.3. Skills of staffs........................................................................................35
3.1.4. Controlling environmental issue............................................................35
3.1.5. Co-ordination with authorities and enterprises......................................36
3.2. Recommendations for governments and involved authorities......................36
3.2.1. For the government................................................................................36
3.2.2. For the involved ministries and parties..................................................38
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CONCLUSION......................................................................................................40
BIBLIOGRAPHY.................................................................................................41
APPENDIX I
APPENDIX II

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LIST OF ABBREVIATIONS
ISO

International Organization for Standardization

DIN

Deutsches Institut fur Normung 

UNCTAD

United Nations Conference on Trade and Development

CFS

Container Freight Station

L.O.A

Length of Ship Overall

TEU

Twenty-foot Equivalent Units

CY

Container Yard

RFID

Radio Frequency Identification

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LIST OF FIRGUES
Figure 1: General layout of Chua Ve terminal.........................................................10
Figure 2: The diagram of organization at Chua Ve terminal....................................13

Figure 3: Financial indicators of business activity...................................................16
Figure 4: The container throughput at Chua Ve terminal from 2011 to 2014...........17
Figure 5: The comparison between Tan Vu terminal and Chua Ve terminal in
terms of container throughput from 2011 to 2014...................................................18
Figure 6: The geographic location of Chua Ve terminal and Tan Vu terminal.........19
Figure 7: Facilities at Tan Vu terminal.....................................................................20
Figure 8: The number of container stagnated at Chua Ve yard since 2006 to
2014......................................................................................................................... 22
Figure 9: The number of containers stagnated at Chua Ve terminal since 2006 2014......................................................................................................................... 23
Figure 10: Accumulated containers placed outside at Chua Ve yard........................25
Figure 11: Damaged containers at Chua Ve yard.....................................................26
Figure 12: Yard layout of Chua Ve terminal............................................................27
Figure 13: Block AD...............................................................................................27
Figure 14: Block BE................................................................................................27
Figure 15: No. 03/TB-KB form according to the Circular No. 15/2014/TT-BTC
................................................................................................................................. 30
Figure 16: Cargo dispatching announcement of Chua Ve terminal..........................31

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
Company – Chua Ve terminal

LIST OF TABLES
Table 1: Storage area at Chua Ve Terminal..............................................................11
Table 2: Berth at Chua Ve terminal..........................................................................11
Table 3: Equipment at Chua Ve terminal.................................................................12
Table 4: Labor structure at Chua Ve terminal..........................................................16
Table 5: Business activity results of Chua Ve Terminal in 2013 and 2014...............16
Table 6: Labor handling capacity at Chua Ve terminal from 2011 to 2014..............32
Table 7: Comparison between Tan Vu terminal and Chua Ve terminal in terms
of infrastructure.......................................................................................................35

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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INTRODUCTION
1. Necessity of the research
Located near the international maritime lane, maritime transportation plays a crucial
role in foreign trade activities of Vietnam. Recent years, thanks to open door
policies of the government and rapid growth of the national economy, especially
acceding World Trade Organization (WTO) on November 2006, the amount of
cargo trading between Vietnam and other nations in the world has been increasing
significantly, especially container cargo.

In the present age, during the process of economic integration of the country, Hai
Phong Port is considered as an important port in bridging trade between the
Northern cities and other provinces and cities as well as between Vietnam and other
nations in the world. With its strategic location along with strong growth of
seaborne trade, instead of gaining significant benefits from container shipping, the
Port of Hai Phong Joint Stock Company has been faced container congestion which
affected detrimentally to business activity of the company as well as the society.
Regarding to Chua Ve terminal – a branch of the Port of Hai Phong Joint Stock
Company, the terminal is specialized in handling container cargo. Recent years,
Chua Ve terminal has been suffered consequences from container cargo congestion
at gate, quay and yard. This problem causes a loss of revenue including storage
charge and other cost related to cargo storage, a time-consuming stay of ships and
cargo at port meanwhile “time is money” in maritime field and so on. Container
cargo congestion not only influences directly to Chua Ve terminal but also national
economy and society in general.
Therefore, the topic “Recommendations to minimize container congestion at the
Port of Hai Phong Joint Stock Company – Chua Ve terminal” is chosen in order to
have a deep glance at this problem, understanding thoroughly reasons and find
feasible solutions for container cargo congestion at Chua Ve terminal.
2. Research object
Container cargo congestion at Chua Ve terminal – a branch of the Port of Hai Phong
Joint Stock Company
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3. Research scope
-

The Port of Hai Phong Joint Stock Company – Chua Ve terminal

-

Period: 2006 - 2015

4. Research findings
-

Finding workable solutions for Chua Ve terminal so that they can utilize
their capacity by circulating container cargo smoothly.

-

Besides, seeking for appropriate responses towards cargo congestion for
enterprises as well as involved parties.

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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CHAPTER 1: LITERATURE REVIEW
1.1.

An overview of congestion at port

Congestion at port can present numerous ways of appearance. It could be
witnessed either in congestion costs or in queue which are increasingly
accumulated, being featured visually [ CITATION Hil12 \l 1033 ].
A port typically experiences internal bottlenecks in which they are resulted in a
queue; for example: loading and discharging quays, locks, etc. [ CITATION
Bla10 \l 1033 ]
In fact, there is no common norm to define cargo congestion at port so far.
According to Dr. Usman Gidago, congestion in ports is an issue related to
delays, queuing and additional time of voyage and dwell of ships or cargoes at
the port[ CITATION Pat08 \l 1033 ]. From this point of view, it can be seen
that cargo congestion at port is a part of port congestion in which flow of cargo
is interrupted or delayed by some factors.
1.2.

Types of congestions at port

According to Dr. Usman Gidago, there are some main types of port congestion
in African ports [ CITATION Gid15 \l 1033 ]:
-

Ship berth congestion: is primarily caused by many ships at berth or at
anchorage waiting for available berth.

-

Ship work congestion: is mainly caused by delays in procedure for
loading and discharging ship. This can lead to a dwell of ships at port to

complete cargo operation work.

-

Vehicle gate congestion: is primarily caused by congestion or delay of
landward access to the port. If there is any problem occurring on the

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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way to the port, it could result in queuing of truck coming in and out of
the port gate. This will affect the flow of cargo significantly.
-

Vehicle work congestion: is mainly caused by low efficiency when
loading and unloading cargo.

-

Cargo stack congestion: is principally caused by either a stay of cargo at
a storage area beyond allowed hours or days or above a maximum
capacity of a storage space.

-

Ship entry/exit route congestion: happens when there is any stoppage on
the marine side access to the port.

In the chapter 4 of the book “Maritime Logistic: Contemporary Issues”, port
congestion is divided into various categories based on the location and
structure of the port[ CITATION Hil12 \l 1033 ]
-

Maritime access route: in default of capacity restrictions; for example, in
order to access the port, ship have to adapt its speed depending on tide.

-

Locks: congestion may happen if the numbers of ships which want to
use the lock excess the lock capacity.

-

Berths: in a case of available berth is occupied another ship.

-

Loading and unloading: when all berths are employed, there coud be a
shortage of loading and unloading equipment.

-

Storage area: in storage area, bad configuration or unexpected moves
may impose a waiting time on cargo or ships.

-

Custom inspection: the procedure of custom inspection may result in
congestion at the point where cargo arrive or depart. The security checks
may worsen the flow of cargo.

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-

Hinterland loading and unloading: the employment of specific
hinterland mode of transport may cause disruption or delays, influencing
the port operation as well. In case of truck use, gate area is often the
bottleneck at the port.

-

Hinterland connections: if hinterland infrastructure is utilized
excessively where the port is located in crowded city, there is probably
delays in delivering cargo at the port.

In above classification of port congestion, it can be said that there are two main
types of port congestion including cargo congestion and ship congestion. In
terms of cargo congestion, there are three main types of congestion depending

on the location and structure of the port.
-

Cargo congestion at gate: this type of congestion related to vehicle gate
congestion. In case of truck carrying container cargo enter or depart
from the port, if there is any delay or interruption of landward access to
the port, container cargo will also be congested.

-

Cargo congestion at storage area: it could be either a stay of cargo at
storage area beyond allowed time or excess a maximum capacity of
storage area.

-

Cargo congestion at quay: this type of congestion related to loading and
unloading process when there is a shortage of handling equipment.

1.3.

Causes of cargo congestion at port

Obviously, it is important to identify causes of delays so as to find appropriate
solutions to solve. According to Professor Patrick M. Alderton, there are some
causes of port congestion related to freight congestion at port[ CITATION
Pat081 \l 1033 ]
(1) Planning
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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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-

Inadequacy of inland transport, both in capacity and efficiency, in
relation to trucks, wagons, highways and port access routes.

-

Failure to keep traffic forecast updated to reflect changes in the pace of
major economic developments,

-

Failure of port management and planning authorities to make adequate
plans in time for port management.

-

Inflexibility in development plans to allow later changes in mode of
traffic flows.

-

Political and social interference which bear on decision-making
processes.

(2) Management
-

Lack of continuity in senior port management positions.

-

Senior port management chosen without regard for the qualifications
required by the job and the adequate provision for upgrading knowledge.

-

Too little training for other staffs, particularly of the middle management
and operating levels.

-

Lack of direct authority of management to effect remedial actions.

(3) Labor
-

Poor labor relations, leading to insufficient restrictive practices.

-

Problems caused by too much or too little labor, according to
circumstances.

-

Insufficient deployment of labor.

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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-

Failure to adapt working practices to local circumstances, such as the
climate.

-

Lack of training of dockworkers, especially in the use of sophisticated
equipment.

(4) Co-ordination
-

Lack of cooperation between different private and governmental
organizations working in the port area.

-

Inadequate consultation between the port authority and users of the port
in respect of operations and development.

(5) Traffic
-

Irregular traffic due to erratic import and export policies, especially with
regard to bulk purchasing and the granting of import licenses.

-

Cargo stowed at port of loading without regard to efficiency of
discharge.

-

Form of packaging and cargo presentation unsuitable for efficient
handling at port.

-

Consignees without adequate financial resources physical facilities to
take cargo.

(6) Operations
-

Inappropriate policies which leads to transit facilities being used for
long-term storage where space is inadequate, thus reducing berth
throughput.

-

Lack of inland or port warehousing facilities, causing cargo to remain
too long in the port transit facilities

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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-

Lack of reserve capacity to deal with recurring surges of demand placed
on ports.

-

Pilferage and smuggling resulting in tight controls which impede a free
and efficient movement

(7) Maintenance
Inadequate maintenance policies which result in a high proportion of
equipment being out of service due to:
-

Absence of preventative and running maintenance

-

Lack of qualified maintenance personnel

-

Lack of adequate stock of spare parts

-

Insufficient standardization of equipment types

(8) Clearance procedure and documentation
-

Late arriving document

-

Faulty document

-

Outmoded documentation requirement and processing method

-

Outmoded clearance facilities for vessel and cargo

-

Importers allowed to order shipments without sufficient funds to take
delivery on arrival

(9) Dynamic effects
-

Emergency diversion and transshipment of cargo destined for another
port, which can bring temporary peaks in quantities of cargo, which a
port has to handle

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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-

Period of exceptionally bad weather

(10)

Function and location of the port

-

Impossibility of improving back-up land accesses in ports because
adjacent lands have been occupied by urban developments

-

Activities carried out in the port area, not related directly to cargo
handling, which may conflict with higher port throughput.

-

Special difficulties which may occur with traffic of landlocked countries

-

Dislocation of traffic by decisions of neighboring countries if ports are
serving regional trade

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
Company – Chua Ve terminal

CHAPTER 2: CONTAINER CARGO CONGESTION AT
THE PORT OF HAI PHONG JOINT-STOCK COMPANY –
CHUA VE TERMINAL
2.1.

Introduction of Chua Ve Terminal

2.1.1. General information about Chua Ve Terminal
2.1.1.1. General information about the Port of Hai Phong Joint-Stock
Company
Established in 1874, with more than over 140 years of development, Port of
Hai Phong has become one of the leading port operators in the North of
Vietnam. Located in the triangle economic zone Hanoi – Hai Phong – Quang
Ninh, a well-developed area with good infrastructure in transport, Port of Hai
Phong is the most popular destination for the export and import activities not
only of those provinces but also of the whole Northern part of the country.
Port of Hai Phong’s main premises are Hoang Dieu Terminal, Chua Ve
Terminal, Tan Vu Terminal and Bach Dang Terminal
From 1st July, 2014, Hai Phong Port has transformed its legal form from
Limited Liability Company into Joint-Stock Company. The company operates
under the international name “Port of Hai Phong Joint-Stock Company”
2.1.1.2. General information about Chua Ve Terminal
Business name: Chua Ve Terminal – Port of Hai Phong Joint Stock Company
Address: No. 5 Chua Ve Street, Dong Hai 1 Ward, Hai An District, Hai Phong
Phone: 0313.765784; Fax: 0313.765784
Chua Ve Terminal is a branch directly under Hai Phong Port which was
established in 1997. Before 1995, Chua Ve Terminal had two areas. In the first
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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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area, departments, transaction and port operation places were built. In wartime
and subsidizing period, port mainly operated general cargoes, aid and exported
agricultural product. In the second area, in a period of war, military cargo and
building materials were operated.
Until 1995, because of requirements of separating Chua Ve Terminal into two
enterprises: Chua Ve Stevedoring Enterprise and Doan Xa Stevedoring
Enterprise. Chua Ve Stevedoring Enterprise remained the organization,
infrastructure, transporting vehicles and handling equipment.
After the period of two years 1995 and 1996, being invested by Ministry of
Transport and Hai Phong Port, Chua Ve Enterprise had basically changed in
terms of scale. The enterprise built yard with 70,000 m 2, operation building,
CFS warehouse as well as equipped facility and equipment for operation.
In July 2007, Chua Ve Terminal was officially put into operation after
renovation and construction. Until now, Chua Ve Terminal is one of the biggest
container terminals in the North of Vietnam with the handling capacity of
500,000 TEU/year. Chua Ve Terminal is the international standardized modern
container terminal, operating on the basis of application of information
technology, having professional staffs in the field of management of container
port operation. Chua Ve Terminal constantly improves and enhances customer
service quality.

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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Figure 1: General layout of Chua Ve terminal

2.1.2. Main services
-

Container handling service at berth

-

Yard leasing, forwarding, container stuffing and de-stuffing, reefers
storage, cargo inspection and quarantine.

-

CFS warehouse service: Consolidation and distribution

-

120 tons electronic weigh bridge for containerized bulk cargoes.

-

Handling equipment and vehicle repairs. Container cleaning and repair

-

Container and other cargoes transportation by road

2.1.3. Infrastructure
Table 1: Storage area at Chua Ve Terminal
STORAGE

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Recommendations to relieve container cargo congestion at the Port of Hai Phong Joint Stock
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CFS storage

3 300 m2

Container yard

202 110 m2

CFS storage is served to consolidate and break bulk cargo with 3 300 m 2.
Container yard is 202 110 m2.
Table 2: Berth at Chua Ve terminal
BERTH

Numbers of berth

05

Total length of berth (meters)

848

Depth alongside (meters)

-8.4

L.O.A (meters)

175

This is a specialized container terminal with total 848m length of 05 berths
which are designed according to standard of first level terminal. Chua Ve
terminal has
-8.4m deep alongside and 175m L.O.A. Yard area is 150,000
m2 with wharf surface pressure is 8-16 T/m 2, being able to handle 5 ships
simultaneously with throughput capacity about 500,000 TEU/year.
Table 3: Equipment at Chua Ve terminal

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