Need for distinguishing between Port and Port Authority

(VLR) There have been articles on logistics journals mentioning about “port authority”- a tool that is able to replace functional organization carrying out inefficient management and business work in a number of ports. This can be considered as expedient measurements to solve to present issues in the progress of Vietnam’s integration to the world. However there should be deeper thinking before making a decision – a consideration to sustainable effect to business of a sector – in the situation of an uncertain Vietnam’s economy and the world’s crisis.

From thinking to reality

There have been articles on logistics journals mentioning about “port authority”- a tool that is able to replace functional organization carrying out inefficient management and business work in a number of ports. This can be considered as expedient measurements to solve to present issues in the progress of Vietnam’s integration to the world. However there should be deeper thinking before making a decision – a consideration to sustainable effect to business of a sector – in the situation of an uncertain Vietnam’s economy and the world’s crisis.

There are some thoughts to help readers to approach the matter.

PORTS AND THEIR FUNCTIONS

In Vietnamese, “cang” (port) is a place where cargo and passengers are received or sent to other places. They are located in convenient transport location, equipped with equipments and possessed means of transportation serving passengers’ and cargo’s movements and transport as “Cang Hang khong Quoc te (Internaitonal Airport)”, “Ben xe” or “xa cang” (station) and “Ga Tau hoa” (train station).

In English, terms become more complicated. In the past, there was a term “Harbor”, a coastal area which part of it is naturally surrounded by land, where it is suitable for ships to shelter when there are storms. “Port” is a part of “habor” where vessels can anchor for loading/unloading cargo or for receiving/ sending out passengers. As many centuries passed, global trading has been developed, and the number of vessels has become bigger in quantity so that ports have had to be expanded in size and to change in functions. “Harbor” is used to tell about the administration function of an organization responsible for safety and law; and “port” or “sea port” is now not merely the ending point in sea transport or the stop point in the process of transporting cargo but becomes a center connecting means of transport, a place where logistics activities take place (transport, warehousing, loading/unloading, inventory management, communication exchange, free trade, reproduction…) and there are places expanded to be distribution parks of countries, regions or of the global area, creating new value added activities and serving distribution supply chain more effectively at the lowest cost.

MODEL OF GOVERNANCE-ADMINISTRATION AND ACTIVITY MANAGEMENT AT PORTS

Sea port systems have long been existing, together with the world maritime development. At the present, there is no coastal country without a sea port for it is a place to connect it with the outer world. And deep integration do require roles and functions of seaports to be at their best.

It can be seen that countries with strong maritime are well developed industrial ones.

Czech and Switzerland are countries deep in land and without coast. However, they possess rather large fleet operating around the world and they lease ports from neighbor countries. Countries in Europe and America have become developed and rich thanks to their perfect port systems. Four “Asian tigers” in economy (Singapore, Hong Kong, Taiwan and Korea) had their rises in the middle of the 20th century also thanks to sea and sea ports.

Resolution from the 4th Central Committee Party, the 10th plenum “Strategy to develop Vietnam sea economy to 2020” stated:” We should be a strong maritime country. Sea and coastal economy will contribute 53-55% total GDP of the country.”

This is the call for the nation’s determination and a challenge to those in maritime business.

So far there has been no fixed model for all countries. All models are for reference and then they are applied to countries mostly due to similarities, practical conditions, maritime practices, and international law.

In general, governance-administration rights on regulations, policies, development directions in accordance to UN’s Convention to Law of the Sea 1982 (UNCLOS 1982) and maritime practices have been carried out in priority by countries with sea ports. At the same time, they try to integrate will with the whole world for economic development purposes, especially after the container revolution and with the trend of global logistics. The trend of door-opening, connecting and associating has become popular in sea port section.

In organization, a sea port normally has two functions:

(1) Governance-Administration is carried out on the basis of a national, international, and maritime laws regulated by conventions to have been signed or approved by a country as maritime safety, sea port security, pollution prevention and sea environment protection, crew taking-care… this is carried out by organization as Harbor master Office, Port Authority, Port State Control… These organizations are capable to act on the name of local governments to capture vessels violating regulations or unqualified ones and they are capable to work with organizations of register or environment protection to publicize technical data or nationality of a regulation-violated vessel as a warning to liners. Organizations in the form of Port State Control operating worldwide, among which are Paris MOU and Tokyo MOU…

(2) Management- Exploitation Seaport is carried out by economy corporations, JVs, state owned companies or private bodies, mostly based on productions and businesses mechanism of the country possessing a sea port to make regulations to be approved by concerning sides on the basis of economic effectiveness, profits, added values, situations and the trend of global economic development.

THINGS TO BE DONE FOR BETTER ACTIVITES OF SEA PORT SYSTEMS

As we know, sea port systems are state-owned property, important infrastructure of transport assigned to functional bodies of Central-level for professional management and to provincial Committee, cities belonging to Central Government for holistic management on the basis of the governing bodies regulated by Constitution. Therefore, the term “port authority” can be understood as “local authority”. In our opinion, the use of them in the field of economy should be limited, but the name of “location” instead as Hai Phong Port, Saigon Port…

There should be a strategy and feasible policies which are suitable to the country’s situation, existing international law and the trend of global development to deal with uncertainties of the global economy.

We suggest that:

(1) Regulations concerning to international trading, for example, the newly revised Trade Code of Vietnam issued January 1st, 2006 (section on logistics, and private bodies doing logistics business), Transport Law (multi-modal transport is not mentioned) and other documents, need to be considered and revised.

(2) An interdisciplinary organization with power of macro level should be established for strategy planning and development planning of Vietnam sea and island economy section, and for managing and solving issues in the section. If it is not suitable to present conditions, there should be a Board of Guidance like existing ones from the Government as Tay Nguyen, Tay Bac, Tay Nam bo Boards of Guidance.

(3) There should be coordination among Ministries and coastal provincial authorities especially in the field of administration, social management, education, social security, national and international law.

(4) Universities majoring in sea port management, synchronous logistics management should be soon established for sustainable development and for training qualified workforce.

(5)There should be coordination with Associations of sea economy section (Fishing Association, Vietnam Logistics Association, Sea Port Association…) in carrying out development strategies, solving internal and external trade disputes. Besides, roles of Associations in international markets should be made good use of as well as their members’ expertise.

Logistics is a driving force for sea ports to modernization and industrialization. A country with strong sea economy and advanced industry should have a developed logistics section. This is an important task of the country’s.

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