Cambodia needs to focus on infrastructure development if it wants its shipping and logistics industry to move forward.
For in depth analysis of Cambodian Business, visit Capital Cambodia
In a presentation during the 17th Asean Ports & Shipping Expo at NagaWorld Hotel & Casino, Primo Ye, country manager of Maersk (Cambodia) Ltd, said that, of all the challenges in the sector, it is the infrastructure problem that needs the most immediate attention.
Headquartered in Denmark, Maersk is the world’s largest container shipping company. It has a presence in Cambodia since the early 1990s.
In the presentation, Mr Ye also mentioned problems related to capacity, productivity and efficiency, the garment supply chain, and cut-off times.
In a subsequent interview, Mr Ye noted that critical infrastructure, especially the roads, airport, railway, and port in Sihanoukville, or leading to it, are too small or inadequately equipped to support increasing cargo flow.
Sihanoukville, home to the Kingdom’s sole deepwater seaport, is Cambodia’s most important trade link to the outside world.
Mr Ye especially took issue with the current road to Sihanoukville. According to him, trucks bringing cargo to Sihanoukville only make one run per day because of congestion and the road’s poor condition.
Mr Ye said the train service to Sihanoukville is helping alleviate the problem. But according to him, the service is unstable and is prone to technical issues.
In addition to infrastructure, Mr Ye said cut-off times are another major challenge that needs immediate attention. “In other countries, there is multiple sailing every week. But in Cambodia, there is only one,” he noted.
The weekly cut-off time, according to him, is the main reason for the congestion on the roads leading to the port city. “All cargo needs to be at the Sihanoukville port by midday on Saturday. So every Friday and Saturday, there is heavy truck movement and congestion on the roads,” he pointed out.
In addition to the above, Mr Ye said Cambodia also faced problems related to the lack of talent, trucks, and good warehouses.
Despite the challenges, Mr Ye said he is optimistic about the future. “The government and the private sector can work together to address these challenges,” he stressed.
Mr Ye expressed high hopes for the expressway linking Phnom Penh and Sihanoukville now under construction. The $1.9-billion project is expected to be completed by 2023.
“Currently, it takes 10-12 hours to transport cargo from Phnom Penh to Sihanoukville. With the expressway, it will only take 3 hours,” he noted.
Cambodia has a growing shipping industry, which is mostly concentrated and operates out of Sihanoukville Autonomous Port. PAS is complemented by smaller river ports in Phnom Penh and a few other provinces. New ports are planned or already under construction in the provinces of Kampot, Kep, and Koh Kong.
The country’s growing economic clout and developing trade and shipping industry were important factors in the decision to host the Asean ports and shipping summit in Cambodia. It is the first time the Kingdom hosts the event.