Vietnam rejects waste imports to ease port congestion

Vietnam rejects waste imports to ease port congestion

The Tan Cang-Cai Mep International Terminal is rejecting shipments of paper and plastic scrap as high volumes of such cargo are overwhelming port operations. Photo credit: Tan Cang-Cai Mep International Terminal.

Vietnam is no longer accepting imports of paper and plastic scrap because its main marine terminals are congested, largely due to waste exporters seeking new markets because of the Chinese ban on such goods.

The congestion and ban reflect the continuing struggles of US waste exporters to access new markets, as exports of the banned commodities fell 21.2 percent in the first quarter to 229,662 TEU, according to PIERS, a sister product of JOC.com. However, US exports of waste to Vietnam in the first quarter surged 277 percent to 11,066 TEU after a 240 percent jump in US waste exports to the country in 2017. Vietnam’s market share of these banned wastes rose 3.8 points to 4.8 percent in the quarter, building on the 2.4 point gain the country made in 2017.

The Vietnamese bans were implemented “to maintain service quality and facilitate import-export activities of all enterprises,” according to a letter to customers from Tan Cang-Cai Mep International Terminal and Tan Cang-Cai Mep Thi Vai Terminal owner Saigon Newport Corporation released by the Institute of Scrap Recycling Industries.

Hapag-Lloyd also sent a notice to shippers that the terminals are no longer accepting imports of paper and plastic scrap.

As of June 15, the terminals will only discharge containers of paper scrap from vessels if accompanied by valid import permits and written date commitments to pick up cargo. From June 25 to October 15, the terminals will not accept any plastic scrap.

China ban fuels growth beyond Vietnam

The congestion and ensuing limitations result from China’s global ban on the import of a wide array of waste products as part of an ongoing environmental clean-up effort. Because the ban is global in nature, shippers from other countries are also flooding Vietnam with waste as exporters look for new markets.

While Vietnam’s congestion is evidence of its allure to waste exporters, those in the United States have been having greater success getting their shipments into the Indian market, where volume rose 208 percent in the first quarter to 49,909 TEU, lifting India’s market share 16.2 points to 21.7 percent.

India is the No. 2 market for US exports of the banned waste, followed by Indonesia, where volume rose 320 percent in the quarter to 12,265 TEU, while Vietnam is the No. 4 destination.

The US ports that have seen the greatest increase in the banned volumes moving to Vietnam are Oakland, Los Angeles-Long Beach, and New York-New Jersey.

Contact Dustin Braden at dustin.braden@ihsmarkit.com and follow him on Twitter: @dustin_joc.