These problems prompted Hapag-Lloyd to stop accepting import cargo for Yangon at the end of July.

“This decision has been made due to the draught restriction at Yangon port, causing limited feeder capacity into Yangon,” the carrier said in a customer advisory on 27 July. While the advisory refers only to import cargo, the Hapag-Lloyd website shows the line has no services serving Yangon or Myanmar.

It said that, for existing shipments, “transhipment dwell time will be longer than expected for connection of your cargo into Yangon”.

There is a high water draught restriction of 8.5 m for vessels serving downtown terminals in Yangon.

While an apparent move by Hapag-Lloyd to pull out is the most extreme among carriers, others, including CMA CGM and its Australian-based subsidiary, ANL, have imposed congestion surcharges in recent weeks.

Justifying the move ANL said, “Congestion in Myanmar terminals is reaching critical levels. Yangon terminals are heavily affected, with vessels waiting significantly beyond their normal berth wait times. The delays stem from lower yard productivity due to heavily congested terminal yards [and] lead to increased costs.”

Other carriers told Fairplay they were unaffected by congestion as such but did highlight shore-side issues that were having an impact on operations.

Intra-Asia carrier X-Press Feeders, which has weekly services jointly with Inter-Asia Lines and COSCO linking Singapore, Port Klang, and Yangon, said there were delays in clearing imports in Yangon caused by changes to customs procedures. “They used to have a fast-track clearance system but we understand this has been stopped and all imports are now subject to strict customs inspections and checks, which are delaying the process and import delivery,” Nelson Sequeira, X-Press Feeders senior director, told Fairplay.

“There is also a surge in volumes, both of imports and exports,” he continued. “Sugar is moving into Yangon in large volumes and, at the same time, they are exporting pulses, which is causing a space crunch, especially with very heavy boxes, given the size of ships deployed due to shallow draughts.” 

Imports grew 12% in value terms to USD16.5 billion last year, while exports rose 5% to USD13.3 billion.

Capacity constraints were highlighted by Japanese container line consortium One Network Express (ONE) and Maersk, along with its intra-Asia subsidiary, MCC Transport, although they said they were not experiencing delays.

“Due to peak season, especially for outbound [cargoes], mainly apparel, and inbound, especially consumer goods, equipment, and space availability for common feeders are challenged,” ONE told Fairplay.

Maersk told Fairplay, “We are aware of local operational challenges, particularly river draught issues, and we work closely with Yangon terminals and carefully plan our vessel calls to ensure we maintain schedule integrity.

“The past five years’ trade growth in Myanmar has seen a boom in container traffic and the present infrastructure is still catching up to meet the increased demand. Creating a modern and efficient infrastructure could help increase the country’s competitiveness in the international market.”

Sequeira was unaware of any feeders pulling out of Yangon recently but said, “Perhaps no one is adding more tonnage to cater for the volume surge as the service dynamics simply do not work. Lines are unwilling to pay more [for] heavy boxes so feeder operators are not adding more tonnage and limiting operations to their regular network.”

Pointing to the other issues facing carriers, a senior executive from a regional carrier said Myanmar had the highest terminal stevedoring charges in southeast Asia “and perhaps even Asia, at USD165/teu for laden boxes and USD150/teu unladen”. That is despite a USD25/teu cut in Yangon stevedoring charges from 1 August by the Myanmar Port Authority.

He also pointed out that carriers had to remit disbursement charges in advance of vessel arrival. “This is totally archaic and not in line with international practice. Lines are prohibited from collecting terminal handling charges in in Yangon,” he added.

Cargo owners prefer to use downtown terminals such as TMT and Myanmar Industrial Port, rather than Hutchison Port Holdings’ Myanmar International Terminal Thilawa, which is about 25 km from the city, to save time and high trucking costs.