PSA International is deepening its presence in Vietnam with a joint venture to develop and operate a new deep-sea container terminal at Lach Huyen Port in Hai Phong, northern Vietnam.

The Singapore-headquartered port giant said its local subsidiary PSA Vietnam had signed an agreement with Lach Huyen International Logistics & Industrial Park to invest in Lach Huyen Port Investment Joint Stock Company. The partnership will develop four deep-sea container berths with a combined annual handling capacity of 4.5m teu.

Construction of the first two berths is scheduled to begin at the end of 2026, with completion expected in 2028. The remaining two berths will follow in a subsequent phase, with the full project targeted for completion by 2035.

The announcement comes as global terminal operators race to expand their presence in Vietnam, one of Southeast Asia's fastest-growing economies.

In April, APM Terminals Management and Hateco Group signed a deal with Da Nang City to develop the Lien Chieu Container Port, a $1.7bn project with an annual capacity of 5.7m teu that will serve as central Vietnam's only deep-sea terminal. That project, which broke ground with Maersk chief executive Vincent Clerc in attendance, is expected to go live in early 2029.

The China-plus-one manufacturing shift is reshaping Vietnam's port hierarchy, according to SeaIntelligence.

While Ho Chi Minh's connectivity has largely plateaued despite the country's manufacturing boom, Haiphong has surged past it with a 5.1% gain in the latest quarter alone, the consultancy said in a recent report.

"Its geographic proximity to South China's manufacturing clusters translates directly into cross-border supply chain integration, making it the primary maritime beneficiary of new service strings.

PSA said its Lach Huyen investment reinforces its "Node to Network" strategy, which aims to strengthen connectivity across its global portfolio of more than 70 terminals in 45 countries.

"Vietnam is one of Southeast Asia's most dynamic and rapidly growing economies and this project reflects PSA's long-term commitment to the market," said Nelson Quek, PSA International's regional chief executive for Southeast Asia. "By adding a strategic deep-sea hub at Lach Huyen to our existing network, we are strengthening our Node to Network strategy and enhancing connectivity across regional and global supply chains."

The development complements PSA's existing operations in northern Vietnam, including inland container depot facilities in Bac Ninh.

Together, the facilities will form an integrated logistics ecosystem connecting inland cargo hubs with global shipping networks, enabling PSA to offer end-to-end multimodal logistics solutions.

Nguyen Vinh Hau, general director of LHF, said the project was "an important milestone in our vision to establish Northern Vietnam as a leading logistics and industrial gateway in Asia."

The terminal will be located within the Lach Huyen Free Trade Zone, a 1,700-hectare complex integrating an industrial park and deep-water port facilities.

The wave of investments underscores the growing strategic importance of Vietnam and Southeast Asia more broadly in global supply chains, as manufacturers diversify production away from China to mitigate tariff risks and tap into the region's young workforce and expanding network of trade agreements.

The resulting surge in trade flows has driven demand for transport infrastructure across the region, attracting not only global operators like PSA and APM Terminals but also Chinese investors.

China's outward direct investment into ASEAN surged 36.8% to $34.4bn in 2024, with Asia's share of total Chinese ODI rising to 70.2% from 66.5% in 2022 and Vietnam among the top destinations, according to DP World and Moody's Ratings.

While Chinese investment has focused primarily on renewable energy and grid infrastructure, Moody's noted that multimodal transportation and logistics is also a priority sector under the country's latest five-year plan.