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confusion and congestion would result until
new facilities and systems could be estab-

By niid-1966 the specific measures, dis-
cussed in detail later in this section, had
begun discernibly to relieve port congestion,
and present conditions, while not yet satis-
factory, reflect very substantial improve-

Control of the CIP and Title I programs is
largely a problem limited to the Saigon area
and, more often than not, to the port itself.
Once these goods have cleared customs and
have been delivered to the importer, AID's
commodity import mission has essentially
been accomplished. Thereafter they flow,
through commercial channels within the local
economy to meet the needs of the people and
hold down inflation.

Nevertheless, the U.S. AID Mission to
Vietnam, together with other U.S. agencies
and the Government of Vietnam, maintains
a continuing interest in these and all other
commodities available in the marketplace in
an eff'ort to limit the ability of Viet Cong
military units to obtain critical supplies. This
eff'ort is described in detail in chapter IV.

Since most CIP commodities are not
shipped to Vietnam separately from other
commercial cargoes, the efforts to improve
their handling must in most cases be directed
at the operation of the entire port. The steps
which have been and are being taken toward
this end fall into five categories: (1) expan-
sion of physical facilities, (2) improved port
management, (3) increasing U.S. advisory
activities, (4) improvement of documenta-
tion procedures, and (5) tightening of port

1. Expansion of Physical Facilities. Sai-
gon Port's handling of commercial cargo has
been increased from 295,000 metric tons a
month in January 1966 to 415,000 metric
tons in November 1966 principally because
of the following measures:

— 14 additional deep draft buoy sites have
been prepared and a floating dock for roU-
on, roll-off unloading has been put into op-

— Roads and open storage areas have been
repaired or constructed. More efficient traffic
patterns have been laid out.

— More barge discharge and transit fa-
cilities have been opened. Sheet steel piling
has been provided for constructing LST and
barge landing sites in Saigon.

— Obstructions to navigation in the Saigon
River have been removed.

— Five heavy-duty hydraulic dredges for
use in port construction have been sent to

— AID has procured or contracted for 552
trucks, 156 barges, 13 tugs and 213 pieces
of handling equipment (e.g., cranes and fork
lifts) to facilitate port operations, and more
equipment is being procured — all additional
to port equipment used by the U.S. military.

— Steel plate for constructing 47 new
barges in Vietnam and rehabilitating 40 ex-
isting barges has recently arrived (these are
included in the 156 barges referred to

— 10 coastal vessels and a 3,000-ton-per-
month junk fleet have been chartered to help
move cargo from Saigon to other ports.

— The major New Port project, which is
creating an entire new section of the Saigon
port, is partially constructed and in use by
the U.S. military. It is scheduled for com-
pletion in the spring of 1967.

— A new fish market pier, south of the
main port area, is now in operation.

— A fresh water facility for ships in port
has been finished.

— 676,000 square feet of new civil ware-
house space at Thu Due, close to Saigon, is
being built. It is partially in use now and is
expected to be fully operational by April
1967. This facility possesses double the ca-
pacity of existing port transit warehouses
for civil cargo.

— Other Saigon area warehouse facilities
have been expanded to expedite port clear-

— The load on the Port of Saigon has been
reduced by the expansion of facilities at a
number of other Vietnamese ports including
Quang Ngai, Qui Nhon, Nha Trang, Da Nang
and Cam Ranh Bay. The capacity of these

FEBRUARY 6, 1967


ports has been increased more than threefold,
from 125,000 metric tons per month in Au-
gust 1965 to more than 400,000 metric tons
at present.

2. Improved Port Management

— The Vietnamese Army has been given re-
sponsibiHty for management of the port. The
Port Director, General Lan, is responsible
directly to the Prime Minister.

— To reduce congestion, the GVN has de-
creed that all cargo must be removed from
port warehouses within 30 days or be con-
fiscated and auctioned by the government.
(This decree was not being enforced satis-
factorily at the close of the year, but con-
gestion in port warehouses had been re-

3. Increasing U.S. Advisory Activities

— Since March 1966 a U.S. Customs Bu-
reau advisory team detailed to AID has been
increased from 1 to 10 and will be expanded
to 20 by February 1967. This team is work-
ing closely with the Vietnamese Customs
Bureau in improving its procedures and sys-

— A four-man U.S. Census Bureau team,
serving with AID since August 1966, is as-
sisting the Vietnamese Customs Bureau and
the Ministry of Finance in developing auto-
mated data processing systems to provide
rapid and accurate financial and logistical

— U.S. civilian and military port advisers
are assisting the port authorities of Vietnam
in improving reporting and inventory control
systems. A group of port management ex-
perts is advising on port operations.

— An eight-member team from the Inter-
national Longshoremen's Union worked with
the Saigon stevedoring companies during
most of 1966 to advise on techniques for in-
creasing cargo handling capability.

—In September 1966, the U.S. Army's
125th Terminal Command arrived in Viet-
nam to supplement the services of the AID
technical advisers to the Director of the Port
of Saigon and his staff. All of its 187 officers
and enlisted men are assigned to the com-

mercial area and working in scheduling of
ships, unloading and warehousing proce-
dures, imix)rter notification, etc. The unit
has set up its own documentation system, dis-
cussed in the next section, to provide checks
on the existing system.

4. Improvement of Documentation Proce-
dures. When tramp ships carrying bulk com-
mercial cargo are ready to unload, the con-
signee selects a stevedoring company to
assume responsibility for discharging his
cargo. Liners are called to berth and dis-
charged by stevedores hired by the steamship
companies. Ships carrying cargo of high
value are normally discharged directly into
customs controlled transit sheds in the port
area. Ships containing bulk cargoes are gen-
erally moored at buoys mid-stream in the
Saigon River and discharged into barges. In
many cases, customs officials are able to clear
such cargo as it is off-loaded, in which case
the barge can take its cargo directly to the
importer's warehouse. In other instances the
barge becomes, in effect, a floating bonded
warehouse waiting its turn to discharge the
cargo into a customs transit shed for clear-
ance. Disorderly use of barges for tempo-
rary storage is one of the major current
causes of congestion in the port.

The 125th Terminal Command has set up
a documentation system for commercial
cargo parallel to the combined coverage of
the four separate and distinct Vietnamese
systems maintained by the Saigon Port Di-
rector, the ship's agent, the stevedore and
the Customs Bureau.

When the 125th's system becomes fully op-
erational, a copy of each arriving ship's man-
ifest will be forwarded to the unit's docu-
mentation section which will prepare a
separate set of control documents for each
consignment on board. These documents will
then follow the goods from off-loading,
through intermediate stages — e.g., a barge
or a transit warehouse — ^to delivery to the
importer. The control documents will then be
returned to the documentation section. At
each step checkers will have compared the
quantity and condition of the goods with the



notations on the document, so that a com-
plete record of each consignment will be

The AID Mission's automated arrival ac-
counting system for commercial imports, be-
gun in July 1966, will produce reports early
this year on goods cleared through customs
related to records of U.S. Government pay-
ments to American suppliers for the period
July through December 1966. Later in the
spring, the system will be modified to assimi-
late input from the 125th Terminal Command
documentation section, and will then auto-
matically follow CIP imports from the orig-
inal license request through all intermediate
steps to customs clearance.

To assist AID/Washington in advance re-
views of import transactions, a system for
sorting all CIP letters of credit opened in
favor of suppliers in the U.S. or abroad, re-
gardless of amount, is being established; the
electronic sorting program is expected to be
ready very soon. Thereafter, AID/Washing-
ton commodity analysts, logisticians, con-
trollers, and economic warfare experts will
have a weekly statement available (better
than data now used) which shows all letters
of credit issued, arranged by importer, sup-
plier, and commodity involved. The review
of this information in Washington prior to
shipment will permit corrective action on
major problems much earlier than is possible
under AID's normal port audit procedures.

5. Tightening of Port Security. As the
efficiency of Saigon port operations declined
in late 1965 and early 1966 under the great
surge of military and civilian commodities,
the need for more elaborate security pre-
cautions to protect incoming cargoes in-
creased. Both the U.S. and Vietnamese Gov-
ernments have taken a number of significant
steps to this end.

Direct U.S. actions in the security field —
principally the U.S. Customs team's inspec-
tion of 10 to 20 percent of the CIP consign-
ments, the presence of several hundred U.S.
military police in the port area, and the 1st
Logistical Command's increased responsi-
bility in the commercial sector of the port —
have played an important role in recent

months in reducing loss in the port area. In
the months ahead their efforts will have an
increasingly significant impact.

Four Vietnamese organizations are in-
volved in some phase of port security — the
Navy, the military police, the Customs
Bureau and the harbor police.

The military police are responsible for con-
trolling Vietnamese military personnel in
the port area and the Vietnamese Navy main-
tains security in the shipping channel be-
tween the port of Saigon and Vung Tau at the
mouth of the Saigon River.

The Customs Bureau has 1,700 employees,
1,300 of whom work in the Saigon port.
Their enforcement operations include the
use of several large launches and 12 smaller
assault boats provided by AID in September

The harbor police, a branch of the national
police, has responsibility for physical secu-
rity in the port area. The force now stands
at 600 men, an increase of over 100 since
January 1966. It will grow by another 100
men in the next few months. The harbor
police has established checkpoints at a num-
ber of strategic port locations (see chart 2
in the appendix) i and mounts regular water
patrols covering 96 kilometers of waterways
containing up to 1,400 barges, junks, lighters,
and other miscellaneous small boats, many of
which double as homes for one or more
families. Movement of craft in the port area
is strictly controlled. Officers of the harbor
police, in patrols and at checkpoints, inspect
personal identity cards and movement per-
mits, check barge cargo manifests against
cargo on board, and detain the suspects when-
ever these inspections reveal apparent irreg-

Harbor police water-borne operations are
conducted in 4 patrol boats and 18 smaller
assault boats provided by AID, an increase
of 16 in the past year. The group's new main-
tenance staff, advised and augmented by
three expert Filipino mechanics, has tripled
the effective usage of harbor police craft in
less than a year. The boats are linked by an

' Not printed here.

FEBRUARY 6, 1967


efficient radio communications network. The
harbor police forces are advised by a reg-
ularly assigned AID public safety adviser.

The harbor police director also controls
the activities of a 167-man police field force
unit recently assigned to the An Khanh area
directly across the Saigon River from the
main piers.

Until recently, the Vietnamese Navy, the
military police, the Customs officials and the
harbor police operated independently. A
major step was taken in September 1966 to-
ward integrating the efforts of all of these
groups and the U.S. Military Police with the
establishment of joint marine and land pa-
trols. The members of these patrols, acting
together, now possess the aggregate of each
of their members' limited jurisdictions.

Heightened security efforts are reflected in
the fact that port area arrests for improper
documentation, trespassing, theft and other
offenses rose from a rate of 150 per month
in early 1966 to 500 a month by end of 1966,
while reports of major crimes dropped

E. Theft of Commercial Imports

Theft in port areas is a problem in the
less congested ports of many countries at
peace. High value, low bulk goods of a sort
not financed by AID are the thieves' prin-
cipal targets.

The AID Mission's best current estimate,
based on resurveys and spot checks over the
last few months and the judgment of the
U.S. technical experts working with the com-
mercial program, is that the recent rate of
theft of CIP and Title I commodities from
off-loading through port clearance in Saigon
is between 2 and 5 percent of the total of
all such commercial imports. The loss rate
is now believed to be near the lower end of
that range. This estimate is based on the
following sources:

— The U.S. Customs Bureau advisory
team, whose primary assignment is advising
the Vietnamese Customs Bureau, also spot
checks between 10 and 20 percent of all CIP
cargoes. These professional inspectors esti-

mate losses of CIP imports as no more than
2 to 5 percent and believe that the more ac-
curate current figure is closer to 2 percent.

— -The Vietnamese Insurance Agent's As-
sociation, comprising all insurance companies -
operating in Vietnam, reports that all-risk
coverage of CIP and other commercial goods
is available to Vietnamese importers for
losses prior to off-loading. Premiums run be-
tween 0.4 and 10 percent of the cargo's
value, with the average, however, close to 2
percent. Most of the companies also offer
their regular customers limited coverage for
a period of 30 days after off-loading (which
includes a restriction of coverage to 15 days
while the commodities are in barges) for an
additional premium of up to 0.3 percent. The
insurer may also agree to grant up to two
further 2-week periods of coverage at double
the additional premium.

Insurance coverage is fairly wide, though
selective. The local banks, which finance most
of the importers, insist on maximum insur-
ance coverage and the association itself esti-
mates that 90 to 95 percent of all CIP
cargoes are insured at some or all stages of
their voyage. The association reports that
claims paid out by all of its members for
losses during 1966 will aggregate about 1
percent of the value of goods insured. As
noted, however, this figure is subject to qual-
ification since coverage of high risks is lim-
ited and matters of proof often impede col-
lection of claims.

— Societe de Surveillance (Geneve) S.A., a
private Swiss international shipping inspec-
tion company, experienced in Vietnam, is un-
der contract to the AID Mission to review
deliveries of several types of CIP and Title
I commodities, as well as to check rice ship-
ments arriving in the ports of Qui Nhon and
Nha Trang. The goods spot checked by the
company are representative of 60 percent of
the dollar value of AID-financed commercial
imports. The company's first report, cover-
ing the period from March 1966 to October
1966, shows total shortages of "less than one
percent." Technically, this is a measure of



loss from time of shipment to the time the
vessel arrives at the port of Saigon. How-
ever, while food supplies are nonnally
checked in the hold of the ship, pharma-
ceuticals and general CIP cargo are moni-
tored in the transit warehouse and machin-
ery is inspected at its end-use location.
Therefore, while not a comprehensive deter-
mination of total loss, this report has con-
siderable bearing on the matter.

— Officials of the Food for Peace program,
the 4th Terminal Command, and others
working closely with the program state that
there is little theft of Title I rice.

— Despite the fact that AID-financed com-
mercial imports achieve their purposes when
they have passed through customs to the
market, frequent audits are conducted by
the AID Mission's Financial Management
Staff to determine the ultimate use made of
selected commercial imports. These audits
are primarily to determine whether goods
are reaching the enemy, to -determine the
effectiveness of importing these commodities
and the reliability of importers. Audits are
currently in progress on the end use of over
$100 million worth of commercial imports,
or about 25 percent of total shipments. This
increased auditing program has been made
possible by expansion of the AID Mission
audit staff from 17 to 34 since May 1966. A
survey of audits recently completed, includ-
ing one on $4 million worth of textiles, indi-
cates that over 95 percent of the examined
AID-financed commercial imports shipped
to Vietnam are properly used in the economy.
The losses noted in these audits — less than
5 percent of the total shipped — include diver-
sion and theft in the port as well as loss,
breakage, theft and improper use after the
commodities are delivered to the importer
and thence to the Vietnamese economy.

The measures recently initiated should be-
come fully effective early in 1967 and further
reduce theft of commercial cargo in the
poits. Our new data systems will provide
more accurate measures of these losses

III. strengthening the Vietnamese Society:
AID Project Assistance

A. Growth of the Program

The AID project program is a complex of
many technical assistance, social develop-
ment, refugee assistance, institutional devel-
opment and relief activities. The great ma-
jority of these projects are planned and
executed in the rural areas in direct support
of the Government of Vietnam's revolution-
ary development program. Revolutionary
development is an integrated military and
civil effort to liberate the people of Vietnam
from Viet Cong control, provide security,
initiate political, economic and social devel-
opment, and win the support of the people
for their government. AID's role, on the
civil side, is vital to success in this "other
war" — the indispensable partner of the mili-
tary effort to defeat communist aggression
and insurgency.

AID's support takes the form of technical
advisers for the planning and execution of
projects, the training of Vietnamese, and the
provision of construction materials, many
types of equipment, seeds, fertilizer and med-
ical and relief supplies. These goods and
services are provided under projects jointly
planned and executed by both governments.
They include over 30 different agricultural
activities, irrigation and water management,
fishery activities and forestry projects; about
50 education activities — construction of
hamlet schools, provision of textbooks and
other educational materials, teacher training,
support of vocational and agricultural
schools in the rural areas and adult training
programs; a massive public health program,
including the construction, equipping and
staffing of provincial hospitals, a large-scale
immunization program, nursing education
and training and a variety of sanitation and
public health programs; refugee programs to
construct and equip camps, carry out educa-
tional and self-help activities within the
camps, and relocate refugees or return them
to their villages; the Chieu Hoi or "open
arms" program, designed to attract defectors

FEBRUARY 6, 1967


from the Viet Cong and North Vietnamese
forces, screen, assist and reorient them, and
reintegrate them as far as possible into the
Vietnamese mihtary forces or into the civil
society; roadbuilding, electrification, water
supply and other-public works projects; pro-
grams in public administration; in labor and
trade union development; and relief pro-
grams using U.S. agriculture products under
Titles II and III of P.L. 480.

To carry out these activities, project com-
modities must be transported from the ports
through the logistic systems of the appropri-
ate Vietnamese ministries to regional and
provincial warehouses and then to project
sites in thousands of villages and hamlets
rarely reached in the past, where transporta-
tion and security are poor and the Viet Cong
are near or present.

It is important for the political and social
objectives of the program that the Viet-
namese Government at all levels be directly
involved in conducting these projects, in-
cluding the distribution of supplies. It is for
this reason that AID's commodity manage-
ment programs are directed toward improve-
ment of Vietnamese systems.

In fiscal year 1965 the U.S. Government
obligated over $63 million for project com-
modities including P.L. 480 Title II and III
supplies. Because of the necessity to expand
the agriculture and education efforts in the
provinces, to meet the needs of a greatly in-
creased flow of refugees, and to extend direct
medical services to all provinces the project
program had to be greatly expanded. Obliga-
tions for the project program and relief com-
modities in fiscal year 1966 more than
doubled to $135 million. Actual expenditures
against shipments in calendar year 1966
were $68 million.

Along with the project program's growth,
AID has sought to increase the efficiency of
distribution of project commodities and to
reduce loss and wastage under wartime con-
ditions. Since many of these pi'ograms are
designed to support the revolutionary devel-
opment efforts in the countryside, where in-
security and lack of government control is

greatest, the loss rates in these programs
have necessarily been greater than those ex-
perienced in the commercial import program.

B. Project Commodity Procedures and Con-

1. Improved Port Handling. Until July
1966 project commodities and CIP cargoes
were handled in the same way in the Port
of Saigon. The only distinction between the
two lay in that project goods were consigned
to a Vietnamese Government agency rather
than to a private importer. Importation of
project commodities was therefore likewise
impeded by port congestion. While steps
taken to improve port facilities, handling
and security mentioned in the previous
chapter benefited the project program as
well, further action was necessary and feasi-
ble with respect to project goods.

In July 1966 the U.S. Army's 1st Logis-
tical Command was given operational re-
sponsibility for discharging all project com-
modities landed in the Saigon area (90
percent of the total) and moving them to
ministry warehouses. The 1st Logistical
Command assigned operational responsibility
to the Army's 4th Terminal Command, a
unit of 809 officers and men highly skilled in
port operations, which also handles military
cargo in the Port of Saigon.

The 4th Terminal Command has set up a
system of tight physical and documentary
controls over project cargo which have re-
duced losses between the port and the min-
istry warehouses to a documented six-tenths
of 1 percent during the month of November.
The 4th Terminal Command estimates that
figures for December will be just as good or
lower than for November. Similar procedures
are now being installed at the ports of Da
Nang, Qui Nhon and Nha Trang, which to-
gether handle all of the project commodities
not passing through Saigon.

2. Movement from the Ports to the Prov-
inces. The 4th Terminal Command has estab-
lished an extremely effective system for get-
ting the goods to Vietnamese Government
warehouses, but their movement forward



from the warehouses in Saigon is handled
separately by the several ministries, most of

Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 56, Jan- Mar 1967) → online text (page 40 of 90)