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Above 80 % of Vietnamese imports, exports transported by foreign shipping firms

Above 80 % of Vietnamese imports, exports transported by foreign shipping firms

HANOI: Vietnamese shipping companies are losing in their own homeland as domestic producers continue to choose foreign shippers for their imports and exports. More than 80 per cent of Vietnamese imports and exports are transported by foreign shipping firms, said Do Xuan Quang, chairman of the Viet Nam Logistics Association (VLA).

There are only 40 foreign shipping companies in Viet Nam, three to four per cent of the total number. They connect Viet Nam with Africa, the Middle East, the United States and Europe. Meanwhile, more than 600 Vietnamese shipping companies handle mostly domestic and Southeast Asian markets.

According to experts in maritime transport, domestic ships take only 10-12 per cent of market share in Viet Nam. There are no direct routes between Viet Nam and Europe or the US, the nation’s largest export market.

Statistics show that there were 1,840 marine transport vessels as of July this year with a total capacity of 7.3 million dead weight tonnage (DWT). Of these, there were 1200 bulk carriers and smaller ships, about 500 vessels running on international routes – but only 32 container ships. Furthermore, the average age of the Vietnamese vessels is high, currently about 17.7 years old, while the average age of foreign fleets is about 10 years.

Shipping experts blame low-quality service by Vietnamese ships on backward fleets and weak business capacity by local transport companies. Vietnamese ships are mostly small, expensive, of poor quality and old, which leads to high operating costs. Many Vietnamese ship owners also run transport companies.

Tran Binh Phu, general director of the Transport and Chartering Corporation (Vietfracht), said no Vietnamese companies in sea transport were strong enough to develop fleets even at regional level. In addition, the main weakness of the shipping industry was in management and connections between carriers and shippers.

According to Bui Thien Thu, deputy director of Viet Nam Maritime Administration, modernising the fleet was necessary to developing the maritime transport sector. At least US$2 billion was needed to enhance the country’s share of import and export transport, Thu added.