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VietNamNews

Shipping sector sails into rough waters this year

Update: April, 18/2012 - 10:25

HA NOI — Viet Nam marine transport sector is expected to face difficulties, as forecasts for the world economy remain gloomy.

Truong Dinh Son, general director of the Viet Nam Sea Transport and Chartering JSC (Vitranschart), said the expectations for the global economy in 2012 remained bleak, and that the shipping industry would continue to take blows from declining economic growth as well as the European debt crisis.

Son said, total global dry cargo trade this year was expected to rise by 4 per cent compared to 2011, while fleet growth would go up by 10 per cent. This would lead to decreased demand of nearly 44 million DWT (Dead Weight Tonne)

General director of Dong Do Maritime Corporation Bui Minh Hung said that according to international and local economists, this year their operations would face more challenges than opportunities.

Hung added that the shipping industry had been going through a prolonged decline since mid-2008 despite a temporary recovery in the second quarter of 2009. The recovery, he said, was mainly attributable to import orders of raw materials from China, which were influenced by the economic regulatory policy of the Chinese goverment. As a result, marine transport industry was difficult to predict and posed high risk.

Slow business and capital shortage have caused other problems in the industry, such as untrained staff and declining fleets.

A number of shipping companies have been reporting losses. For instance, the Viet Nam Ocean Shipping Company (Vosco) claimed a loss of more than VND51 billion (US$2.4 million) in the third quarter of last year, while Vinaconex Shipping Company (VCV) suffered a loss of more than VND6.5 billion. Southern Container Corporation lost more than VND37 billion.

Some shipping companies posted small profits, including the Ha Noi Maritime Corporation which earned a net profit of VND108 million, the Hai Au Ocean Shipping Company earned a profit of VND2.7 billion and the Dong Do Maritime Corporation, VND1.3 billion.

Statistics show that around 700 container ships are sitting idle at ports, awaiting cargo. Many of these vessels are 3,000 TEU vessels.

Container shipping agencies have had to use cost-saving measures, such as employing mechanical feeders. — VNS

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