Vietnam to invest $1.5 billion in a container fleet

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Vietnam, possibly inspired by similar initiatives in its neighbor Thailand, wants to expand its fleet of container ships sensitively. That’s according to an announcement from the Vietnam Logistics Business Association (VLBA), which has reported setting aside a budget of $ 1.5 billion for the construction, purchase or lease of container ships.

It is expected that the fleet will be deployed mainly on routes connecting Vietnam with China, South Korea, Japan, Malaysia, Singapore, India and the Persian Gulf. Currently, Vietnam has ten container shipping companies. These carriers have a combined capacity of 35,519 standard containers (teu).

The association pointed out that Vietnam recorded imports and exports of 24 million teu last year. However, only 7 percent of that volume was carried by local operators. Limited capacity was the main reason.

The logistics organization, which is controlled by the state, is nurturing plans to raise the necessary financial resources for the purchase of new ships together with the government and private shipping companies.

It was added that Vietnamese shippers are also facing a shortage of containers. However, that too would be invested. Possibly a series of containers would be purchased, but possibly a rental purchase will be worked on in the long term. After all, this should help shippers to limit their capital expenditure.

Over the next two years, the Vietnamese fleet will proceed to the purchase of ships with a capacity between 1,800 teu and 2,500 teu. “The shallow draft of these ships allows them to dock in the port of Hai Phong,” spokespersons for the organization note.

“Fourteen ships were to be purchased next year. The following year, another six copies were to be purchased. The intention is to use these ships on routes to China and Japan.”

“However, from the middle of this decade, ships with a capacity between 4,000 teu and 5,500 teu will be sought. These ships would be deployed on routes from East Asia to Southeast Asia and destinations at greater distances.

“The Vietnamese container market is particularly fragmented,” notes Tan Hua Joo, analyst at Linerlytica. “The individual carriers follow different growth strategies. However, the state-owned companies, including the Vietnam Maritime Corporation, continued to underperform.”

“In recent years, these parties have shown little activity in expanding their capacity. Nor have they been able to benefit from the strong performance recorded in the container markets over the past two years.”

Hai An was the most active Vietnamese shipping company in the purchase of ships in the past year. Two vessels of 1,700 teu were purchased. In March, Hai An ordered two more 1,800 teu ships from China’s Huanghai Shipbuilding shipyard. Those orders are due to be delivered next year.

” However, the Vietnamese fleet remains particularly small and is mainly focused on feeder activities, ” emphasizes Tan. “No capacity for deep-sea operations has been developed to threaten the dominance of foreign companies in Vietnam.”

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