Vietnam is planning to invest US$1.5 billion to launch a nationwide container shipping business in response to a sharp rise in freight costs and supply chain disruptions amid the Covid-19 pandemic.
According to professional shipping news portal maritime executiveThe Vietnam Logistics Business Association plans to first develop the intra-Asia shipping business and then expand the international business, waiting for private investors to be ready to provide their respective funds.
Having a fleet of container ships will reduce the “huge foreign exchange” the Vietnamese government spends on shipping and limit the risk of rising freight rates, the association said, giving the country a tool for long-term economic security, the association said.
Dependence on foreign shipping companies
As of 2021, about 90% of Vietnam’s imports and exports are transported by sea, using 24 million 20-foot equivalent container units (TEU). However, the country’s current fleet handles only about 7% of it, while the rest is carried by foreign shipping lines.
Currently, there are 10 container shipping companies in Vietnam with 48 container ships with a total capacity of 39,500 TEUs, 13 of which are over 25 years old, and 15 of which have a capacity between 300 and 600 TEUs, only for domestic use operation. Only 14 of these vessels have a capacity between 1,000 and 1,800 TEU and are available to operate on intra-Asian routes.
Priority on intra-Asia routes
The creation of the national shipping company will be carried out in stages. The first phase, which will last three to five years, will cost about $1 billion for ships and another $500 million for logistics facilities. It will focus on routes to South Korea, Japan, China, India and the Middle East, which together account for about 60% of Vietnam’s imports and exports.
The second phase will not be launched for at least five years, during which time the focus will remain on Asia. Its goal is to expand the network of national shipping companies, offering international routes to the Americas, Europe and other global regions. Much depends on how successful the Vietnamese government is in mobilizing private capital investment.
The Vietnam Logistics Business Association envisages the use of post-Panamax and large container ships with a capacity of at least 4,000 TEU, and more likely between 6,000 and 11,000 TEU. The plan states that it may even require very large vessels with a capacity between 11,000 to 14,000 TEU or even 18,000 TEU.
Vietnam is planning to invest US$1.5 billion to launch a nationwide container shipping business in response to a sharp rise in freight costs and supply chain disruptions amid the Covid-19 pandemic. According to The Maritime Executive, a professional shipping news portal, the Vietnam Logistics Business Association plans to first develop intra-Asia shipping operations and then expand international operations, pending the preparation of private investors to provide their respective funds. Having a fleet of container ships will reduce the “huge foreign exchange” the Vietnamese spend…
Vietnam is planning to invest US$1.5 billion to launch a nationwide container shipping business in response to a sharp rise in freight costs and supply chain disruptions amid the Covid-19 pandemic.
According to professional shipping news portal maritime executiveThe Vietnam Logistics Business Association plans to first develop the intra-Asia shipping business and then expand the international business, waiting for private investors to be ready to provide their respective funds.
Having a fleet of container ships will reduce the “huge foreign exchange” the Vietnamese government spends on shipping and limit the risk of rising freight rates, the association said, giving the country a tool for long-term economic security, the association said.
Dependence on foreign shipping companies
As of 2021, about 90% of Vietnam’s imports and exports are transported by sea, using 24 million 20-foot equivalent container units (TEU). However, the country’s current fleet handles only about 7% of it, while the rest is carried by foreign shipping lines.
Currently, there are 10 container shipping companies in Vietnam with 48 container ships with a total capacity of 39,500 TEUs, 13 of which are over 25 years old, and 15 of which have a capacity between 300 and 600 TEUs, only for domestic use operation. Only 14 of these vessels have a capacity between 1,000 and 1,800 TEU and are available to operate on intra-Asian routes.
Priority on intra-Asia routes
The creation of the national shipping company will be carried out in stages. The first phase, which will last three to five years, will cost about $1 billion for ships and another $500 million for logistics facilities. It will focus on routes to South Korea, Japan, China, India and the Middle East, which together account for about 60% of Vietnam’s imports and exports.
The second phase will not be launched for at least five years, during which time the focus will remain on Asia. Its goal is to expand the network of national shipping companies, offering international routes to the Americas, Europe and other global regions. Much depends on how successful the Vietnamese government is in mobilizing private capital investment.
The Vietnam Logistics Business Association envisages the use of post-Panamax and large container ships with a capacity of at least 4,000 TEU, and more likely between 6,000 and 11,000 TEU. The plan states that it may even require very large vessels with a capacity between 11,000 to 14,000 TEU or even 18,000 TEU.
