Vietnam: Fierce competition in shipping industry predicted for 2019
Total goods exchange output will increase rapidly, bringing opportunities to Vietnam’s shipping firms, experts said at a seminar on container maritime transport, held on the occasion of the launch of a book on maritime transport in Vietnam by leading expert Lars Jensen.
Vu Dang Duong, chief of the team of translators of the book, said the difficulties faced by big and small shipping firms kicked off an M&A movement. The decision by shipping lines to consolidate alliances was a way for them to cope with uncertainties in the near future.
More M&A deals will be made in the time to come, but the M&A wave is entering the final stage and there will not be big deals. Shipping lines will intensify the use of high technology to cut costs and the labor force.
Jensen believes that marine transport will see big changes in the way it is operating.
Dung said the changes will affect Vietnam’s shipping industry and container port exploiters in key economic zones, as well as over 3,000 logistics firms.
Nguyen Xuan Vinh, CEO of Maritime Connections, believes that in 2019 and upcoming years, marine container transport will continue to develop, creating cutthroat competition among large shipping firms in the world.
Shipping firms will have to build large ships to be able to carry more goods, which will help cut costs.
Analysts think the US-China trade war will benefit enterprises which export products from Vietnam to the US. Foreign direct investment into China will be redirected to Vietnam and neighboring countries.
If so, Vietnam will need to import more materials to make products for export and the demand for container maritime transport will increase.
The attendees at the seminar expressed concern about problems in Vietnam’s shipping,
saying that the lack of cooperation among shipping firms still had not improved.
Cooperation agreements between Hai An Group and Tan Cang Shipping, and between Vinalines and Bien Dong, have been made. However, the link among Vietnamese firms is loose compared with M&A activities among Japanese, South Korean and Chinese firms.
While some experts warned of problems to arise if Vietnamese shipping firms cooperate with foreign partners, Duong believes that it should be encouraged.
He cited success stories about the cooperation between Vietnamese and foreign enterprises. Tan Cang Cai Mep international port was one example.
The Vietnam Logistics Association (VLA) says that logistics costs in Vietnam are 16-17 percent of GDP, while some international institutions say the figure is 20.9 percent.