The outlook for Vietnam’s seaport industry may be brighter in the near future thanks to strong FDI disbursement and some trade agreements entering into force, according to VNDirect Securities.
The global seaport and shipping industry will face many difficulties in 2023 due to the economic downturn, which negatively affects trade activities and sea freight volume, said the leading Vietnamese broker in a new report.
Oversupply will put pressure on sea freight rates in the near future. As time charter contracts are usually signed for 6-12 months, rate reductions will clearly affect the business results of Vietnamese shipping lines in the 2023-2024 period, the report notes.
“However, there are still some factors that positively support the industry’s outlook in 2023 like the fixing of container shortage and China’s reopening, which will boost global trade and consumption.”
The average Brent oil price is forecast to remain at around $90 per barrel next year, helping reduce fuel costs for shipping businesses and promote global trade.
The Regional Comprehensive Economic Partnership (RCEP), which came into force in early 2022, helped some Vietnamese manufacturing industries achieve strong growth in the first half of the year. However, their growth slowed in the second half due to a decline in global consumption.
“Trade agreements like RCEP will have positive impacts on Vietnam’s import and export activities in the coming years when global consumption recovers, thereby benefiting its seaport industry,” the broker noted.
The broker expects Vietnam’s container port throughput to grow at a rate of about 8.6% in 2022-2030, with reduced oversupply in the northern city of Hai Phong’s port clusters and the upgrading of Cai Mep-Thi Vai equivalents in the southern province of Ba Ria-Vung Tau.
In 2023-2024, a number of port expansion projects will be implemented and put into operation, including Nam Dinh Vu phase 2 and Gemalink phase 2 of Gemadept JSC (GMD), and Hai Phong Port JSC’s deep water port, it added.
Vietnam operates nearly 300 seaports with a total length of 103 kilometers at present, 4.7 times higher than the number in 2000.
The country has established international gateway seaports. In the northern region, Hai Phong city’s Lach Huyen port can receive container ships of up to 132,000 DWT, while Cai Mep port in the southern region can host ships of up to 214,000 DWT.
According to the Vietnam Maritime Administration (Vinamarine), Vietnamese seaports handled 608.3 million tons of goods in the first 10 months of the year, up 3% year-on-year.