Home » Breaking News, Maritime » New law prioritizes Vietnam shipping lines for local routes

As the new law temporarily barring foreign ships from operating on local routes nears enforcement, doubts have sprung about the capability of Vietnam’s domestic shipping fleet to replace foreign players on domestic lanes, according to a report on the Vietnam Seaports Association’s website.

In June this year, Vietnam’s Ministry of Transport (MoT) enacted Document 5063/BGTVT-VT to temporarily restrict the local movements of some ships carrying foreign flags in a bid to tackle capacity redundancy in the domestic shipping industry.

The temporary restriction takes effect from January 1, 2013, when the granting of licenses valid for three or six months to ships that are under foreign flags and that transport containers on local routes will be suspended.

These foreign ships, which number around 20, currently ferry about 3,000 standard containers on local slings each week.

The transport ministry’s decision is seen to boost the local shipping fleet and allow it to regain domestic market share, according to Vietnam News.

The Vietnamese box ships will take over national routes that include those from Cai Lan port in the north to Saigon ports and Cai Mep-Thi Vai ports in the Ba Ria-Vung Tau province.

When global shipping was at its peak, local lines chose to run on international routes. To fill the void in the home market, state agencies gave the green light to foreign ships to serve the local market. But with international shipping in the doldrums, local ships have been returning to Vietnam.

Industry experts say, however, that local container vessels would not find  the domestic routes easy to conquer. Many foreign rivals offer competitive rates and have better equipment.

In addition, few local ships are reportedly willing to call on separate ports just to pick up small container volumes the way foreign ships do.

There are also concerns that granting priority status to local vessels will promote monopoly and affect service quality.

 

Photo: darinmarshall

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