Looking ahead, Vietnam’s shipping companies will have to struggle amidst fierce competition with experienced, well-funded global players as they duke it out for dwindling orders, according to local news reports.
Statistics from the Viet Nam Maritime Administration (VMA) indicate that as of June 31, 2013, Vietnam has a fleet of 1,788 vessels, 577 ship owners (33 state-owned and 544 private), 49 seaports and 300 wharves, said a report from Vietnamnet.
However, Vietnamese firms hold only 15 percent of the market share, leaving foreign shipping line operators with as much as 85 percent of the domestic market and 100 percent of orders to the United States and Europe.
The shorter order list, which is expected to further contract in 2014-2016, and higher operating costs add more pressure to domestic shippers.
But rather than work together for further development, Vietnamese shipping firms have chosen to undercut prices to win service contracts. As a result, many are deep into debt and have been forced to sell off some vessels to cover business costs.
Moreover, as domestic shipping firms compete against each other, global shipping lines have been gradually integrating into Vietnam’s shipping market and dominating it.
The VMA suggests that the government implement administrative reforms in the shipping industry in line with national laws and international conventions.
Vietnam reportedly has joined 22 international conventions, treaties and protocols, and signed 22 bilateral maritime pacts with many countries.
Photo: Bruce Tuten