Annually, Vietnam spends around US$8-10 billion on logistics of which maritime transport costs account for nearly 60 percent. However, this falls into the pockets of foreign shipping companies. What is the reason for that?

Poor development

Currently, the global logistics market is developing by leaps and bounds with the volume of containers increasing from 36 million TEU (1 TEU is equivalent to 1/20 foot container) to 244 million TEU and this figure is predicted to reach 620 million TEU by 2015. Over the past seven years (1993-2000) the number of container ships in Vietnam has also increased from 12 with a total capacity of 52,613 TEU to 236 with a total capacity of 1.1 million TEU. In the next two years, the figure is likely to amount to more than 400 with a total capacity of over 2 million TEU. Vice Chairman of the Vietnam Sea Port Association Nguyen Thu said that the world’s sea ports will be expand and modernize in the next ten years to enable them to carry “super post panamax” container ships which are 400 meters long, capable of carrying 14,500 TEU (Currently, biggest containership has a tonnage of less than 10,000 TEU).

Furthermore, the current division of the maritime transport services market in Southeast Asia is crucial as the region server as a hub for transporting cargos from Europe to America and vice versa. Seizing this opportunity, Singapore and Hong Kong have spared no efforts in becoming the world’ biggest maritime transport centres in a very short period of time. Meanwhile, some other seaports in the region are trying their best to win a bigger share of the pie.

Until now, Vietnam has been gradually building deep-water ports to serve international transportation. However, this work should have been done 5 to 10 years ago.

Ho Kim Lan, general secretary of the Vietnam Seaports Association said that despite the Government’s efforts to develop seaports, there has been a lack of comprehensive development plans and national and local ports have developed spontaneously. For example, Van Phong Bay is considered the best place for the country to build a deep-water port, as it can receive ships over 100,000DWT (super post panamax). The bay which became an international transit port in 2003 now applies the latest technology called “ship to ship” for petrol tankers.

Lack of co-operation

Another difficulty facing the maritime industry is lack of capital. Most logistical services businesses are short of capital and some businesses only have a registered capital of US$18,750-31,250. Meanwhile to win different kinds of transport contracts, businesses must have mortgages worth US$120,000. However, the problem can be resolved by strengthening co-operation among businesses. If they coordinate with each other and join associations, capital-related issues can be resolved. Methods used by domestic import-export businesses can also be changed to recoup the money lost to foreign transport businesses. However, in fact, businesses have refused to co-operate with each other and even sought to eliminate each other by unhealthy competition. This helps foreign companies gain more profit from the domestic market.