The article includes: The total volume of container and crude oil, passing through ports in Vietnam compared to some neighboring large ports.
With the current economic and political situation, when comparing data on the amount of goods and oil circulating through ports in South Asia and Southeast Asia in recent years, we find that the shipping industry Vietnam's shipping industry has high growth potential in the coming years.
Total container traffic through Vietnamese ports in the last 5 months of 2023 is about 10% higher than in 2022. Container traffic in the period 2016 to 2022 increased by 93%. Since 2019, Vietnam has surpassed Hong Kong, becoming the third country with the largest total volume of container traffic in the region, behind Singapore and Malaysia. Regarding petroleum products, Vietnam's crude oil flow remains at a fairly modest level, only increasing by about 38% in 8 years, the lowest among the 3 countries (including Singapore and India). However, according to our assessment, the reason comes from a positive factor for the economy that is that Vietnam has been proactive in filtering and processing crude oil. Before Dung Quat 1 oil refinery went into operation in 2016, Vietnam had to export crude oil and import petroleum products of all kinds, leading to a situation of selling low and buying high, causing a trade balance deficit. commercial.
Source: Vinamarine
Source: Vinamarine, Annual review of Singapore shipping association, Statista
Source: ceicdata, Vinamarine
Sea freight rates
Vietnam container shipping rates range from $100 - $2,500 depending on the distance of the transport route.
Full container load shipping charges (Full container load)
TRANSPORTATION LINE | COMMODITIES | FREIGHT FREIGHT (USD/CONTAINER) |
Vietnam – U.S.A | Dry/cold goods | 1.500 – 2.500 |
Vietnam – Europe | Dry/cold goods | 800 - 1.200 |
Vietnam – Japan | Dry/cold goods | 300 – 820 |
Vietnam, Korea | Dry/cold goods | 150 - 600 |
Vietnam, China | Dry/cold goods | 150 - 500 |
Vietnam – Southeast Asia | Dry/cold goods | 100 – 500 |
According to SSI forecast, the oil tanker companies continue to benefit from the high freight rate environment, but the pace of profit growth is expected to decrease by around 10-15% compared to previous forecasts. It is predicted that the oil tanker freight rates will not continue to rise unless there are ongoing geopolitical tensions. The prospects for oil tankers are very optimistic due to the balance between supply and demand showing positive trends from 2023 - but there are currently some limitations as well. In terms of demand, the demand for ton-miles continues to be higher due to conflicts between Russia and Ukraine, and the United States emerging as a prominent oil exporting country to both the European Union and Asia. (Source: https://www.ssi.com.vn/).
The increasing length of trade routes is leading to the utilization of more capacity, as it now takes more days to transport oil. On the supply side, profit improvement is not yet a motivation to increase the number of newly constructed ships. Among the types of ships involved in oil transportation by sea, Very Large Crude Carriers (VLCCs) have the most limited growth. New orders for VLCCs currently only account for about 2% of the existing fleet. Additionally, the process of scrapping old ships may be slowed down due to the current strong market conditions.
Proportion of New Oil Tanker Orders
Source: Clarkson, J.P. Morgan
Source: Clarksons, Deustche Bank
New ship delivery progress (in million DWT) in 2023 reaches 85% of total orders - equivalent to 22 million DWT. The number of orders for new ships delivered in 2024 will increase by about 31%, equivalent to 34 million DWT. The number of new fleets from the beginning of 2024 is expected to increase by about 10.4% in both 2024 and in the following years, 5.9% and 3.0% respectively.
The Ministry of Transport of Vietnam has approved and issued Circular 39/2023/TT-BGTVT regulating new tariffs for container handling at seaports and other services for all seaports in Vietnam. This move has been eagerly anticipated by all businesses and investors in the industry for a long time, aiming to increase floor prices for container handling services by about 10% for both transshipment ports and deep-water ports compared to Circular 54/2018/TT-BGTVT, which took effect on February 15, 2024. This will also be a supportive factor for the industry, especially for seaports with high operational capacity and located in less competitive positions (such as deep-water ports like Lach Huyen and Cai Mep).
From geopolitical factors, amendments to freight pricing regulations have facilitated freight rates for the domestic shipping industry. With signs of growth in quantity and new shipbuilding orders, we assess that the domestic shipping industry has a lot of growth potential in the coming years.
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