Vietnam plans to create national shipping line

Vietnam is planning the launch of a national container shipping operation at an investment of $1.5 billion as the country seeks to counter the dramatic rise in freight costs and supply chain disruptions experienced during the Covid-19 pandemic.

According to specialised shipping news portal The Maritime Executive, which referred to the Vietnam Logistics Business Association, plans are to develop intra-Asian shipping operations in a first step and later expand with international operations, pending the readiness of private investors to provide respective capital.

Having a fleet of container ships would reduce the “huge amount of foreign currency” spent by the Vietnamese government on shipping, as well as limit the exposure to freight rate increases and provide a tool for long-term economic security for the country, the association said.

Dependence of foreign shipping companies

About 90 per cent of Vietnam’s import and export volume is transported by sea, using 24 million twenty-foot equivalent container units (TEU) as per 2021. However, the country’s current fleet is only handling about seven per cent of this volume, while the rest is transported by foreign shipping lines.

Currently, Vietnam has ten container shipping companies owning 48 containerships with a total capacity of 39,500 TEU, whereby 13 of the vessels are over 25 years old and 15 of the vessels have a capacity of just between 300 and 600 TEU suited only for domestic operations. Only 14 of the ships have a capacity of between 1,000 and 1,800 TEU and can be used to run on intra-Asia routes.

Intra-Asian routes first

The creation of a national shipping line would be done in phases. The first phase would last three to five years and require approximately $1 billion for ships and $500 million more for logistics facilities. It would focus on routes to South Korea, Japan, China, India and the Middle East, countries and a region which together account for about 60 per cent of the Vietnam’s import-export volume.

The second phase would not be launched for at least five years during which the focus would remain on Asia. It aims at expanding the national shipping lines’ network with international routes to the Americas, Europe and other global regions. It would much depend on how successful Vietnam’s government will be in mobilising private capital for investments.

The Vietnam Logistics Business Association envisions employing post-Panamax and large container ships with a capacity of at least 4,000 TEU and more likely between 6,000 and 11,000 TEU. The plan notes that it might even require ultra-large vessels with a capacity between 11,000 and 14,000 TEU or even 18,000 TEU.



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Vietnam is planning the launch of a national container shipping operation at an investment of $1.5 billion as the country seeks to counter the dramatic rise in freight costs and supply chain disruptions experienced during the Covid-19 pandemic. According to specialised shipping news portal The Maritime Executive, which referred to the Vietnam Logistics Business Association, plans are to develop intra-Asian shipping operations in a first step and later expand with international operations, pending the readiness of private investors to provide respective capital. Having a fleet of container ships would reduce the “huge amount of foreign currency” spent by the Vietnamese...

Vietnam is planning the launch of a national container shipping operation at an investment of $1.5 billion as the country seeks to counter the dramatic rise in freight costs and supply chain disruptions experienced during the Covid-19 pandemic.

According to specialised shipping news portal The Maritime Executive, which referred to the Vietnam Logistics Business Association, plans are to develop intra-Asian shipping operations in a first step and later expand with international operations, pending the readiness of private investors to provide respective capital.

Having a fleet of container ships would reduce the “huge amount of foreign currency” spent by the Vietnamese government on shipping, as well as limit the exposure to freight rate increases and provide a tool for long-term economic security for the country, the association said.

Dependence of foreign shipping companies

About 90 per cent of Vietnam’s import and export volume is transported by sea, using 24 million twenty-foot equivalent container units (TEU) as per 2021. However, the country’s current fleet is only handling about seven per cent of this volume, while the rest is transported by foreign shipping lines.

Currently, Vietnam has ten container shipping companies owning 48 containerships with a total capacity of 39,500 TEU, whereby 13 of the vessels are over 25 years old and 15 of the vessels have a capacity of just between 300 and 600 TEU suited only for domestic operations. Only 14 of the ships have a capacity of between 1,000 and 1,800 TEU and can be used to run on intra-Asia routes.

Intra-Asian routes first

The creation of a national shipping line would be done in phases. The first phase would last three to five years and require approximately $1 billion for ships and $500 million more for logistics facilities. It would focus on routes to South Korea, Japan, China, India and the Middle East, countries and a region which together account for about 60 per cent of the Vietnam’s import-export volume.

The second phase would not be launched for at least five years during which the focus would remain on Asia. It aims at expanding the national shipping lines’ network with international routes to the Americas, Europe and other global regions. It would much depend on how successful Vietnam’s government will be in mobilising private capital for investments.

The Vietnam Logistics Business Association envisions employing post-Panamax and large container ships with a capacity of at least 4,000 TEU and more likely between 6,000 and 11,000 TEU. The plan notes that it might even require ultra-large vessels with a capacity between 11,000 and 14,000 TEU or even 18,000 TEU.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

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