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DEMAND FOR CONTAINER SHIPMENTS IN VIETNAM SURGES AMID US-CHINA TRADE WAR
Friday, 26 July 2019 07:17

 

The number of container equivalents of goods shipped in and out of Vietnam annually may reach 23 million by 2025, up 64% in 2019.

 

The number of containers handled in Vietnam will be on the rise along with the ongoing US-Sino trade war, Japanese trading house Sumitomo has predicted.

 

About 14 million container equivalents of goods are shipped in and out of Vietnam annually. With a growth rate of 7%, the number is expected to reach 23 million by 2025, Nikkei quoted a Sumitomo source as saying.

Meanwhile, Vietnamese stock brokerage MBS said in a recent report that Vietnam would see more demand for logistics services thanks to an annual growth rate of 10% in exports set for the next three to five years. 

Vietnam has 1,600 ships with a total capacity of 7.8 million tons, the fourth biggest in Southeast Asia, VnExpress quoted MBS report.

Vietnamese experts said basing on “Liner Shipping 2025: How to survive and thrive” by Lars Jensen that container shipping will create a revolution in the logistic sector thanks to its pre-eminence over other kinds of transportation globally and in Vietnam, the Voice of Vietnam (VOV) has reported.

In the next six years, the marine shipping will change dramatically from what it has traditionally been run and thousands of Vietnamese container and logistics firms will suffer substantial impacts. It requires them to join hands to pilot digitalized measures based on practical demands and operations of the market.

Managing Director of Marine Connections Vietnam JSC Nguyen Xuan Vinh said sea transportation will continue its momentum as well as see fierce competition of large shipping firms in the world. For that reason, they have to build larger ships which can load up more goods to reduce costs.

 

Japanese firms join the market

To take advantage of Vietnam’s logistics market, Sumitomo has invested US$37 million in a major port operator in Vietnam, aiming to seize growing demand for logistics services as manufacturers shift production to the Southeast Asian country amid the yearlong US-China trade war.

SSJ Consulting Vietnam Llc, a company in which Sumitomo Corp owns a 51% stake, has acquired a 10% stake in Gemadept Corp.

Currently, Sumitomo operates three industrial parks near Hanoi and owns a logistics company in the country. 

Sumitomo is among the growing ranks of companies eager to cash in on the production shift away from China triggered by the trade war, Nikkei reported, adding that the Japanese firm plans to build a logistics network connecting plants to ports for seamless export of locally produced goods.

Gemadept owns six ports in Vietnam, handling 1.7 million containers for an over 10% market share. In 2018, its ports handled 524.7 million tons of goods, up 19% from 2017, according to the Vietnam Maritime Administration.

The tie-up will undertake shipment for factories, logistics facilities, and ports under Sumitomo’s management, enabling the company to work for more efficiency and cost reduction. 

To facilitate the shipment, Sumitomo will develop a smartphone app that will enable truck drivers to reserve loading processes at ports and electronically handle other paperwork.

To save cost, Sumitomo plans to use expertise in Vietnam by shortening waiting time of a cargo to be loaded onto ships which currently takes one to two hours at Haiphong port, the facility about 150 km away from Hanoi.

Tracking the movements of trucks will allow cargo to be loaded both ways. If all trucks carry cargo on both ways for the trip between Hanoi and Haiphong, it would result in annual savings of US$18 million, Sumitomo estimates.

Increased exports have also boosted demand for cardboard boxes, which are used to ship electronics and apparel products. Goods shipped in cardboard boxes account for 60% of total exports out of Vietnam in monetary terms. 

Another Japanese trading house, Marubeni, is building a cardboard box plant outside Ho Chi Minh City at a cost of US$110 million which is expected to come operational in 2020. The plant will have an annual capacity of 350,000 tons and will help Marubeni’s quest for top market share in the country.

 
ONE TAKES DELIVERY OF 7TH CONTAINERSHIP IN A SERIES OF 14,000-TEU NEWBUILDS
Tuesday, 23 July 2019 04:47

ONTAINER shipping alliance Ocean Network Express (ONE), formed by Japanese carriers MOL, NYK and "K" Line, has received the 14,000-TEU vessel 'ONE Cygnus'. It is the last box ship in a series of seven newbuilds that have been delivered since June 2018.

The ship is equipped with safety and environmentally-friendly capabilities, such as structural arrest technology and highly efficient welding functionalities. Its hull form is designed to optimise cargo-loading efficiency by minimising engine room space.

It also has excellent structural safety due to its "crack arrest technology" and is equipped with "dual rating system" technology in its main diesel engine, which allows for operational flexibility and a significant reduction in carbon dioxide emissions, reported London's Port Technology.

The containership's navigation bridge uses the Integrated Navigation System (INS), which consolidates the functions of vessel systems to efficiently cut the workload of operators.

The newbuild will be deployed on the Asia to Europe (FE3) service under THE Alliance, of which ONE is a member. The port rotation is: Hong Kong, Xiamen, Kaohsiung, Shenzhen-Yantian, Rotterdam, Hamburg, Antwerp, Le Havre, London Gateway, Singapore and back to Hong Kong.

 
VIETNAM LOGISTICS MARKET LIKELY TO HIT US$87 BILLION IN 2022
Friday, 19 July 2019 10:44

The development will be backed by increasing industrial activities, growing e-commerce, and stronger investment in logistics infrastructure.

 

Vietnam logistics and warehousing market is likely to reach US$86.7 billion by 2022 thanks to expanding industrial activities, growing e-commerce industry, continuous investment in infrastructure and logistics facilities, and consistent economic growth.

 

The logistics and warehousing market is expected to register a positive compound annual growth rate (CAGR) of 13.3% in the 2018-2022 period, according to Ken Research – a market research and consulting company based in India and the US.

Vietnam’s logistics sector is expected to escalate its way thanks to the following reasons. 

First of all, a good connection amongst the urban cities where a huge share of traffic is coming from the tier 2 and tier 3 cities. 

Modern technologies like enterprise resource planning, electronic data interchange, customs and accounting software, GPS, bar code system, radio frequency identification (RFID), automatic retrieval system, robotics, drones, among others are anticipated to improve the logistics services in near future. 

Macroeconomics has supported the sector’s growth with various free trade agreements (FTAs) signed between Vietnam and single economies or economic blocs which will boost the country’s trade relations in the long term.

Additionally, foreign investments are estimated to rise strongly in Vietnam as many logistics enterprises in ASEAN countries are keen to invest and have a better understanding of the laws, customs and culture of Vietnam. 

The country will focus on attracting investment in logistics infrastructure development, constructing regional and international logistics service centers, improving the efficiency of connection between Vietnam and other countries, thereby becoming a modern logistics hub in upcoming years, Ken Research said.

An overview on Vietnam’s logistics sector

Vietnam’s logistics and warehousing sector provides mix services including freight forwarding, warehousing, cold chain, express delivery, e-commerce logistics, and third party logistics for end users like foods and beverages, engineering equipment, retail, electronic devices, textile and footwear, wooden products and others in Red River Delta, Da Nang, Ho Chi Minh City, and other regions.

Vietnam’s freight forwarding market covers both normal and express delivery with freight movement like sea freight, road freight, air freight, and rail freight participated by international and domestic freight forwarding in flow corridors namely Asian Countries, European Countries, America and African Countries. 

Vietnam’s express market is formed by international and domestic express by air and ground express, and by market structure like B2C, B2B and B2C.

Meanwhile, Vietnam e-commerce market is formed by speed of delivery with two-day delivery, one-day delivery, same day delivery, within 2 hours, and others; by area of delivery such as intercity, and same region; and by payment method like cash on delivery and others.

Major players include DHL Express Vietnam, FedEx Vietnam, GHN, Damco Vietnam, Sotrans Vietnam, Vinafco, Kerry Logistics Vietnam, Bac Ky Logistics Vietnam, Nippon Express Vietnam, Vietnam Airlines, Transimex Saigon Corporation, Sea and Air Freight International, Vinalink Logistics, PetroVietnam Transport Corporation, Noi Bai Cargo Terminal Services, and others.
 
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