Vietnam has more than 1,600 ships, but a mere 3.3% of them are container ships, according to a report of the Vietnam Maritime Administration at a meeting on raising the market share of sea transport on December 11.
Vietnam has more than 1,600 ships, with a mere 3.3% of them being container ships
The administration said Vietnam’s fleet of ships faces several problems such as a small proportion of container ships, and up to 40% of them are 15 years old or older. In addition, there are as many as 500 owners of ships, meaning their scales are small and thus their competitiveness is low.
Meanwhile, at issue are several other setbacks such as unstable sources of goods, high fuel costs, rising operation costs, and low fares, which have all made life more difficult for ship owners.
Transport Minister Nguyen Van The said at the meeting that new policies are badly needed to lure private investors to develop the sector by reforming fleets and relevant transport services.
The minister asked the Vietnam Maritime Administration and relevant agencies to come up with incentive policies so that companies can tap preferential credits and tax incentives to develop their fleets, as well as reduce their incurring costs.
Statistics of the Transport Ministry show the rate of empty containers on the way back is as high as 60% to 70%, or even 100% for routes of less than 300 kilometers, which make shipping costs higher.
Inefficient connectivity between transport modes has also led to an increase in logistics costs, according to the meeting.
Data of the Asian Development Bank shows logistics costs in some ASEAN countries account for 10% to 15% of gross domestic product (GDP) growth while the cost in Vietnam makes up more than 20%.
That transport and service costs are exorbitant has become one of the factors which reduces the competitiveness of local companies.