Welcome to INTERNET BULL REPORT   Click to listen highlighted text! Welcome to INTERNET BULL REPORT

Vietnam: The Shipping Bridge Between Nations


With over 320 ports in the country, Vietnam handles approximately 200 million tons of cargo per year. This makes it one of the largest shipping hubs in South East Asia.

Vietnam, a country that has a coastline of over 3,260 km, borders several major bodies of water including the South China Sea, Gulf of Thailand, and Gulf of Tonkin.

With its growing economy averaging a GDP growth rate of 6.7% since 2015, Vietnam looks to double its cargo capacity by 2030 with new ports, and logistical networks.

One of the Busiest Coasts in Vietnam

Recent investments from foreign businesses have started shifting global supply chain logistics in South East Asia to Vietnam.

With growing demand for logistical shipping through Vietnam, the country has faced several challenges from its numerous ports for the past few years.

Since there are only a few deep water ports in Vietnam, 80 % of all container exports and imports must go through smaller ports before it can be shipped internationally.

This method of logistics increases costs and has caused several firms to lose a combined $2.4 billion USD each year. Additionally, many major ports in Vietnam are under-utilized due to the close proximity of smaller ports throughout the country – adding another pain point.


Recent Investments Have Created Rapid Growth in Cities

To challenge these logistical inefficiencies, the government has spent a considerable amount to research and plan upgrades on existing ports, and building of new ports.

Throughout the past five years, Vietnam has been upgrading all the major ports within the country. The government has focused on creating deep-water capabilities for ports that didn’t have it before.

New logistical networks have also been implemented to focus traffic on all the major hubs throughout the nation separating local shipments from international shipments. This has helped increase the quality of port infrastructure throughout the country climbing from a mere 38.71% in 2006 to 54.29% in 2019.

Vietnam’s prime location gives it easy shipping access to countries in South Asia, East Asia, and North America.

The government has invested in building new ports to increase its quality and efficiency.

Learning from past mistakes, the government has begun conducting numerous logistical research to determine the best location for each port that can target specific international shipping routes.

Vietnam’s Coastline Gives it Access to Different Countries in the World

With government funding and support, shipping logistics in Vietnam will see a great boom in the next decade. With growing investments and increased international logistical networks, investors are positive about the future economics of Vietnam.

Vinalines, one of the largest logistic companies in Vietnam has benefitted from government spending on infrastructure. Reporting over $518 million in revenue for 2019, a growth of 6% since 2018, the company is looking to expand its investments throughout South-East Asia.

With the development of new deep-water ports throughout Vietnam, Vinalines has acquired 15 new ships of up to 8000 teu. Each ship is capable of holding approximately 76,000 tonnes of cargo. In 2019, Vinalines shipped over 106 million tonnes of shipment, the investment of larger ships will increase Vinalines shipping capacity and business.

These investments and projects will boost Vinaline’s assets and revenue.


The New Ships Will Increase Vinalines Capacity

Government expenditure has contributed to Vinalines growth through the creation of new ports and routes. The development of a new route on June 2nd 2020 for the Quy Nhon Port in South-Central Vietnam, is predicted to increase growth in the area.

Vinalines was granted a management role over the port which recently started new logistical routes to remote areas domestically, and routes to Northeast Asia.

Quy Nhon Port has seen a steady increase in cargo each year with revenue growing 18% for the first quarter of 2020.


New Logistic Routes in Quy Nhon Port Will Help the Region See Growth

Vietnam will continue to see a growth in its shipping logistics industry. Its geographic location makes it a gateway from South-East Asia into East Asia, South Asia, and North America.

With growing imports and exports, Vietnam’s 320 ports will see an increase in cargo each year.

Continuous government support and funding will aid with upgrades to existing ports, building of new ports, and creation of new logistical networks.

This will ultimately make Vietnam one of the largest shipping hubs in Asia and a thriving environment for new companies.

Andrew Chu

Andrew is a third year student pursuing Cognition in Computing Systems at the University of British Columbia. Trading from a young age has sparked his interest in searching for value in the financial markets. Working at the largest private equity firm in Taipei, he conducted many industrial research including telecommunication, semiconductor, and aviation in Asia. With his experiences, he looks to explore how the future of computer systems can add value into finance.

Click to listen highlighted text!