2012-06-29 09:41:34 - Fast Market Research recommends "Vietnam Shipping Report Q3 2012" from Business Monitor International, now available
Softer domestic demand has been primarily blamed for the fact that Vietnam's real GDP growth rate slowed to 4.0% year-on-year (y-o-y) in Q112, down from 6.1% in the previous quarter and marking the worst quarterly outturn since the height of the global recession in Q109. This is due to tighter money and credit conditions, which are beginning to take their toll on consumer and business activity. However, the port of Ho Chi Minh is set to enjoy healthy growth over the mid term in terms of tonnage throughput, while the Port of Da Nang will record relatively impressive box throughput.
Over the past decade, Vietnam has made its name as the 'factory of Asia' - a reputation based on its booming
exports, which have buoyed the shipping sector as a result. Exports are, however, set to be adversely affected by the predicted hard landing in China this year, as well as a weak eurozone. A bleak macroeconomic picture means that Vietnam's main export partners - the US, China and Japan - are all set to suffer slowdowns during 2012, which may also detrimentally affect the country.
Full Report Details at
Headline Industry Data
* 2012 tonnage throughput at the Port of Ho Chi Minh City is forecast to grow 7.96% to 36.11mn tonnes.
* 2012 tonnage throughput at the Port of Da Nang is forecast to increase 3.08% to 3.50mn tonnes.
* 2012 container throughput at the Port of Ho Chi Minh City is forecast to grow 4.78% to 3.12mn twenty-foot equivalent units (TEUs).
* 2012 container throughput at the Port of Da Nang is forecast to increase 7.60% to 102.78mn TEUs.
Key Industry Trends
Cai Mep-Thi Vai Ports Underused, Despite US$7bn Investment
Ports in the Cai Mep-Thi Vai region of the Vietnamese province of Ba Ria-Vung Tau have been struggling to attract vessels. According to the Vietnam Port Association (VPA), the ports have a total container handling capacity of as much as 8mn twenty-foot equivalent units (TEUs); however, the actual demand only comes to around 5mn TEUs. This is despite a total investment of over US$7bn by the end of 2011.
China Issues South China Sea Warning
The Chinese government issued a warning to foreign shipping companies operating in the South China Sea in April 2012. Tensions rose following an incident which saw the Philippine navy frigate Gregorio del Pilar involved in a stand-off with two Chinese surveillance vessels after it had intercepted Chinese fishing vessels traversing the region.
Container Rate Rises Impact Vietnam's Clothing Exporters
Vietnamese exporters of garments and textiles have reportedly been hit by container rate rises being implemented by major sea carriers. In March 2012, Germany-based Hapag-Lloyd raised its rates from Vietnam to the US by US$600, while Hong Kong-based operator OOCL raised its rates to Europe by the same amount. Others, including Danish sea carrier Maersk Line, have raised rates by up to US$1,000.
Key Risks To Outlook
In terms of risks to the downside, 2012 could prove to be a difficult year for Vietnamese shippers due to oversupply of vessel tonnage as well as expected rate hikes for imports and exports.
A March 2012 report by VietNamNet Bridge explained that various shipping lines plan to up their rates from the current rate of US$700 per TEU to around US$1,400 per TEU. However, Vietnam Ship Owners' Association chairman Do Xuan Quynh moved to assuage any fears, saying that the planned rate hikes would not result in any great change.
Additionally, increases in container shipping fees are creating difficulties for Vietnamese exporters, according to a report in Vietnam News. Several overseas shipping lines, including CMA, Hapag Lloyd, Maersk Line, NYK and OOCL, have raised their rates for routes between Vietnam and a variety of other countries. Exporters are affected because many exports are charged under cost and freight delivery conditions, meaning that it is the sellers who bear the transportation costs.
Further, any drop off in Chinese demand would have negative connotations for the Vietnamese shipping and ports sector. If Chinese economic growth slows, as we believe it will, volumes on intra-Asian routes will be hit. Given the fact that the region was flooded with interest from international lines and terminal operators in the wake of the global economic crisis, this is a cause for concern.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.