Technical Report No. 8 PORT AND SHIPPING

I-5-3
Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports
accurate estimation of the required containerization, since, at present, almost all
general cargoes are being containerized for safety and efficiency. Despite the impact
of the economic crisis on Asian economies, container traffic to and from other parts
of Asia will increase more rapidly than the world average. It was also reported that the
most rapid container traffic increase is expected in west and south Asia, where
container revolution is still in its infancy. This gives Vietnam a great potential to
increase its container traffic in the coming years. In fact, Vietnam has handled a total
of 820,190 TEU container cargoes in 1998, with an average growth rate of 37% from
1991 to 1998. In the past three years alone, it has recorded an average of 15%
growth rate a year. Based on a comprehensive study and survey of demand patterns
by the VITRANSS Study Team for the long-term strategy (2020) and the mediumterm
Master Plan (2010), the projected containerization is as follows:
Domestic Shipping
Table 5.2.1
Projected Containerization in Vietnam
Year High Assumption
2010 3,404,000 TEU
2020 7,004,000 TEU
There is no distinct service jurisdiction between major state-owned shipping lines
and the private sector. This makes the authorized state-owned shipping lines
enjoy the dominant share in the transport of domestic cargoes on their oceangoing
vessels. It may be an acceptable arrangement for the meantime to protect
its own flag vessels. But in the coming years, opportunities for major
consignments should be given to both state-owned and private operators, thus
liberalizing the shipping industry to encourage its continuous development and
upgrading of services.
Domestic shipping services will be upgraded through the (1) assignment of
medium-size vessels (3,000-5,000 DWT), (2) promotion of containerization and
specialization; and (3) provision of economical and reliable operations with good
intermodal connection.
Ship Finance
Except for some dominant state shipping and JV companies with foreign carriers,
almost all shipping operators have difficulty securing financial loans to fund their
fleet expansion plans. The Ministry of Finance (MOF) is planning to establish a
State Financial Investment Company (SFICO) and is submitting its project
proposal to government. The SFCIO is expected to be an intermediary financial
body between government and shipping companies and will be authorized to
carry out direct investments, at the same time it will be responsible to
government for capital investments in the industry.