An official from Vietnam National Shipping Lines (Vinalines), the country’s largest shipping firm, has proposed setting up a union of local shipping firms to expand their market share and expand their overseas operation.
Deputy General Director Bui Viet Hoai made the proposal in the context that local shipping companies are facing fierce competition from foreign partners, according to Vietnam News Brief Service
Agreeing with Hoai, Do Xuan Quynh, secretary general of the Vietnam Ship Owner’s Association said that local carriers should cooperate to provide better transportation services.
Vietnam started using local carriers for domestic routes instead of foreign ones a year ago but container transportation by local firms increased just eight to 10 percent from April 1, 2013.
Foreign firms hold 80 to 85 percent of the Vietnamese container transportation market, with all routes from Vietnam to Europe and America, while domestic companies hold the remaining portion and only operate on domestic routes and those linking Vietnam to China, said Vietnam Maritime Administration (Vinamarine).
Many Vietnamese shippers are facing difficulties, some on the edge of bankruptcy. Up to 80 percent of these companies’ working capital comes from loans. The price of fuel has increased but competition has become fiercer so they are unable to charge higher price.
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