Data from the General Statistics Office said that in the first 9 months of 2022, Vietnam’s sea freight transport reached more than 77.8 million tons, up about 27.5% over the same period in 2021.
In the third quarter, PetroVietnam Transportation Corporation (PVTrans - PVT) recorded an after-tax profit of nearly 390 billion VND, an increase of more than 2.5 times compared to the same period in 2021. After 9 months, this business made a profit before tax of more than 1,035 billion VND, exceeding 72% of the year plan.
Hai An Transport and Stevedoring Joint Stock Company (HAH) also saw profit after tax increase by more than 2.7 times compared to the same period in 2021, reaching 270 billion VND. This business made a profit of 1.5 times the whole year plan after 9 months.
Another big name in the shipping industry, Gemadept Corporation (GMD), also had favorable business results. Third quarter profit increased by more than 76% to nearly 290 billion VND. After 9 months, GMD is about 6% away from the target profit after tax, an increase of almost 84% compared to the same period last year.
Although the third quarter's profit was down, Vietnam Ocean Shipping Joint Stock Company (Vosco - VOS) still had 9 months' accumulated pre-tax profit, exceeding 45% compared to the 2022 annual plan. VOS's three-quarter pre-tax profit increased by more than 38% to VND566 billion. The company has covered all accumulated losses, while at the beginning of the year, this amount was more than 420 billion VND.
Similarly, Vietnam Maritime Corporation (Vinalines - MVN) recorded a decrease in third-quarter profit. Still, their profit accumulated in 9 months reached more than 2,770 billion VND, up more than 30% compared to the same period in 2021 and exceeding 10% of the plan for 2022.
According to data from Freightos - one of the world's largest freight booking platforms, the global container shipping index in the third quarter fell from 6,577 USD to 4,060 USD. However, this level is still 2-3 times higher than the average of 1,800-2,000 USD in the same period in 2020. If compared to the third quarter of 2019, the global container transport index is still anchored at nearly 3-5 times. In Vietnam, the sea freight price index in the third quarter of 2022 increased by nearly 5% over the same period in the previous year. After 9 months of 2022, it increased by more than 11%.
SSI Research assesses that the boom in shipping demand in the past period is mainly due to the impact of the COVID pandemic. Therefore, it will be less sustainable than before the 2008 crisis when the globalization process took place and trade increased globally.
Besides, carriers are now also more cautious when investing in new shipbuilding. The rate of new orders to the total amount of ships is only 28%, significantly lower than 70% during the 2008 crisis.
On the other hand, the challenge for the shipping industry also comes from the new regulation of the International Maritime Organization (IMO), to be applied in 2023. This regulation requires shipping lines to reduce emissions by reducing ships’ speed, upgrading ships, or buying carbon credits. According to SSI Research, the new regulation could reduce the shipping fleet's operating capacity by 5-10%.
SSI believes that carriers may limit supply to control freight rates when facing the risk of oversupply in the coming time. Not to mention, the disruptions in the supply chain have not been completely resolved when China is still implementing the Zero Covid policy and the Russia-Ukraine war is still intense.
Compiled by VietnamCredit