Seaports struggle with COVID-19 pandemic hinh anh 1Cat Lai port in Ho Chi Minh City (Photo: VNA)

Hanoi (VNA) - The COVID-19 pandemic has impacted shipping businesses and seaports dramatically, causing a decline in cargo output and revenue. They expect to receive further support from the Government to "overcome the storm" and restore production and trade in the current context.

Sea transport struggles and plunges

Statistics from the Vietnam Maritime Administration (VMA) showed that the number of vessels and passengers through seaports decreased significantly due to COVID-19, especially international cruise liners. 

In the first quarter, there were 1.656 passengers on international cruise liners, down 36 percent year-on-year. In March alone, there were only two vessels, down nearly 100 percent year-on-year. 

Ocean liner agents reported that, due to the pandemic, cruise liners announced the cancellation of their trips to Nha Trang and Vung Tau seaports until the first quarter of 2021 and will consider taking foreign passengers to seaports depending on the pandemic situation. 

Despite the pandemic, the VMA said cargo via seaports still tended to rise, though slower than the previous average. 

The volume of goods via seaports reached 159,138,000 tonnes in the first quarter, up 8.4 percent annually. Of which, 5,082,000 tonnes were container goods, up 14 percent from 2019. 

The Vietnam Ocean Shipping JSC (Vosco) reported that its net revenue only reached over 347.5 billion VND in the first quarter. Of which, post-tax profit was minus 86.4 billion VND. Compared to the same period last year, its total revenue was down 76.5 billion VND and loss rose by over 40.7 billion VND. 

Explaining the situation, a Vosco representative said the maritime transport market met difficulties due to the COVID-19 lockdown. In half of the first quarter when the epidemic broke out in China, maritime transport activities were almost paralysed, causing a sharp drop in freight rates. 

When the epidemic spread worldwide, countries blocked borders and seaports, resulting in a goods scarcity and low prices. 

Vosco said vessels have to wait for long periods to handle goods because most Asian nations such as India, Thailand, the Philippines and Singapore blocked borders to prevent the pandemic. Businesses must spend 3,000 – 7,000 USD per day on fuel and salaries. 

In the domestic market, Vosco’s container goods went down 20-30 percent on Hai Phong – Sai Gon route in the first quarter. Freight rates decreased by 10-20 percent to about 5.5 million VND per 20-feet container and 6 million VND per 40-feet container on the Hai Phong – Sai Gon route, and about 1.8-2 million per 20-feet container on Sai Gon – Hai Phong route. 

In the same situation, chief of the communications division from the Vietnam National Shipping Lines Tran Tuan Hai said the company’s cargo only neared 4.7 million tonnes, or 84 percent from the same period last year. Its consolidated revenue was around 78 percent from the same period last year, or over 2.2 trillion VND. 

“The company earned a profit of 24 billion VND last year, but incurred a loss of over 111 billion VND only in the first three months of this year,” said Hai. 

Waiting for support to “overcome” COVID-19

In the second quarter, operations of the maritime transport sector and Vinalines will be hit when major goods like apparel, leather and footwear and wooden furniture, which contributed about 60-70 percent of offshore exports, will plunge by 30-50 percent due to falling demand in Europe and the US. 

Vosco forecast that difficulties will be greater when exports to Europe and the US are suspended. Feeders at Cai Mep – Thi Vai port will starve for goods, resulting in serious losses in revenue. It even considered taking some ships off to cut the burden of cost. 

Seaports struggle with COVID-19 pandemic hinh anh 2Maritime transport is facing severe losses due to COVID-19 (Photo: shipspotting)

General Director of Quy Nhon Port JSC Phan Tuan Linh said its port operations are being hit hard. In early April, the volume of goods en route to Japan dropped by 10 percent while containers goods to the US and Europe slumped to an estimated 9,000 tonnes instead of 15,000 tonnes in March. 

“If the pandemic subsides in the next two months, goods via the Quy Nhon port are predicted to fall by about 40 percent. If the pandemic goes on for longer, the port will face the risk of losing 60 percent of cargo volume”, Linh said. 

Representatives from maritime transport firms suggested that the Government should direct ministries and agencies to consider exemption and reduction of value-added taxes for domestic transportation sector within three months. 

The State Bank of Vietnam should consider extending deadlines for debt payment, not change groups of debts and continue offering loans to businesses to increase their floating capital, Vosco said. 

Vinalines also proposed the Government consider policies to support seaport and maritime service enterprises like tax reduction and exemption, as well as offering loans to pay salaries to workers./.