More than two years after being hit by the global recession, the domestic shipping sector is still struggling, according to experts.

Viet Nam has about 1,880 ships with a combined total weighing of 8 million dead weight tonnage (DWT). However, these ships have only transported 7.6 per cent of all domestic products shipped by sea, including exports and imports.

The figures on use of domestic shipping are quite low when compared to other countries in the region such as China, Japan, Indonesia, Malaysia and Thailand. The state of local shipping is all the more alarming as Viet Nam once boasted the fourth strongest shipping sector in the Southeast Asia region.

The total transport capacity of Vietnamese shipping is much higher than market demand, said deputy director of Bien Dong Sea Transport Company Le Minh Khoi.

Many domestic shipping firms find it difficult to secure regular business.

Khoi said most ships were only working at near full capacity in November and December. During the rest of the year, shipping firms could not secure enough orders.

To make matters worse, the domestic shipping industry now faces growing competition from foreign rivals such as NYK and Maersk Lines, two global shipping firms that have already established a foothold in Viet Nam.

With much larger ships, these firms enjoy an advantage over their Vietnamese competitors.

Deputy director of Viet Nam Ocean Shipping Joint Stock Company Le Viet Tien found many ways to expand their market share in Viet Nam. Some set up joint ventures to enter the Vietnamese market.

In addition, it was relatively easy and cheap for a foreign shipping company to open in Viet Nam, making life for domestic shipping firms even harder.

Source: VIR