Cargo throughput of deep-water ports in Vietnam this year is likely to double compared to transshipment ports, while the capacity of seaports remains unchanged, according to SSI Research, which feels this is expected to have a positive impact on the profits of deep-water port businesses.

Throughput will recover due to improving import-export demand, particularly as US and European markets replenish their inventories, analysts at the company found. Transshipment ports primarily serve the intra-Asia market.

This will benefit companies like Gemadept Corporation and Vietnam Nam Maritime Corporation (MVN), which own deep-water ports.

Last year, the average freight rates at Vietnamese seaports remained stable. However, the after-tax profits of listed parent companies in the seaport industry dropped by 4 per cent year on year (YoY) in the first three quarters last year, primarily because of decline in throughput.

As US retail businesses will ramp up inventory restocking after a 1.5-year inventory reduction period and the next interest rate cut by the Federal Reserve leads to consumer spending and production, that will contribute to a rise in the volume of goods transported by sea and handled at Vietnamese ports, a Vietnamese news outlet cited the company as saying.

The capacity of Vietnamese seaports in terms of supply will not see significant changes until 2025, when several large deep-water ports become operational.

The country’s seaport industry recorded less negative results in terms of volume, especially in the second half last year. Vietnam Maritime Administration data shows total container throughput in the country in the first 11 months last year decreased by only 1 per cent YoY, reaching 22.6 million TEUs.

Fibre2Fashion News Desk (DS)

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