LOGISTICS INDUSTRY OUTLOOK IN THE FIRST QUARTER OF 2024

Logistics is a key industry in Vietnam’s economy. In the first quarter of 2024, the maritime transport sector saw significant growth. Container volumes recovered alongside better service fees.
At the start of 2024, the global economy showed many signs of recovery following the difficulties of post-Covid and inflation. Although some of Vietnam’s main export markets such as the US, EU, ASEAN, and Japan declined, the average export-import growth rate of Vietnam still maintained at 11.3% per year.
Therefore, moving into 2024, it is expected that the volume of goods passing through seaports will increase by 5-6% thanks to the recovery and improvement of import-export activities.
Logistics is one of the key sectors of the Vietnamese economy
EXPECTATIONS FOR THE RECOVERY OF MAJOR EXPORT MARKETS
Leading the list is the US, the number one export market, with total export volume increasing by 63.4% compared to the same period last year, reaching 10.1 billion USD. Following are other key markets including China, with export value up 17.7% to 4.6 billion USD, South Korea up 37.7% to about 2.3 billion USD, and Japan up 44.9% to an estimated 2.2 billion USD.
In the import market, China leads with 11.9 billion USD, an increase of 65% compared to the same period last year, followed by South Korea with a turnover of 4.2 billion USD, up 7.4% YoY, Japan with 2 billion USD, up 14.8%, and the US with 1.2 billion USD, up 37.3%.
Chart of Vietnam’s Import-Export turnover in early 2024
According to experts’ statistics, the strong recovery in trade activities and the investment wave from international corporations into Vietnam, along with the commercial promotion needs of businesses and customers, has driven the growth of export activities in the first quarter of 2024. Some textile, electronics, and household appliance companies reported a sharp increase in orders, which will support commercial activities in 2024.
CAI MEP – THI VAI PORT BENEFITS FROM NEW REGULATIONS
Cai Mep – Thi Vai Port is the largest container port in Vietnam, accounting for about 50% of the total volume of goods passing through the country’s seaports annually.
With the changes from Circular 39/2023/TT-BGTVT effective from February 15, 2024, regarding the increase in barge fees (FBF) by 30-33% and the floor fee framework for container handling (FHC) by about 10%, each port/area has seen positive impacts such as the recovery of container volumes and better total revenue from port services.
Cai Mep – Thi Vai Port has significantly benefited in terms of goods handling and transportation capabilities. However, ports like Hai Phong and those in Ho Chi Minh City were not significantly affected. The major impacts on ports depend on: the revenue structure of each port, the competitiveness of each area, and the transportation methods for containers to other regions.
Cai Mep – Thi Vai Port
At Hai Phong port, container handling and transportation services account for about 50-60% of total revenue. This service accounts for up to 80% of total revenue at Cai Mep – Thi Vai, leading to an additional fee increase of 9-10%, which boosts profits and revenue more than at Hai Phong port.
In a competitive context, although Cai Mep – Thi Vai can increase handling fees according to the new regulation, Hai Phong has an advantage in the number of ports with 15 container ports, three times the number at Cai Mep – Thi Vai. Ports in Ho Chi Minh City have long applied higher handling fees due to irregular capacity, so the state’s increased handling fee has little impact on these ports.
Regarding container transportation methods, Cai Mep – Thi Vai uses barges for 90% of container transport to other areas, accounting for about 10% of the port’s total revenue. Hai Phong and Ho Chi Minh City mainly use container trucks. Therefore, the increase in transportation fees will benefit Cai Mep – Thi Vai port.
With the increase in import-export activities, the logistics industry is gradually recovering and showing significant growth signals. The approval of the new Circular by the Ministry of Transport is considered a positive move, anticipated by businesses, agencies, and associations to restore the maritime transport economy. With average freight rates decreasing, fuel costs dropping, and supply remaining stable, the logistics industry is expected to grow strongly and flourish further in the coming quarters.
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