Big shipping firms report record profits

By Tat Dat February 6, 2023 | 05:00 am PT

Containers being handled at Quy Nhon Port in Binh Dinh Province. Photo by VnExpress/Anh Duy

Three major shipping companies reported their highest ever profits last year even though freight charges fell by over 80% from their peak during the Covid outbreak.

Hai An Transport and Stevedoring Joint Stock Company's after-tax profits were up 90% from 2021 at VND1.050 trillion (US$44.49 million); Petrovietnam Transportation Corp's (PVTrans) was up 39% to VND1.16 trillion; and Vietnam Petroleum Transport's (Vipco) rose by 25 times to VND246 billion.

Other logistics firms too reported excellent numbers. Gemadept’s after-tax profits surged by 60% to VND1.15 trillion, its second highest since 2000 when it first publicized financial statements.

Vosco’s profits decreased by 0.4% to VND490 billion, but were still the second highest since it listed on the stock market. Vinalines said profits fell by 23% to VND2.5 trillion, but were still second only to 2021.

According to data from Freightos, one of the world’s largest freight booking platforms, the cost of sending a container from Asia to the U.S. fell by more than 80% late last year.

In the third quarter of 2021 it had been at a record $20,000 per 40-foot container.

But thanks to the better tapping of their fleets and effectively controlling fuel, repair and operational costs, Vietnamese shipping firms still achieved growth. Another factor was the higher demand for goods amid the recovery in many countries.

Data from the General Statistics Office shows that more than 399.5 million tons of cargo were shipped by sea last year, an increase of 27%.

Container freight rates would keep declining in the current realignment of shipping demand and supply, Rolf Habben Jansen, CEO of German’s Hapag Lloyd, the world’s fifth largest shipping company by capacity, Reuters quoted him as saying recently. "The party is over. We are back to a normal shipping business."

In a recent report, securities firm VNDirect said the global port and shipping industries would face difficulties due to the economic downturn, and lower freight rates could affect the performance of local shipping companies in 2023-24.

But it also listed some positive factors like China’s reopening, which would boost global trade and consumption, and the resolution of the container shortage thanks to additional supply in 2022.

Besides, the average Brent oil price is likely to remain at $90 per barrel, helping reduce fuel costs for transporters, it added.