Loading goods at Hai Phong Port in the north of Vietnam. The port is estimated to lose 10-15 percent of throughput in the first two months because of COVID-19 (Photo: congluan.vn)Hanoi (VNS/VNA) – Up to 50 percent of Vietnam’slogistics firms estimate they will see revenue cut in half this year comparedto 2019 because of the COVID-19 pandemic.
The latest survey conducted by the Vietnam Logistics BusinessAssociation (VLA) in early March also found that more than 50 percent of firmsthought they would lose from 10-30 percent from their last year’s results dueto the pandemic.
According to VLA, freight activities have been affected bythe decline in rotation and goods suspended by factories in China. Since theoutbreak, manufacturing activities in China have been stagnant, leading to lowoutput of exports. As a result, many international shipping lines have had toabandon their activities at Chinese ports due to low cargo volume.
According to data from the General Department of Customs, theimport value from China decreased by 7 percent in the first two months of 2020.
That led a sharp decline in value for items that Vietnamimported from China, including fabric, fiber, yarn, iron and steel in the firsttwo months this year. Meanwhile, items commonly transported by air, such asphones, computers, and machinery, have lower levels of decline, said VLA.
“As most of the imported materials are to serve manufacturingfor export, the prolonged pandemic will affect local exports and indirectly thelogistics demand,” the report stated.
A representative of VLA said as Vietnam's fleet mainlyoperated on short routes in Southeast Asia and Northeast Asia, in which theoutput and turnover of the Chinese market accounted for a major proportion,logistics firms’ result fell badly in the first quarter.
He continued: “Similar to sea transport, many Vietnameseports also have a relatively high degree of dependence on imports and exportsrelated to the Chinese and Hong Kong markets as they are among the largest hubsin the world.”
According to Rong Viet Securities Company (VDSC), 40-45percent of the total number of international ships arriving at the northernport of Hai Phong were from Hong Kong and Chinese ports. In the pandemic, theyskipped the two destinations and as a result skipped Hai Phong Port.
VDSC estimated container throughput of the northern portcould be reduced by 10-15 percent in the first two months.
In such a situation, VLA asked the Government to reduce 50percent of corporate income tax for 2019 and 2020 to help firms overcomedifficulties. It also asked the Government to delay and reduce thecontributions of those firms to the different insurance funds.
For logistics firms working in the cold storage industry, itasked for a preferential electricity price, which was currently 25 and 30percent higher than the electricity prices for other production while askingfor incentives such as tax reductions, no late payment penalties for relatedpartners of restaurants, hotels and food supply chains, which were alsoinfluenced.
In the longer term, VLA asked the Government to support firmswith more trade promotions and enhancing e-commerce, online trading exchangesand online payment.
More importantly, VLA thought: “Vietnam’s logistics nowlargely depends on China.” So, it hoped the Government would boost locallogistics as well as expand the connectivity with other countries in ASEAN suchas Thailand to compensate for the shortage from China during the epidemic.
According to VLA, there were 3,000 logistics firms includingones with less than 50 workers and more than 1,000 workers each in Vietnam./.
VNA
