Navigating Vietnam’s Booming Seaport Industry in 2024
By Hoa Khoa, Minh Hue
Tue, January 21, 2025 | 8:17 am GMT+7
Vietnam’s seaport industry has seen a remarkable resurgence in 2024, with numerous companies reporting significant profit increases compared to the previous year. This growth can be attributed to a variety of factors, including rising cargo volumes, enhanced maritime transport capabilities, and a favorable regulatory environment.
Cargo Volume Surge
According to the Vietnam Maritime Administration, the volume of cargo passing through Vietnam’s seaport system reached an impressive 864.4 million tons in 2024, marking a 14% increase from 2023. Container throughput rose even more dramatically, surging 21% to 29.9 million Twenty-foot Equivalent Units (TEUs). Additionally, the number of vessels accessing these ports increased by 2%, totaling 102,670.
The performance of Vietnamese-owned vessels is particularly noteworthy, with a 3% increase in cargo handled—totaling 140.9 million tons—while container cargo saw an 11% uptick to 3.04 million TEUs. This resilience illustrates not only the strength of the national fleet but also the growing domestic demand for maritime services.
Hai Phong Port in Hai Phong city, northern Vietnam. Photo courtesy of Hai Phong Port JSC.
Financial Highlights
Financial statements for the fourth quarter of 2024 reveal that several seaport companies are enjoying profitable growth. The surge in maritime transport demand is complemented by regulatory support, particularly the Ministry of Transport’s Circular 39, which alters the seaport service pricing framework, allowing companies greater pricing flexibility.
Maritime transport rates have seen a year-on-year increase of 10-15%, while charter rates have surged sharply. A prime example is the Vietnam Maritime Corporation (VIMC), which not only achieved a transport volume of 20 million tons—22% above its target—but also witnessed a 27% increase in cargo processed through its port system.
VIMC’s total revenue for 2024 reached an astonishing VND24.81 trillion (approximately $979.8 million), exceeding its target by 35%. Moreover, the company’s pre-tax profit rose to VND3.51 trillion ($138.6 million), marking a 65% increase from the previous year and the highest profit reported in three years.
Noteworthy Company Performance
Hai Phong Port JSC is another key player in the market that showcased robust growth. In 2024, it celebrated handling its 1 millionth TEU and reported total cargo throughput of approximately 40 million tons, translating to nearly 2 million TEUs in container throughput. Its revenue skyrocketed to an all-time high of VND2.91 trillion ($114.3 million), greatly surpassing its initial target of VND2.31 trillion.
Additionally, VIP Greenport JSC (VGR) posted impressive figures, with its revenue hitting VND1.09 trillion ($43 million), a 22% increase year-on-year. While net profit dipped in Q4, its overall yearly results indicated strong resilience, achieving VND340.7 billion ($13.45 million) in net profit.
Strategic Developments
The establishment of joint ventures has been pivotal for certain companies. Hai Phong Port JSC initiated two significant partnerships with prominent shipping firms, SITC and TIL, the latter being a subsidiary of MSC, the world’s largest shipping company. This strategic move aims to enhance operational efficiencies within the Hai Phong International Gateway Port.
Prospective Growth
Looking ahead, the prospects for Vietnam’s seaport stocks appear strong despite potential global economic challenges. The projected continuation of cargo volume growth is bolstered by increased public investment in transportation connectivity and infrastructure. Upgrades to significant maritime routes are expected to attract new partners, further bolstering the sector.
Moreover, the Ministry of Transport’s approval for dredging projects around port areas like Nam Dinh Vu suggests a proactive approach to enhancing operational capabilities. Experts at Mirae Asset predict that upcoming changes in shipping alliances in February 2025 will disrupt existing service routes, likely redistributing cargo among ports.
Sustainable Future
As we move into 2025, the seaport sector is set to thrive with anticipated yearly freight rate growth ranging from 5-10%. This optimism stems from the adjustments made under Circular 39, which provides a more flexible pricing framework for companies, strengthening their financial performances.
Overall, the growing trend highlights the importance of investing in seaport companies that possess robust financial structures and are committed to expanding their operational capacities at strategic locations. With a vibrant seaport industry, Vietnam is strategically positioned for sustained maritime growth.