What is the solution for shipping businesses?

(Baonghean) - In recent years, due to the global economic recession, freight transport has declined sharply, causing many difficulties for the maritime transport industry. Many Nghe An maritime transport enterprises are operating at a loss and have had to sell their vehicles because their income is not enough to cover expenses. Many enterprises have sought solutions to turn to other industries to survive.

Nghe An Vinashin Industrial Ship Transport Joint Stock Company is an example. Its predecessor was Nghe Tinh River and Sea Company with quite strong operating capacity. Before 1990, the company had nearly 100 river and sea transport ships of all kinds, with capacity from 50 - 4,100 tons. Large capacity ships often ran in the ocean, the remaining small ships ran inland and China. In 1991, Nghe An and Ha Tinh provinces were separated, and at the same time, the means of transport were divided for Ha Tinh River and Sea Company. Before 2008, the world economy developed rapidly, import and export goods were numerous, goods circulated strongly, and localities competed to build ships to serve river and sea transport. By the end of 2008, the world economy was in recession, the amount of goods circulating between regions and countries decreased sharply. Fuel prices are always fluctuating, labor costs are high, vehicle maintenance and repair costs are large, and freight rates are decreasing, leading to losses for maritime transport enterprises. Nghe An River and Sea Company is in the same situation, its vehicles are degraded and must be liquidated. Along with that, the demand for maritime transport is decreasing, the Company is gradually narrowing its river and sea transport sector, now there is only one ship with a capacity of nearly 5,500 tons, both self-operated and rented. According to the company's leader, although there is only one ship left, operations are still at a loss, because river and sea transport is the main industry of the unit, so it must be maintained. The company has little financial resources, mainly relying on bank loans to operate, while interest rates are high, leading to almost no total profit, even "negative" for many years now, losses from 2009 to present. To survive, the company has developed many industries, including driver training and other professions.

Sea transport ships loading and unloading goods at Cua Lo Port.

Truong Thanh Maritime Transport and Trading Joint Stock Company is one of the few river and sea transport enterprises that currently has many means of transport operating quite actively in the province, but the sea transport vessels themselves are also in a general state of ineffective operation. Ms. Hoang Thi Quynh - the company's accountant shared: The enterprise currently has about 50 vehicles, including domestic transport vessels, barges, and tugboats. Of which, 1 domestic transport vessel has a capacity of 1,000 tons, currently maintaining transportation because of ineffective operations due to low freight rates, few goods, and also difficulty in competing with many other domestic sea transport units. This vessel alone operates at a loss. Previously, the unit had 3 vessels specializing in North-South river and sea transport, but they operated ineffectively, had to sell 2 vessels, now there is only 1 vessel mainly carrying cement, iron and steel, fertilizer, and rice for domestic transportation. There are still dozens of barges and tugboats for rent to serve construction projects across the country. This activity is the main source of income for businesses and compensates for losses for sea transport vessels. However, it is also difficult to get money, many units owe long-term vehicle rental fees, businesses find it very difficult to pay debts because construction units are having difficulty paying construction fees, causing difficulties for vehicle rental businesses. In fact, there is a high demand for vehicle rental customers, but the most difficult thing is that the debt payment ability of units with rental needs is very weak, so businesses with vehicles for rent are not very interested.

This is also the common situation of many shipping enterprises in the province today. The slowdown of the world economy has caused many shipping enterprises to face bankruptcy. Due to the general impact of world maritime-trade activities, and difficulties such as falling freight rates, rising fuel prices, etc., most shipping enterprises have low profits and face many difficulties in business operations. The most prominent is the scarcity of goods, many vehicles only transport goods one way or run "empty", many routes have to park for a long time due to lack of goods to transport. This leads to insufficient revenue to cover costs, especially the cost of paying interest on bank loans, at times the interest rate is up to over 20%/year. Many enterprises have long-term overdue debts, at risk of bankruptcy...

Talking to us, Mr. Tran Nhat Thanh - Deputy Director of Truong Thanh Maritime Transport and Trading Joint Stock Company said that we have advantages in the sea but cannot exploit them effectively. For many years, the fleet of sea transport vessels from North to South has been losing money due to many reasons such as the impact of the general economic recession, the decline in demand for sea transport, limited ship capacity and seaport infrastructure; procedures for entering and exiting ports take a lot of time; lack of skilled crew members makes it difficult for businesses to find good workers. Moreover, our region does not have a river route, in my opinion, the solution to overcome the current difficulties for maritime transport enterprises is to open sea routes, for ships S1, S2 (according to regulations, can only run on rivers) should be converted into SB ships to run to sea, thus reducing many costs for sea transport because of lower prices. Recently, due to the tension and overload of road transport, the Ministry of Transport decided to open the river - sea route from Quang Ninh - Quang Binh. This will open up opportunities for shipping businesses to restore their operational capacity more effectively.

In July 2014, Nghe An Maritime Port Authority held a direct meeting with shipping, seaport and maritime service enterprises in Nghe An area to discuss and summarize the opinions that the enterprises are facing difficulties and obstacles in production and business activities. The enterprises proposed to dredge the Cua Hoi - Ben Thuy route to the designed depth to serve ships entering and exiting Xuan Hai port (Ha Tinh), Hung Hoa oil port and Ben Thuy port (Nghe An) conveniently. Currently, at Cua Lo port, due to the limitation of the channel (only reaching minus 5.5m), large ships entering and exiting the port must depend on the tide, causing great difficulties for ship owners and agents. It is proposed to dredge the Cua Lo channel to a depth of at least minus 7.5m to ensure the entry and exit of ships. In fact, the volume of goods passing through Cua Lo port increases every year, each year is higher than the previous year, the trend of cargo owners hiring large cargo ships with a capacity of over 10,000 DWT. Therefore, the Vietnam Maritime Administration needs to pay attention to early dredging of the shipping channel into Cua Lo port. At the same time, urgently build fishing ports for fishing boats in the Cua Lo area to anchor to avoid the situation of fishing boats anchoring, docking, and docking alongside Cua Lo port, causing insecurity and maritime security.; the electronic declaration and licensing system is not yet synchronized across all seaports nationwide, so there is no uniformity in the issue of receiving procedures at different ports. The online declaration and licensing system is not yet highly effective in practice and agents still have to follow traditional methods. Seaports need to improve the efficiency of loading and unloading goods to shorten the time of cargo handling.

The country is increasingly integrating deeply with the world, businesses have the opportunity to do business in larger markets. Shippers will have many options with low costs and good quality from foreign companies. However, most of the maritime transport enterprises in our province are small in scale, poor service will make it difficult to compete in the market. Therefore, from now on, businesses need to focus on improving their internal capacity to meet actual needs. Moreover, relevant sectors and authorities need to have open mechanisms, shorten the time for procedures in and out of ports, improve the capacity of seaport infrastructure, develop the maritime industry synchronously, only then can the maritime transport industry promote its advantages.

Quynh Lan