HCM City (VNS/VNA) — Competition between seaportsis set to increase in 2020 when more ports open.

The volume of international cargo that passed through portsin the first nine months of 2019 increased by 6 percent year-on-year, lowerthan the 8 percent rate in 2018 and 9 per cent in 2017.

Except for very large ports like Cat Lai in HCM City, most ofthe others faced intense competition, and have adopted various measures toretain customers, analysts at SSI Securities Corporation said.

The demand for domestic transport was weak, and so costs didnot change much through the year and averaged 2-2.5 million VND (86.4-107.9 USD)per TEU from Hai Phong to HCM City.

On international routes, the rate increased by 7 percent forcrude oil transport but the dry cargo rate did not change.

SSI forecast that in 2020 the international container volumehandled by ports would increase by only 6-7 percent and ports’ revenues by 3-5percent this year, with the profit margin likely to remain unchanged due to theincreasing competition.

According to experts, the shipping industry will encounterdifficulties this year because of a new global cap by the InternationalMaritime Organisation (IMO) on sulphur content in marine fuels.

From January 1 ships on international routes are required touse fuels with a sulphur content of 0.5 percent m/m or lower.

A low supply of such fuels has pushed up their pricessharply, and understandably transport companies operating on internationalroutes are hit in the short term, SSI said.

The SSI analyst team forecast that many vessels usedinternationally could return to the domestic market if they are unable to meetthe IMO requirements or incur losses by meeting the new requirement, bringinghuge pressure on the shipping market.

The EU-Vietnam Free Trade Agreement, which is expected totake effect in the second half of the year, and the increase in FDI inflowswould create demand for B2B and marine transport services, it said.

Nguyen Ngoc Hue, president of the Vietnam Association ofPorts-Waterways-Offshore Engineering, said marine transport plays a veryimportant role in the country’s economy.

Marine transport accounts for just 5.2 percent of domesticcargo share, but more than 92 percent of imports and exports.

Nguyen Xuan Sang, director general of the Vietnam MaritimeAdministration, said seaports such as Cai Mep - Thi Vai and Lach Huyen couldberth the world’s largest ships of up to 194,000 tonnes and capacity of 18,300TEUs.

“With Vietnam joining free trade agreements, the volume ofgoods through its ports in the coming years is expected to grow by 12-15 percent a year, and so investment to increases their capacity is urgentlyneeded.”/.