Quy Nhon Port in the south central province of Binh Dinh. (Photo: VNA) Hanoi (VNS/VNA) - Freight and logistics stocks have seen major gains sincethe beginning of 2020 even as the COVID-19 pandemic has wreaked havoc on theeconomy.
According tothe General Statistics Office, the country's exports topped 254 billion USD duringthe first 11 months of the year, making for an increase of 5.3 percent over theprevious year, while imports were estimated at 234.5 billion USD.
Increasedtrade activities coupled with a number of international trade deals which wererecently signed or came into effects such as the Comprehensive and ProgressiveAgreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free TradeAgreement (EVFTA) and the Regional Comprehensive Economic Partnership (RCEP)have significantly boosted investors' confidence in logistics stocks.
A number ofstocks such as VSC, GMD, DVP, DXP, SFI and HAH have seen double-digit growth inrecent months and some of them set all-time high records on the trading floor.
Experts,however, pointed out the recent rise in stock value did not necessarily comefrom better business performance but rather investors' optimism in the sector'sfuture. For example, despite the increased trading value, Gemadept has reporteda 32 percent drop in profit in the first three quarters, Tan Cang Logistic(TCL) a 15 percent drop and Hai An Logistics a 9 percent drop.
A containershortage, typically experienced by logistics firms during the end of the yearwhen import/export activities are at the highest level, especially for anexport-oriented economy such as Vietnam, contributed to an increase inlogistics costs.
A report fromthe Vietnam Logistics Business Association (VLA) showed more than 40 percent offirms had difficulty finding containers for their cargo with up to 17 percentunable to rent them. This has created a large backlog of cargo at port andstorage facilities across the country, which generated additional revenue forlogistics firms.
Meanwhile,freight charges have skyrocketed in recent months. According to Freightos, aHong Kong-based shipping company, the freight charges for a 40-feet containerfrom China to the US west coast has almost tripled to near 4,000 USD.
Investors alsoseem to be betting on an increase in port charges as Vietnam's current priceswere comparatively low in the region. A statement from the VLA said the sectorhas set an objective to bring charges to 60-70 percent of the region's pricelevel by 2025, which they have planned to start bringing up at the beginning ofnext year./.
VNA
