Shipping enterprises invest in expanding their fleets

	With positive profits, shipping enterprises increase investment in their fleets
	Shipping companies enjoy positive earnings thanks to high sea freight rates
	Shipping lines do not transparently list freight rates

Enterprises that own large-scale fleets are benefiting from the trend of escalating freight rates. Photo: Internet

Advantage from freight rates

According to statistics from the Vietnam Maritime Administration, in the first eight months of 2021, the total volume of cargo through Vietnam's seaports was estimated at more than 480.4 million tons, up 4% over the same period in 2020.

Container cargo volume through Vietnam's seaport system in eight months still saw double-digit growth with an increase of 18%, estimated at nearly 16.8 million TEUs.

The logistics industry update report of SSI Research said that while the freight rates for bulk and liquid cargoes were stable, the container freight rates had increased by four times compared to the pre-pandemic rates.

In particular, on some routes with high transport demand, freight rates have even increased 4-8 times in a year. In the future, freight rates will not drop and the potential for goods movement is still high, which is the growth motivation of the shipping group. In fact, enterprises have recorded positive business results in the first half of the year. As a result, enterprises that own large-scale fleets are benefiting from the trend of rising freight rates.

According to the estimated business results just announced, PetroVietnam Transportation Joint Stock Corporation (PVTrans, code PVT-HoSE) estimated revenue in the first eight months of 2021 at VND4,930 billion, reaching 82% of the yearly plan. Consolidated pre-tax profit was about VND620.8 billion, exceeding 24% of the plan. Profit in the last two months was lower than the average of the previous period, causing the profit growth to slow down. Even so, double-digit growth is still impressive during this period.

Accumulated to August 2021, the total revenue of Gas Shipping International Corporation - Gas Shipping (HOSE: GSP) reached VND1,130 billion, reaching 138% of the plan; profit after tax reached VND37.7 billion, 20% higher than the business plan at the beginning of the year.

In the first eight months of 2021, the Gas Shipping fleet transported 682 shipments with a total transport volume of about 773,399 tons of LPG. In which, two main customers accounting for a large proportion are Gas Products Trading Company (KDK) and Binh Son Refining and Petrochemical Joint Stock Company (BSR). The rise in oil prices, after the supply-cutting agreement from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, is believed to be the reason for the above-mentioned main customers to increase revenue, thereby indirectly affecting their income positively on GSP's operating results during the period.

Actively upgrade the fleet

Taking advantage of rising sea freight rates, many enterprises have actively rented, received and planned to build new ships with large tonnage.

This is also a long-term plan implemented by many enterprises in both 2021 and the future. Previously, at the beginning of July, PVTrans approved a member unit that received the first VLGC refrigerated liquefied gas ship – the NV Aquamarine.

This is also the third time in the year that PVTrans has expanded its fleet.

Previously, this enterprise used to receive PVT AZURA ship in early February and PVT DAWN in March. Currently, PVTrans is the only shipping unit in the Vietnam National Oil and Gas Group that owns the largest fleet of liquid cargo transport vessels in the country, including 34 units with a total tonnage of about one million DWT. To improve transport capacity, this enterprise plans to invest in 15 more ships. This move will help PVTrans maintain its domestic market share and continue to expand into the international market with 80% of its fleet operating in many regions. Currently, PVTrans has begun to participate in high-standard transport markets such as Europe and North America.

Not only PVTrans, to develop the scale of capital and assets as well as diversify the types of ships to help improve competitiveness, Gas Shipping has taken advantage of a favourable market to successfully invest in one oil/chemical tanker ship with a tonnage of about 20,000DWT.

On September 17, Gas Shipping officially received the ship Shamrock Jupiter (IMO: 9416082) at Port Santos - Brazil, which was put into operation in the Americas market.

According to Gas Shipping, with the receipt of the Shamrock Jupiter, for the first time since its establishment, the total assets of Gas Shipping have surpassed the milestone of VND1,100 billion. This is a big turning point, a premise for the company to rejuvenate and diversify the ship size, the type of ship to catch up with the recovery of the international shipping market, which is expected to recover at the end of 2021 and the beginning of 2022 after the Covid-19 pandemic is brought under control on a global scale.

Sharing the same strategic vision, Hai An Transport and Handling Joint Stock Company (HoSE: HAH) has approved a plan to build a new 1,800 teu container ship in China. Previously, Hai An invested in two new ships, HaiAn West (1,740 teu) and Hai An East (1,702 teu) after buying HaiAn View (1,577 teu) in July 2020. At the same time, HAH also liquidated ships with a long life such as HAIAN SONG. This plan shows that HAH's strategy of "rejuvenating" the fleet is to meet the increasing demand for transportation both domestically and internationally.

Not only upgrading the fleet, in the context that the domestic and global markets are facing a shortage of containers due to the impact of the pandemic causing serious congestion at seaports, implementing the investment plan in 2021, HAH also invested in purchasing nearly 3,000 more TEUs of 20' and 40' containers, the first batch of containers has been put into operation.

At the same time, the company has ordered to build 900 TEU of 20' container and 1,000 TEU of 40' container in China, total 2,900 TEU.

According to HAH, the addition of nearly 3,000 TEUs of new containers at this time has a very special meaning, making an important contribution to ensuring the supply of good quality containers to customers both at home and abroad.