Shipping industry profits continue to rise on surging demand

State-owned Vietnam Maritime Corporation doubled its profits to VND688.9 billion (US$29.8 million) in the period, while its subsidiary Vinaship said profits rose to VND40.2 billion from VND3.2 billion in the same period last year.

The country’s largest private player, Gemadept, reported an 86 percent increase in profits to VND319.2 billion, while the second largest, Hai An Transport and Stevedoring, tripled its profits to VND262.7 billion.

Gemadept expects full-year profits to rise by 24 percent to VND1 trillion, and Hai An by 23 percent to VND550 billion.

Vinaship said demand has been rising since Tet, the Lunar New Year, in February.

The Baltic Dry Index, a general shipping market bellwether, has seen a near doubling since, scaling a five-month high of 2,939 points as of Wednesday afternoon.

Total cargo volume passing through Vietnam’s ports in the first quarter was estimated at 179.6 million tons, up 4 percent, according to the Vietnam Maritime Administration.

Shipping firms’ profits were also helped by soaring freight rates. The cost of transporting a container to the U.S. now is $12,000-22,000, double the tariff last July.

Domestic rates and cargo ship rents also jumped in the first three months, Hai An added.

BIDV Securities said the Vietnam shipping industry has wind in its sails due to the continuing lockdown in China’s major cities.

As a key player in international trade, China’s reduced capacity and congestion at its ports could lead to further freight hikes, benefiting Vietnamese firms, it said.

On the stock market Wednesday Gemadept closed at VND56,000, a 40 percent rise since January, and Hai An at VND83,400, up 77 percent.