Vietnam’s logistics firms to lose revenue during pandemic

• Thursday, March 19, 2020
• Source:ferro-alloys.com

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[Ferro-Alloys.com] Up to 50 percent of Vietnam’s logistics firms estimate they will see revenue cut in half this year compared to 2019 because of the COVID-19 pandemic.

 

The latest survey conducted by the Vietnam Logistics Business Association (VLA) in early March also found that more than 50 percent of firms thought they would lose from 10-30 percent from their last year’s results due to the pandemic.

 

“As most of the imported materials are to serve manufacturing for export, the prolonged pandemic will affect local exports and indirectly the logistics demand,” the report stated.

 

A representative of VLA said as Vietnam's fleet mainly operated on short routes in Southeast Asia and Northeast Asia, in which the output and turnover of the Chinese market accounted for a major proportion, logistics firms’ result fell badly in the first quarter.

 

He continued: “Similar to sea transport, many Vietnamese ports also have a relatively high degree of dependence on imports and exports related to the Chinese and Hong Kong markets as they are among the largest hubs in the world.”

 

According to Rong Viet Securities Company (VDSC), 40-45 percent of the total number of international ships arriving at the northern port of Hai Phong were from Hong Kong and Chinese ports. In the pandemic, they skipped the two destinations and as a result skipped Hai Phong Port.

 

VDSC estimated container throughput of the northern port could be reduced by 10-15 percent in the first two months. 

 

In such a situation, VLA asked the Government to reduce 50 percent of corporate income tax for 2019 and 2020 to help firms overcome difficulties. It also asked the Government to delay and reduce the contributions of those firms to the different insurance funds.

 

For logistics firms working in the cold storage industry, it asked for a preferential electricity price, which was currently 25 and 30 percent higher than the electricity prices for other production while asking for incentives such as tax reductions, no late payment penalties for related partners of restaurants, hotels and food supply chains, which were also influenced.

 

In the longer term, VLA asked the Government to support firms with more trade promotions and enhancing e-commerce, online trading exchanges and online payment.

 

According to VLA, there were 3,000 logistics firms including ones with less than 50 workers and more than 1,000 workers each in Vietnam./.VNA

 

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• [Editor:kangmingfei]