Logistics firms to lose revenue during pandemic

HÀ NỘI — Fifteen per cent of Việt Nam’s logistics firms estimate they will see revenue cut in half this year compared to  二0 一 九 because of the Covid- 一 九 pandemic.

The latest survey conducted by the Việt Nam Logistics Business Association (VLA) in early March also found that more than  五0 per cent of firms thought they would lose from  一0 and  三0 per cent from their last year’s results due to the pandemic.

According to VLA, freight activities have been affected by the decline in rotation and goods suspended by factories in China. Since the outbreak, manufacturing activities in China have been stagnant, leading to low output of exports. As a result, many international shipping lines have had to abandon their activities at Chinese ports due to low cargo volume.

According to data from the General Department of Customs, the import value from China decreased by  七 per cent in the first two months of  二0 二0.

That led a sharp decline in value for items that Việt Nam imported from China, including fabric, fiber, yarn, iron and steel in the first two months this year. Meanwhile, items co妹妹only transported by air, such as phones, computers, and machinery, have lower levels of decline, said VLA.

“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 the VLA said as Việt Nam'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 Rồng Việt Securities Company (VDSC),  四0 to  四 五 per cent of the total number of international ships arriving at the northern port of Hải Phòng were from Hong Kong and Chinese ports. In the pandemic, they skipped the two destinations and as a result skipped Hải Phòng Port.

VDSC estimated container throughput of the northern port could be reduced by  一0- 一 五 per cent in the first two months. 

In such a situation, VLA asked the Government to reduce  五0 per cent of corporate income tax for  二0 一 九 and  二0 二0 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  二 五 and  三0 per cent 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-co妹妹erce, online trading exchanges and online payment.

More importantly, VLA thought: “Viêt Nam’s logistics now largely depends on China.” So, it hoped the Government would boost local logistics as well as expand the connectivity with other countries in ASEAN such as Thailand to compensate for the shortage from China during the epidemic.

According to VLA, there were  三,000 logistics firms including ones with less than  五0 workers and more than  一,000 workers each in Việt Nam. — VNS