In a landscape characterized by shifting global supply chains, Vietnam’s main ports have experienced a remarkable surge in container-based traffic. This uptrend has been fueled by the ongoing relocation of manufacturers away from China, prompted by the tariff-driven trade tensions with the United States.
Recent data on Vietnam’s growing “connectivity” within the shipping sector underscores this phenomenon. During the fourth quarter of 2023, Vietnam vaulted five positions to secure the ninth spot in the global rankings, boasting a nearly 14% increase in container volumes. Such a substantial volume increase is unprecedented and has been described as exceptional by supply-chain analyst Sea-Intelligence.
In contrast, within the Asia-Pacific region, other nations faced varying degrees of connectivity challenges. Japan saw a 7% dip, while Singapore managed a modest 3% gain, Malaysia nearly 4%, South Korea a little over 5%, and Hong Kong surged by 11%.
Vietnam’s status as a favored container destination did not happen overnight. Sea-Intelligence’s recent report highlights a consistent upward trajectory in Vietnam’s connectivity, including a significant jump during the pandemic that has since been sustained.
This surge in activity within Vietnam’s primary ports can also be attributed to geopolitical factors. The unprecedented increase in containerized trade into North America, a staggering 44% rise between January and November 2023, is a direct consequence of the trade tensions initiated by the United States and China during the Trump administration. For instance, electronics manufacturers have swiftly shifted production from China to Vietnam, capitalizing on the situation.
As noted by the International Monetary Fund’s first deputy managing director, Gita Gopinath, Vietnam emerged as a beneficiary of U.S.-imposed tariffs in 2018 and 2019. Chinese manufacturers and exporters quickly adapted by rerouting their exports through Vietnam and Mexico. This strategic maneuver led to a substantial increase in Vietnam’s exports to the United States.
Vietnam’s geographical advantage also plays a pivotal role in its newfound prominence in shipping. With a significant coastline along the South China Sea, the nation is naturally positioned as a key player in the shipping industry.
Despite ranking only 80th globally in terms of port infrastructure quality, Vietnam is committed to further development. The trade ministry has set a target of achieving a 6% boost in exports by 2024, a goal widely considered attainable. Furthermore, the country’s trade deal with the European Union, initiated in mid-2019, surpassed $50 billion in value in 2021, its first full year of operation.
Vietnam is poised to continue its growth trajectory. The government plans to double its ports’ capacity to 400 million tonnes by 2030, investing in modernization and expansion. While this goal is ambitious, progress is already underway, with upgrades at ports like Hai Phong in the north to accommodate larger vessels.
However, not all sectors have experienced success. The government’s ambitions in shipbuilding have encountered setbacks, with the state-run Shipbuilding Industry Corporation succumbing to bankruptcy due to significant debts.
Nonetheless, Vietnam’s current trade boom positions it as a potential Asian powerhouse. Although initial predictions by Goldman Sachs placed Vietnam at 21st in global economies by 2025, today, the IMF ranks it at 37th, with a GDP of $433 billion. While it still lags behind some nations, Vietnam’s prospects are bright in an evolving landscape of supply chain dynamics.
