Transportation firms full of hardships because of ‘dual pressure’

05-May-2012 Intellasia | TBKTSG | 7:05 AM Print This Post

The input costs keep increasing, while the passenger and cargo transport demand has decreased sharply, which both have put transport firms in big distress.

“I cannot understand which information sources the Ministry of Transport refer to when releasing the figure that the passenger transportation by road in the first quarter of 2012 increased by 15.3 percent in comparison with the same period of the last year,” said Phan The Hung, director of the Thai Binh Coach Joint Stock Company.

“Meanwhile, our revenue from the 50 operational coaches dropped by 10 percent in comparison with the same period of the last year,” he continued.

He went on to say that the most important task since the beginning of 2012 for him is to prevent the revenue from decreasing further, while he dares not think of raising the coach fee, even though the diesel price has increased by 8 percent (1500 dong per litre).

Analysts have commented that they have every reason to raise doubts about the figures released by the Ministry of Transport. The Thai Binh Coach Joint Stock Company is one of the two major transport firms which are providing services on the Thai Binh -Hanoi, the route with the highest number of passengers in the north.

Meanwhile, the Hanoi Coach Station Management Company has affirmed that the number of coaches running empty on one way because of no passenger-has been increasing considerably, even though transport firms have been trying to keep the fee unchanged.

The pressure of the competition has become so hard that even though transport firms have to pay 4.6 million dong in road maintenance fee per annum for every coach (from June 1, 2012), the Thai Binh Coach Joint Stock Company plans to collect 5000 dong per passenger on the Thai Binh -Hanoi route.

Hung said that if the fuel prices and capital costs continue staying firmly at high levels, his company would incur the loss of 5-6 billion dong this year, after it incurred losses in the last two consecutive years.

Nguyen Van Thanh, deputy Chair of the Vietnam Automobile Transportation Association (VATA), said VATA has sent a dispatch to member companies, asking them to think carefully before raising transport fee. Thanh said that in the context of narrowed transport market and stiffer competition, raising travel tickets would mean killing themselves.

According to VATA, it is now a very difficult period for the passenger transport market. Most enterprises have to cut down all possible expenses and cancel the investment plans to replace or upgrade vehicles.

As for cargo transportation firms, they have signed long term (6 months or one year) contracts with clients. Therefore, whether to adjust the transport fee would still depend on the negotiations between the two parties.

“It would be very difficult to negotiate about the fee increases with big and stable clients, including coal or cement suppliers. Especially, some goods owners have even asked to slash the transport fees, even though the capital costs and diesel prices keep rising,” said Nguyen Xuan Bac, Chair of the Waterways Transport Company No. 3.

Thai Van Chung, Secretary of the HCM City Cargo Transport Association, said that the decision by the Ministry of Transport to collect the road maintenance fee would strike another blow on transport firms, which have been bogged down in big difficulties already with high bank loan interest rates, high fuel prices.

Chung said that with the new regulation, an enterprise owing some 2000 vehicles would have to pay 18.2 billion dong in the road maintenance fee alone. “This is a terribly huge sum of money,” he said.


Category: Business

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