Exports of many agricultural products have been significantly affected by the end of 2020 due to the lack of empty containers, which continued to decline sharply in the early days of January.
Coffee exports at the beginning of the year plummeted due to lack of empty containers. Photo: TL
Rice, coffee, vegetables … all fell sharply
In the first half of January, exports of many key agricultural products declined sharply. According to the General Department of Customs, compared with the first half of January 2019, coffee exports decreased by nearly 46% in volume and nearly 43% in value when only reaching over 52 thousand tons and nearly 95 million USD.
Rice exports also fell sharply with only 131 thousand tons, worth $ 72 million, down 44% in volume and nearly 38% in value. Fruit and vegetable exports reached 130 million USD, down more than 33% in value. Tea exports reached 4 thousand tons, worth $ 6.6 million, down 24% in volume and more than 22% in value; pepper reached more than 7 thousand tons, worth 21 million USD, down nearly 24% in volume and nearly 10% in value; seafood decreased nearly 14% in value when it only reached 278 million USD.
The above sharp decline in exports for many key agricultural products in the first half of January was mainly due to a severe shortage of empty containers. The consignments of agricultural products exported in January, incur very high shipping costs.
According to VASEP, information from seafood businesses showed that in January, the freight to Europe continued to increase strongly, with an increase of 145-276% (depending on the port). Specifically, in December 2020, the main port tariff was 2,850 USD / container (container), to January 2021 it increased to 7,000 USD / container (up 145%). Some firms increased from 2,800 USD / cont to 10,550 USD / cont (up 276%).
The price of seagoing ships to the US in January also continued to increase, although the increase was not as large as that to the EU. Specifically: The price for the west coast ports increased 14%, from 3,500 USD / cont to 4,000 USD / cont; going East coast increased from 14-19%, from 4,900 USD / cont to 5,600-5,850 USD / cont. Freight to Japan also increased from 50-100 USD / cont …
This is not only the situation in Vietnam but also in many other exporting countries. Rice exports of India and Thailand are also significantly affected by the lack of containers.
According to the Center for Industry and Trade Information (Ministry of Industry and Trade), slow delivery is taking place very seriously in these two major rice exporting countries. In India, waiting time for the rice carrier is up to 4 weeks due to congestion at the port, so it cannot meet the large demand of customers. Thai rice exporters forecasts that rice exports in 2021 will continue to decline, after falling sharply in 2020, mainly due to lack of shipping containers and too high prices compared to competing countries.
According to Xeneta, port congestion, lack of containers and soaring spot freight rates caused long-term contract rates for containers to rise by 5.9% globally in January 2020.
In Vietnam, many agricultural products such as coffee, pepper … are in stock in a large volume due to lack of shipping containers. Mr. Do Ha Nam, Vice Chairman of the Vietnam Cocoa Coffee Association, the lack of empty containers to transport coffee will lead to the situation that while coffee is stagnant in exporting countries, there is a shortage in consumption market.
A survey organized by the Vietnam Pepper Association in January 2021 in some pepper agents and cooperatives in Dong Nai showed that the amount of inventories in stock is still large, not including the amount sold but not out of stock yet. The situation of high freight rates and no room on board makes a large amount of inventory impossible to release.
Reasonable rotation of containers
According to domestic and international logistics experts, the serious shortage of empty containers will last at least until the end of this first quarter. Since Vietnam’s exports are still dependent on international shipping companies, in the long run, a strategy should be developed to reduce this dependence with solutions such as encouraging investment in container shipping fleets. large size, invest in container factories …
To solve the immediate problem, one of the most important solutions today is how to quickly release the imported containers and the fastest and most reasonable rotation so that more can be added. Many containers to pack for export.
According to Nguyen Duy Hong, Deputy General Director of Smartlogs Supply Chain Solution Joint Stock Company, it is estimated that more than 300,000 TEU (1 TEU is equivalent to 1 20 feet container) of empty containers are circulated between seaports each year. Vietnam. Rotation is currently ineffective, as empty containers are often sent to major ports before moving to secondary ports for exporters.
If this rotation is organized properly, many containers will be involved in exporting goods in the fastest way. For example, “The technological process of optimizing the use of containers” will help the connection to receive empty containers from importers and transfer directly to exporters; flexible container receiving locations according to the needs of the region, creating maximum advantages for businesses to access empty containers for export goods.
