Import and export face difficulties with shipping rates
Speaking to Tuoi Tre, Ms. Ngo Tuong Vy, director of Chanh Thu Company (Ben Tre), said that shipping rates have increased sharply recently, especially in May, greatly affecting export activities. Accordingly, the average price of a container exported to the US is about 6,000 – 7,000 USD, double the previous price.
Not only exporting goods to the US, according to the director of an agricultural export enterprise, the shipping cost from Vietnam to Europe is around 4,000 – 5,000 USD/container, 2 – 3 times higher than the end of last year. The shipping cost to regions such as China, Japan, Korea and Southeast Asia has also increased, ranging from 1,000 – 2,000 USD/container.
According to this person, shipping rates have increased many times, then gradually cooled down, then increased sharply again, causing difficulties for businesses because of sharp increases in export costs and being passive in price negotiations with import partners.
“We have to combine goods with other businesses to have enough containers, and schedule exports earlier to have time to find good freight rates. However, the State needs to have a plan to support taxes and fees for import-export businesses; shipping and airline companies need to find more means of transportation to increase supply,” he said.
According to Mr. Tran Huu Hau – General Secretary of the Vietnam Cashew Association, the biggest concern for businesses is not knowing what the upcoming transportation costs will be. If the increase continues, with subsequent orders, buyers will certainly raise the issue of sharing the increased transportation costs.
“Therefore, we recommend that shipping lines be transparent and promptly inform businesses about related issues so that they can be aware and have a response plan to minimize damage,” Mr. Hau stated.
Many exporters said that the congestion at the port caused them double losses. In addition to the high freight rates, there were cases where shipping lines unilaterally imposed quite high fees on businesses because the goods had been loaded onto the ship but had not left the port as scheduled due to the congestion.
Businesses suffer double losses
Not only are sea freight rates increasing, according to a representative of a food export business to the US and Europe, booking ships is quite difficult because goods arrive at the port but there are not enough ships, so sometimes we have to wait for many days, even weeks to be exported, delaying delivery and businesses incurring additional costs due to storing goods at the port.
“Many Vietnamese businesses have almost no choice because the domestic shipping fleet currently only handles about 10-15% of the market share, mainly routes near Southeast Asia, China…, the rest of exports from Vietnam to the US, Europe… largely depend on foreign shipping lines,” he said.
Speaking with Tuoi Tre, a representative of a shipping company in the South said that in addition to being affected by the situation in the Red Sea, which has caused difficulties for many shipping lines, forcing ships to change routes, China’s increase in collecting empty containers to serve the export of electric vehicles and congestion at the container port in Singapore are also factors that have negatively impacted maritime transport, pushing up freight rates.
“Freight rates may increase. However, the factors that affect them are mostly temporary, so freight rates will likely cool down to normal levels if the above causes are resolved soon in the third quarter,” he affirmed, adding that the major congestion at Singapore port may force some shipping lines to choose to bring some ships to ports in Vietnam, and this is an opportunity for the domestic shipping industry.
However, this also makes competition more intense, freight rates may increase, pushing difficulties to businesses. According to businesses, the whole country has only about 4-5 large shipping lines, controlling all aspects of maritime transport. When there is a risk, customers will often ask the exporting unit for support. Therefore, businesses are in dire need of early information, creating initiative in negotiating the next order.
Some shipping experts say that because the US government is planning to impose heavy taxes on many types of goods originating from China, Chinese exporters and US importers want to speed up import and export to avoid taxes.
Accordingly, many businesses from these two countries are willing to pay higher freight rates to reserve space and occupy containers in advance, making it easier to import and export. “In particular, the amount of goods from Chinese exporters is said to be piling up at Singapore ports, which puts the difficulty on other businesses when they cannot compete,” said an expert in the field of maritime transport.
Transporting cargo containers onto ships at Cat Lai port, Thu Duc city – Photo: TU TRUNG
Logistics businesses sitting on fire
Not only shippers, but many logistics businesses are also sitting on hot coals as freight rates increase, and booking ships is also facing many difficulties. According to businesses, China is absorbing a large number of empty containers, serving exports to the US before August 1, the time when the US will impose heavy tariffs on many types of goods imported from China.
Mr. Nguyen Thanh Tuan, General Director of Blue Sea Transportation (HCMC), said that businesses should “forget” about booking a ship in July because it is very difficult. For example, Blue Sea has a schedule of 50 containers of goods shipped from Bangkok – Vietnam but has only booked 5 containers. It will be until August that they can book another 5-10 containers, which is not as easy as before.
Instead of booking a monthly shipping schedule, businesses now have to strain to receive weekly quotes from shipping lines. “Shippers are having a hard time as shipping rates to the US have increased sharply. If they want to go urgently, they have to pay a higher fee to reserve a container of goods. In particular, depending on the route, booking a ship for the following week is not possible; at least they have to schedule the shipment for a month or more,” said Mr. Tuan.
Nguyen Hoai Chung, CEO of Phaata Logistics Exchange, said congestion at transit ports in Singapore, Hong Kong and Taiwan has affected shipping schedules. “Ships arriving at transit ports have to wait three days, or even 1-2 weeks, without being able to unload their cargo, disrupting schedules, increasing turnaround time, leading to further increases in freight rates,” Chung said.
According to the warning of Mr. Le Duy Hiep, Chairman of the Vietnam Logistics Service Enterprises Association, businesses also face many risks and contract penalties if they are late in delivery due to the impact of difficulty in booking ship schedules…
Can Vietnam take advantage of this opportunity?
Talking to us, the marketing director of a foreign shipping company with an office in Ho Chi Minh City said that the increase in shipping costs and congestion at transit ports have disrupted the operations of the entire supply chain, especially the export goods of Vietnamese enterprises. Because Vietnam’s export activities to large markets such as the US and the EU region… largely depend on foreign shipping companies.
According to this person, in addition to the conflicts taking place in the Middle East, Chinese customers are increasingly holding containers and booking in advance, causing sea freight rates to skyrocket. Chinese exporters and US importers are racing to get ahead of August 1, creating a wave of goods exports before the tax takes effect.
Demand for empty containers in China and Vietnam is very high because these are major exporting countries. “However, the return of empty containers from Europe, the US and major importing regions is slow, causing exporters to face delays and increased costs due to the lack of containers,” he said.
Many businesses believe that the current chaos may ease after August 1. However, the problem is that Vietnam is prepared to take advantage of the opportunity to rebuild the global transportation supply chain from this event.
“Until now, deep-water ports have been in Singapore, Malaysia or Indonesia, but due to geopolitical issues, some shipping lines are planning to move to Vietnamese ports. If we are prepared in terms of infrastructure and service provision, we can benefit,” said Mr. Trung Tuan, an expert in the maritime sector.
Meanwhile, Mr. Nguyen Chanh Phuong, Vice President of the Ho Chi Minh City Handicraft and Wood Processing Association, said that to overcome difficulties in transportation, some businesses have sought new markets or switched to nearby markets such as Japan, Korea, etc. instead of focusing on Europe and the US.
According to Tuoi Tre
