Container freight rates increased blatantly: Relying on monopoly for profit?

From the second half of last year to now, sea freight rates have spiked due to the shortage of containers and supply chain disruptions. This unusual situation is pushing enterprises exporting Vietnamese goods and agricultural products into a difficult situation.

Notably, although the situation of increasing container freight rates has lasted for more than a year, businesses have repeatedly called for help and management agencies have intervened but there has been no sign of being resolved, the freight continues to “dance”. “. This makes many people doubt that there is a monopoly for profit.

There are signs of profiteering?

Sharing with VTC News, Mr. Le Duy Hiep – Chairman of Vietnam Association of Logistics Service Enterprises – said that recently, long-distance container shipping lines (USA and Europe) announced a sharp increase in freight rates from early August 2021. The increase is about 2,000 – 5,000 USD per container.

“From the beginning of 2020 until now, there have been at least 2 price increases with terrible increases. This is an abuse of the position that is dominating the international sea transport market share in the Vietnamese market and profiteering, in the global context, especially Southeast Asian countries are exhausted due to the epidemic.” Mr. Hiep commented.

In the face of the galloping increase in container freight rates over the past time, recently, the Vietnam Maritime Administration (Ministry of Transport) and the Import-Export Department (Ministry of Industry and Trade) co-chaired an online meeting with businesses and shipping lines to find solutions to remove, in order to maintain sea transportation, seaports, import and export smoothly with the most optimal price. In particular, do not let the situation of goods transported by sea be congested, hindering the development of the economy in the context of the complicated and prolonged development of the COVID-19 epidemic.

According to representatives of shipping lines, the global impact of the COVID-19 pandemic makes it difficult for them to try to ensure the stability of the cargo supply chain. At the meeting, a number of shipping lines such as CMA-CGM, Evergreen, COSCO … confirmed that there was no shortage of empty containers, the surcharges were publicly listed on the website. The difference between the listed freight and the actual freight is due to supply and demand factors and depends on the negotiation between the shipper and the forwarder (forwarding agent). Therefore, the carriers do not interfere in this agreement.

However, according to the Chairman of Vietnam Logistics Business Association, the arguments of shipping lines are not convincing, blaming the situation as well as on logistics companies and freight forwarders. carriage).

“This is not true, the fact that domestic forwarding companies cannot offer high prices when offering to their customers because of the fierce nature of competition in the market.” Mr. Hiep said.

Mr. Hiep said that authorities should have strong recommendations and policies to force shipping lines doing business in Vietnam to respect the legitimate interests of Vietnamese enterprises. At the same time, there must be a certain level of control to protect domestic production as well as import and export activities. Some countries in the ASEAN region as well as Asia are not “floating” in the field of international container shipping services.

Stop the increase in freight rates

Mr. Hoang Hong Giang – Deputy Director of the Vietnam Maritime Administration – said that in the face of the current complicated and fast-spreading COVID-19 epidemic, the Government, ministries, branches and the Maritime Administration have been making great efforts. force to ensure smooth and safe maritime operations.

In the face of a sudden increase in sea freight rates, the leaders of the Vietnam Maritime Administration suggested shipping lines strictly comply with regulations on transparent disclosure of freight rates, with commitments on ship schedules, space on the ship and ensure enough empty containers to transport goods.

“In the case of self-cutting routes, cutting flights, Vietnam’s state management agencies will apply sanctions to strictly manage them. Shippers should consider working directly with shipping lines to avoid price increases from intermediaries, and at the same time plan to import goods early to sign long-term contracts with shipping lines. Mr. Giang said.

Meanwhile, according to Mr. Tran Thanh Hai – Deputy Director of the Import-Export Department (Ministry of Industry and Trade), shipping lines need to have clear policies, market demand and cooperation to deal with the increase in freight rates affecting their operations. import and export activities of Vietnam.

Hai affirmed that Vietnam is a potential market for shipping lines, so shipping lines will not accept the fact that shipping lines come to do business but do not cooperate with domestic enterprises for common development.

“If the airlines do not cooperate, the state management agency will apply appropriate sanctions,” Mr. Hai said.

Long term solution

Deputy Director of Maritime Administration Hoang Hong Giang said that the inspection results of the inter-sectoral working group on prices and surcharges in addition to the price of container freight services by sea of ​​shipping lines operating routes to Europe. Americas shows that, for customers signing long-term contracts, the freight rates are kept fixed and not adjusted by price changes during the contract period. For small shippers who do not sign long-term transport contracts, the freight rates are floating according to the market.

Besides, because Vietnam has no international logistics enterprises reaching Europe and America, 80-90% of Vietnam’s import and export goods are still following the custom of buying CIF, selling FOB, and chartering rights. and paying the freight belongs to foreign partners, so it is very difficult for Vietnamese goods owners to interfere in the international transport chain.

Most importantly, in principle, it is difficult for state management agencies to control the freight rates of shipping lines because prices operate according to market rules.

In order to ensure the benefits of freight rates for Vietnamese import and export enterprises, Mr. Giang said that it is necessary to build a system of solutions, such as transparency in freight rates by trading floors, transparency in service quality, strengthen inspection and supervision of the listing of prices of foreign carriers in accordance with current regulations… At the same time, ensure clear procedures, and channel infrastructure for large ships to facilitate cargo handling, so that no situation can occur. congestion.

According to Mr. Le Duy Hiep, in the long term, Vietnam needs a fleet of container ships to participate in long-distance transportation and gradually dominate the market share, contributing to changing the practice of buying CIF and selling FOB (common delivery conditions). ) like nowadays. According to Mr. Hiep, in 2020, despite being affected by the COVID-19 pandemic, container throughput through the seaport reached over 22 million TEUs, with nearly 700 million tons of cargo.

However, the Vietnamese fleet only accounts for about 7% of the market share, the rest is in the hands of foreign shipping lines. While 100% of freight by container shipping on long distances goes to foreign ship owners, the state has to spend a huge amount of foreign currency every year.

“Therefore, it is very important and necessary for Vietnam to develop a large container fleet to transport import and export goods. The formation of a strong container fleet not only limits the oppression of foreign shipping lines in terms of freight rates and surcharges, but in the long term is a tool to ensure the country’s economic security, and to perform well. FTA agreements signed with EU, US, Korea, Japan…”, Mr. Hiep commented.

According to VTC