Enterprises “headache” about the freight charges

Too many consequences because of rising freight rates?

Congratulation at the beginning of the new year 2021, Minh Phu Seafood Joint Stock Company has “opened” the first export order, but the problem of high-priced container charges is causing businesses to wonder.

Mr. Le Van Quang, Chairman of Minh Phu Seafood Corporation, shared: In 2020, this unit could have exported more, but due to the shortage of empty containers, no ships, Therefore, there is a certain amount of product still in stock. “It is true that this year Minh Phu can export more, but because there are no ships, no containers, so the goods can not be exported and are in the warehouse”, Mr. Quang said.

According to Mr. Quang, the price of a 20-foot container from Vietnam to the European market has increased from US $ 1,200-1,500 / container in June 2020 to US $ 7,000-8,000 / container at present. The corresponding increase for 40 feet container is from 1,500 to 1,800 USD / container to 8,000-10,000 USD / container. In 2020, Minh Phu produces with a total output of processed shrimp for export reaching 55,000 tons, an export turnover of about 580 million USD, in the total export turnover of the industry will reach about 4 billion USD.

Similar to the situation with Minh Phu, Chairman of Navico (ANV), Mr. Do Lap Nghiep emphasized the extremely difficult situation, especially in the last months of the year. Rates are now 2-3 times higher, from 200-300 USD to 600-700 USD, not to mention there is no container to use.

“It can be said that exports in general and seafood in particular are facing double difficulties. The outbreak of COVID-19 since the beginning of the year has a significant impact on the business situation of the business, which everyone knows. And now, the severe shortage of containers, along with the rising cost of freight, makes it very difficult for businesses, affecting 20-30% of business productivity. This needs the State, the Ministry of Industry and Trade to participate in the rescue to be able to remove it, ”said Lap Nghiep.

According to Navico forecasts that the shortage of containers will last until the end of the first quarter of 2021, the company will strengthen working with customers, calling for price sharing to support each other in difficult times.

In addition to the rapid increase in freight rates, the shortage of empty containers has also slowed down the export plans of many businesses. Photo: dautu

Much affected by lack of containers, Phuc Sinh Company statistics that on average in December, the enterprise can export 40-45 containers of agricultural products, but currently the number of exported goods is less than 1/5 of normal. In addition to skyrocketing rates, the shortage of empty containers also slowed the export plan.

“Now the coffee and pepper are in season, but we cannot buy them because they cannot export. I think this will have an impact on the prices of farmers and suppliers because we cannot buy them if we cannot export, ”said Mr. Phan Minh Thong, Chairman of Phuc Sinh Company.

When does the price drop?

During the meeting on the increase in the price of container goods by sea on January 12, many shippers in the seafood, plastic and wood industries shared: Over the past 3 months, the rental price of empty containers has continuously increased, from the original level. At the beginning of less than 1,000 USD / 40 feet container, it is now priced up to 8,000 USD, even 10,000 USD / 40 feet container going to the UK market. This is an unreasonable increase and shipping lines need to have the transparency of price information, as well as the increase to be more appropriate.

Ms. Huynh Thi My, General Secretary of Vietnam Plastic Association (VPA,) said: The increase of sea freight by 3-4 times in the past time has seriously affected businesses in the plastic industry, making reduce export sales. Currently, there is 1 Indian enterprise in the Vietnam – Singapore industrial park specializing in the production of export yarn announced to close the factory in December 2020.

Many foreign businesses stop producing or selling goods without making a profit because of high fees. Photo: hungalogistic

The reason that this enterprise gives is because the shipping cost is too high, affecting export activities and production costs in Vietnam are no longer as cheap as before. So they suspended all orders since December 2020. Meanwhile, many other plastic enterprises, the sale of goods is not profitable, but the volume of goods exported is still very slow, the number of inventories compared to this time last year is up to 50%.

According to the shipping lines, due to the disease, the release of goods and the rotation of empty containers are prolonged. In addition, the volume of goods exported to Europe and the US increased dramatically, leading to a lack of empty containers for packing. Some shipping lines confirmed that they did not cut trips from Vietnam, even increased flights, but due to a serious shortage of containers, this leads to the current situation.

The shipping lines also said that this situation at least lasted until the end of March 2021, maybe even to the second quarter of 2021 if the disease was still complicated. In response, shipping lines proposed: Authorities consider solving thousands of derelict containers at ports to “source” empty containers for export.

According to Mr. Hoang Hong Giang, Deputy Director of the Vietnam Maritime Administration, “I think that the increase in the rate of renting empty containers for goods is the supply and demand of the market, but the shipping lines need to comply with the requirements of the Maritime Administration in transparency. price. Particularly for the proposed response options such as clearance of backlogged containers at the port… we will have appropriate considerations ”, Mr. Giang said.

On the side of the Ministry of Industry and Trade, Mr. Tran Thanh Hai, Deputy Director of the Import and Export Department, shared: “The Ministry of Industry and Trade and the Ministry of Transport will report to the Prime Minister on this issue to ensure the harmonization of interests. parties ”, Mr. Hai emphasized. In addition, Mr. Hai also recommended that exporting enterprises should have a plan to discuss with partners to extend the delivery schedule, and at the same time study the carriage to Europe by rail to avoid dependence on sea.

According to the researcher