Red Sea tension, the thing businesses are most worried about right now is the situation of “water falling with the rain” in increasing freight rates and surcharges, making them like “fish on a chopping board.”
This is information shared by businesses and industry associations at a meeting to discuss solutions to overcome difficulties for import-export businesses due to the situation in the Red Sea coordinated by the Import-Export Department (Ministry of Industry and Trade). together with the Vietnam Maritime Administration (Ministry of Transport), Middle East – Africa Department (Ministry of Foreign Affairs) held on the morning of February 6, in Hanoi.
What do representatives of associations say?
The American and European markets account for about 50% of Vietnam’s total textile and garment export turnover. Mr. Truong Van Cam – Vice President and General Secretary of the Vietnam Textile and Apparel Association (VITAS) – said that currently businesses in the industry are importing CIF and exporting FOB, so there is a direct impact. Not much in sight. Because orders have already been signed, manufacturing and exporting businesses are usually only responsible for the goods on board. The next steps will be borne by shipping lines and customers.
However, when a risk occurs, there will have to be sharing, or in other words, customers will ask sellers to share certain shares to reduce their losses. On the other hand, normally there are no unexpected situations like this, customers have requested fast delivery, and when the shipping time lasts from 10 to 15 days, it leads to a shrinking production time, causing Pressure on manufacturing businesses to deliver on time.
“The most worrying thing is that we cannot predict when it will end. If this continues for a long time, customers will certainly ask about sharing costs due to increased shipping costs in the next orders. Therefore, what businesses are interested in is having early and timely information to create initiative in negotiating next orders.” Mr. Truong Van Cam shared, and at the same time suggested that shipping lines with additional surcharges, if any, or changes related to cost issues need to be transparent and informed early and promptly so that businesses can There are response directions.
In the field of seafood, Mr. Nguyen Hoai Nam – Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) – said that Red Sea tensions are a matter of concern for the business community, because Besides the impact of increasing costs, there are also accompanying consequences. Notably, we also do not know how long the Red Sea tension will last. This affects future orders, or costs that businesses need to calculate into product prices.
Calculated for the total cost for 1 container of goods in the past month, shipping costs to the West Coast are increasing by 70%, but shipping to Europe for frozen goods is increasing nearly 4 times. Like other industries, along with difficulties in declining export orders, Red Sea tensions create additional difficulties for industries.
Appreciating the fact that the three ministries joined forces to organize this meeting, Mr. Nguyen Hoai Nam also proposed that he would like to receive more information. At the same time, he said that what export businesses and state management agencies are most concerned about is the cooperation, support, and active participation of shipping lines, one of the important links at this time. important in import and export activities.
“Most shipping lines change routes to go around the Cape of Good Hope, in the context that in 2023 both imported and exported goods will decrease by 30-40%, this means that shipping lines will cut down on mother ships. Combined with Red Sea tensions, the shipping time from Asia to Europe is extended to 14 days, thus doubling the delay.” Mr. Nguyen Hoai Nam shared.
| Mr. Nguyen Hoai Nam – Deputy General Secretary of Vietnam Association of Seafood Exporters and Producers (VASEP) shared at the meeting |
In the field of agricultural products, Ms. Hoang Thi Lien – President of the Vietnam Pepper and Spice Association said that currently this item is exported to the EU market accounting for 20%. In the future, Vietnam – EU trade relations will still focus on agricultural products, in which pepper and spices have an absolute advantage. The Red Sea conflict has a low agricultural export value but is greatly affected.
“There are businesses that have loaded goods onto ships since December 20, 2023, but on January 5, 2024, that is, 15 days after the shipping company has started, a surcharge of 2,000 USD/40-foot container will be applied. . Applying fees arbitrarily, without prior notice, without dialogue or agreement puts exporters in a “fish on the chopping block” position. Ms. Hoang Thi Lien shared and said that the shipping companies’ behavior is not transparent, not public, and not appropriate.
Ms. Lien even said that if the business does not pay this additional surcharge, they will send an additional late payment surcharge, within 1 week if the shipping company does not pay the surcharge (2,000 USD). requirements, this makes businesses even more frustrated.
Currently, shipping costs for this item to the EU market have increased 5-6 times. Therefore, the Vietnam Pepper and Spice Association proposed to have sanctions against shipping lines, not allowing shipping lines to “arbitrarily and independently” increase fees or impose fees.
Regarding the application of surcharges by shipping lines, a representative of the Vietnam Maritime Administration said that currently, according to regulations in Decree 146, shipping lines must publicly post freight rates as well as surcharge issues. on the shipping company’s website and notify customers.
In case of changes or increases, notification must be made 15 days in advance. Shipping lines immediately increase surcharge prices without notice. In any case that shipping lines apply incorrectly, businesses send it to the Vietnam Maritime Administration, which commits to properly handle the problem. In cases where shipping lines and businesses violate the price listing according to the provisions of law.
We need to be cautious and have long-term solutions
Mr. Dau Anh Tuan – Deputy General Secretary of the Trade Federation and. Vietnam Industry (VCCI) – assessment, the Red Sea conflict affects production and business of industries and businesses, and has potential consequences for import-export activities and the economy in 2024 and even will be longer. Therefore, it is necessary to be cautious and have a long-term solution.
Risk is inevitable and considered normal, but the unusual problem is that the risk distribution is uneven among businesses and product chains, in which exporters have no voice, but Small businesses are the ones affected.
It is normal for shipping companies to increase freight rates due to increased costs, longer time, and longer ship turnaround. However, unorganized and unannounced price increases and fee increases are a problem. topic.
“Is the price increase fair, public, and transparent? This is a problem for shipping lines, logistics business,… need to solve. In particular, there is the role of the state to ensure the rights of weaker businesses in the chain import and export This”Mr. Dau Anh Tuan emphasized.
Mr. Dau Anh Tuan proposed that in addition to publicizing shipping companies’ prices, there should be a common information portal for shipping companies to publicize prices to businesses. Besides, it is necessary to further strengthen links between export industries. Promote market information work, the seller and buyer markets must have equal strength…
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| Mr. Tran Thanh Hai – Deputy Director of the Import-Export Department (Ministry of Industry and Trade) spoke at the meeting |
Speaking at the conclusion of the meeting, Mr. Tran Thanh Hai – Deputy Director of the Import-Export Department (Ministry of Industry and Trade) – said that the Import-Export Department and co-chairing units as well as relevant ministries and branches will absorb , research information and suggestions from units, and at the same time monitor and closely follow the situation to advise leaders of relevant ministries and branches as well as report to higher levels for solutions. Necessary support measures for businesses.
As for shipping lines, Mr. Tran Thanh Hai suggested that in the current context, it is necessary to maintain routes and bring back empty containers to ensure import-export activities for Vietnamese businesses. At the same time, strictly comply with regulations on listing, fares and surcharges.
Consider the possibility of multimodal transport such as rail, sea and air. This requires the combination of many different transport units to overcome the impact of Red Sea tensions.
“Regarding the issue of toll collection that has not been listed or announced, it is recommended that associations and industries report it to the Vietnam Maritime Administration so it can be handled,” Mr. Tran Thanh Hai said.
Associations and industries need to continue to closely follow the situation and coordinate with ministries, branches, and logistics businesses to support and help import-export businesses in international trade activities. Import-export businesses also need to closely monitor the situation and proactively respond.
According to Congthuong.vn
