Sea freight rates increase continuously

“Two months ago, the freight rate for 40-foot refrigerated containers from Cat Lai port (HCMC) to some European countries was on average $9,500, which was already very high compared to $1,600 per container in the same period last year. will continue to increase to 11,500 USD/container and is likely to increase even higher,” lamented Mr. Nguyen Xuan Chau, Chairman of the Board of Directors of Viet Long Saigon Joint Stock Company.

The more you do, the more you lose

With the situation of sea freight increasing constantly, Mr. Nguyen Xuan Chau said that each month, businesses only maintain exporting 3 40-foot containers so that workers can have jobs, maintain incomes, and support to buy raw materials. farmers as well as trying to keep their share in the market. “Manufacturing today is really making more and more losses. Long shipping time, difficult to improve, also makes the cash flow of businesses difficult. In addition, negotiating to adjust selling prices with foreign partners is almost impossible because of many regulations,” said Chau.

Mr. Dang Dinh Long, Chairman of the Board of Directors of Mega A Trading Investment Joint Stock Company, informed that the freight rates on August 19th jumped to an unprecedented high, 2 times higher than in March 2021. A 40-foot container transported across the West Coast (USA) costs $15,000, while on the East Coast of this country costs $18,000-20,000. Meanwhile, shipping freight to some European countries costs 8,000-9,000 USD/container. “At this time, not only are shipping rates high, but it is also difficult to book ships because China’s import and export activities are increasing again after the pandemic, causing a shortage of ships. Shipping lines prioritize shipping to neighboring countries instead of choosing Vietnam and other areas where the disease is spreading,” Long reflected.

An enterprise (who requested anonymity) is also being “executed” by the continuously increasing sea freight rates in the context of enterprises struggling to both prevent the epidemic and organize production. “At the beginning of the year, the freight rate for a 40-foot container was only about $4,500, gradually increased to $6,500, then $8,500, and now it’s $15,000. Not to mention, we had to deposit at least 300 USD without being sure if we could rent a boat or not. If the ship cannot be rented, the import partner will claim compensation, the damage will increase many times,” said the owner of this business.

According to the Vietnam Pepper Association (VPA), as of mid-August, the shortage of empty containers has cooled down, but freight rates continue to increase, especially in the US market. Compared to the beginning of 2020, the freight rate for shipping to this country increased by about 10 times, from $2,000-3,000 to $20,000/40-foot container. The biggest difficulty for businesses is that the US market always buys goods with CNF (the seller has to pay for shipping to the nearest port to the buyer – PV), so all risks of shipping costs are borne by Vietnamese enterprises. bear. “The term of the delivery contract is about 1 month or more, which is enough for businesses to be proactive about the source of goods, but it is likely that they cannot find a place on the ship or when they find it, the shipping fee has increased. With this freight rate, Vietnamese agricultural products are losing competitiveness. For example, American customers have recently switched to buying pepper from Brazil because the quality is not much different from Vietnam, but the shipping cost is only 1/3 of that from Vietnam “- a representative of VPA analyzed.

Doubt the shipping company makes the price

According to calculations by Mr. Tran Van Linh, Chairman of the Board of Directors of Thuan Phuoc Seafood and Trading Joint Stock Company (Da Nang), with the value of 1 container of goods exported to the EU about 100,000 USD, transportation costs accounted for 12%. -15%. Meanwhile, the maximum profit from the necessities business is only about 10%. Thus, the current shipping freight has eaten into the profits of enterprises because it is difficult to increase the selling price in the context of weak purchasing power in import markets. “It is true that the cost of shipping lines has increased due to the impact of the epidemic, but a 5-10 times increase in freight rates is too unreasonable. It is not excluded that shipping lines abuse their monopoly position to maximize profits. In fact, countries are now paying much attention to the hot issue of fighting the epidemic, so the story of freight rates is considered an economic issue. golden opportunity” to increase prices. On the other hand, shipping lines have gone through the process of buying, selling, merging, and narrowing the clues, so it is easier to implement “implicit links” in simultaneously raising prices, “- Mr. Linh asked.

Ms. Ngo Tuong Vy, Deputy Director of Chanh Thu Fruit Import-Export Company (Ben Tre), also pointed out that the galloping increase in shipping charges has greatly affected farmers’ consumption of agricultural products. If enterprises purchasing agricultural products increase their selling prices, American customers can switch to buying Thai fruits with the policy of subsidizing freight for export enterprises. Therefore, there is no other way, enterprises will lower the purchase price of farmers. “Not only increasing freight rates, some shipping lines are now reducing or refusing to carry cold goods, prioritizing dry goods, making fruit export even more difficult. It is urgent that the authorities step in strongly, request shipping lines to be transparent about freight rates and stop the unreasonable increase in freight rates for a long time,” Vy said.