The outbreak of the epidemic caused global trade to decline, production stagnated, and all kinds of shipping ships also fell into a shortage of goods for transport. Rates have been falling for a long time. However, by the end of 2020 and early 2021, the sea transport routes are moving to increase freight rates.
Shipping charges increased by 400%
Around November 2020, the market was scarce empty containers due to backlog at ports in China or Europe, because factories restricted production or closed due to disease. As the routes do not have enough empty containers to store exports, shipping lines have increased rates. Some markets such as Vietnam to Europe have sometimes increased rates by nearly 300%. Some ports from China at normal times have container freight rates below 1,000 USD including all fees, sometimes up to more than 2,000 USD when the goods are imported to Vietnam. There was a time when the freight rate increased by about 400%.
After the container ship freight increased and gradually stabilized at a relatively high level, the freight for bulk cargo ships also increased. Since the Lunar New Year up to now, the international bulk shipping rate has continuously increased. Currently, the chart of the BDI is at 2,178 points. The Vietnam stone goods route exported to Singapore in the years 2019-2020, even close to the Lunar New Year, still has the fare from only 3-5 USD / MT. Currently, the freight rate has increased to more than 7-8 USD / MT and there is still no train to run. Therefore, this transport line has temporarily stopped.
| After the container ship freight increased and gradually stabilized at a relatively high level, the freight for bulk cargo ships also increased. Photo: Quy Hoa |
For gypsum imports from Oman to Vietnam, Indonesia or Malaysia, if a few years ago until the end of 2020, the freight rate was only 12-14 USD / MT for ships of 50,000 DWT size, up to 28. New USD ships. With this price, the cement factories are not profitable due to the signed export contract.
The price of goods increased.
Ms. Huynh Thi My, General Secretary of the Vietnam Plastic Association, said the increase of sea freight by 3-4 times in recent years has seriously affected enterprises in the plastic industry, reducing export sales. Along with a number of other reasons has pushed production costs in Vietnam no longer as cheap as before.
Vietnam’s import and export activities are completely dependent on foreign shipping lines such as Maersk, CMA CGM, Wan Hai, ONE, Cosco, and OOCL. Therefore, the decision on rates is in the hands of foreign firms.
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Although the cargo lines in Southeast Asia and East Asia have still increased, they have not actually increased as much as the routes of Central Asia, Africa, Europe … If the ship charter price of 50,000 DWT in Southeast Asia is from 28,000-32,000 USD / day. , for Central Asia, the Black Sea must be up to 38,000 USD / day to charter a ship.
Due to the start of the hot season in many Asian countries, where there are many coal-fired power plants, the demand for coal is therefore very high. Coal demand can not be reduced or reduced, because it must run thermal power plants if there is no power outage, and production stagnates.
The petroleum market is at a high level, pushing up shipping costs. The incident that the Ever Given vessel was stuck, lying across the Suez Canal caused congestion, leaving more than 300 ships waiting on both the East and West coasts of the canal. Some other ships have to detour through Cape of Good Vong, causing the cost to increase sharply. Although the ship was rescued will also cause the freight rate to skyrocket, the cost of insurance will increase, the cost of goods will also increase.
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Currently, some commodities have started to increase in prices such as plaster. In recent years, the amount of gypsum imported to Vietnam is quite diverse such as from Laos, Thailand, and Oman, but due to the sharp increase in freight rates, the volume of imports from Oman has decreased significantly, making suppliers in Laos and Thailand also urgently raised prices. Cement products also started to increase prices due to increased input materials. The price of electricity increased, the price of coal increased, the price of oil increased, the cost of transportation increased … made the cost of cement products in factories also started to increase. The high price of fuel, especially the price of coal, makes the electricity price increase proportionally. Once electricity prices rise, most basic consumer goods are forced to follow suit.
Shipping is always a testament to the world economy. When shipping is difficult, the global economy also suffers. The cost of seagoing ships increased rapidly, hindering economic recovery. Meanwhile, the Vietnamese market openness in the global economy is currently very large. Certainly, Vietnam will be affected because the ship freight rate crisis in the coming time is inevitable.
According to the researcher
