In recent months, rising sea freight rates have put great pressure on export businesses. Since 2021, export businesses have been facing continuous difficulties due to freight rates and transportation costs. Notably, at one point freight rates increased by up to 5 times, causing businesses to suffer due to increased transportation costs.
If in 2021, shipping rates had "peaked" many times due to the lack of empty containers, the difficulties of the Covid pandemic strongly affected the world, then in 2022, the impact of the war between Russia and Ukraine caused shipping rates to increase continuously. These difficulties continued and by early 2024, the tension in the Red Sea caused shipping rates and a series of surcharges to continue to increase.
According to businesses, shipping costs from Vietnam to the above markets are currently around 4,000 - 4,500 USD/container and are subject to surcharges of around 1,500 - 3,000 USD/container. Calculating the total cost paid for a container of goods in the past month, shipping costs to the West Coast of the US are increasing by 70%, but frozen goods to Europe are increasing by nearly 4 times.
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| Freight rates continue to rise |
Notably, while the difficulties caused by high freight rates have not yet ended, shipping lines have recently arbitrarily increased fees and surcharges. In a petition sent to the Ministry of Transport, the Ministry of Finance, the Ministry of Industry and Trade, the Price Management Department (Ministry of Finance) and the Vietnam Maritime Administration regarding strengthening the management of surcharges of foreign shipping lines, the Vietnam Shippers Association said that for many years, foreign shipping lines have arbitrarily collected dozens of different types of fees and surcharges on goods of Vietnamese import-export enterprises.
Not only that, shipping lines also continuously increase these fees and surcharges without basis, basis, and without complying with the regulations of the State management agency. The increases are mostly much higher than the container loading and unloading fees that shipping lines pay back to Vietnamese seaports.
According to the latest update, when Circular 39/2023/TT-BGTVT of the Ministry of Transport adjusting prices for pilotage services, use of bridges, wharves, mooring buoys, container loading and unloading, and towing was issued on December 25, 2023, taking effect from February 15, 2024, from the beginning of February 2024, all foreign shipping lines announced an increase of 10 - 20% in THC (Terminal Handling Charge - port handling surcharge) for each type of container service in Vietnam.
It is worth noting that this fee increase only applies to Vietnam, while other countries in the region have not yet made any moves to increase it. In particular, if considered in absolute terms, the 10-20% increase in THC fees of shipping lines is 3 times higher than the adjustment of container loading and unloading prices at Vietnamese seaports. The Vietnam Shippers Association also added that this is not the first time THC adjustments have been made. This raises the question of whether shipping lines are colluding to "squeeze" prices from Vietnamese shippers right at home?
In fact, from 2021 to now, many Vietnamese export enterprises have reflected that there are too many factors pushing logistics costs up, significantly affecting the competitiveness of enterprises in the world market. Many orders of Vietnamese enterprises have been canceled, delayed delivery, delayed payment and unable to sign new orders. However, Vietnamese enterprises have almost no choice because in terms of international shipping, the Vietnamese shipping fleet is currently only responsible for transporting about 10% of the market share, mainly transporting routes such as: China, Japan, Korea and Southeast Asia. Vietnam's export activities to major markets such as the US, EU... depend almost entirely on foreign shipping lines.
According to experts, to minimize the situation of being "squeezed" by businesses right at home, Vietnam needs a fleet of container ships to participate in long-distance transportation and gradually gain market share, contributing to changing the current practice of buying CIF and selling FOB (common delivery terms). The formation of a strong container fleet not only limits the squeeze of foreign shipping lines on freight rates and surcharges, but in the long term is a tool to ensure the country's economic security, effectively implementing the free trade agreements that Vietnam has signed with the EU, the US, South Korea, Japan, etc.
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