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VietNamNews

Shipping costs to decrease

Update: March, 29/2012 - 10:30

 

A freighter of the Khanh Hoa-based Huyndai-Vinashin Shipyard Co sits at dock. — VNA/VNS Photo The Duyet
HA NOI — The Viet Nam Association of Seafood Exporters and Producers (VASEP) early this week proposed the Ministry of Industry and Trade and relevant bodies to reduce freight costs to ease the burden on seafood exporters.

The proposal, which was also sent to the Viet Nam Seaport Association and the Viet Nam Shipping Council, was made in the wake of a recent acceleration in freight fees, especially for shipments to the EU and US.

VASEP said Viet Nam's ocean freight costs had increased by US$240-800 per foreign port since early this month. The hikes would continue in the next two months as shipping companies announced that from April 1, they would begin charging containers shipped to European ports with a general rate increase (GRI) of $400 per 20-foot container. On May 1, the same GRI will be applied on goods shipped to the US.

Therefore, ocean freight costs will skyrocket by $640-1,200 per 20-foot container in the three months from March to May, VASEP said.

Shipping costs in Viet Nam are currently 10-15 per cent higher than those in other regional countries including Thailand and the Philippines.

VASEP general secretary Truong Dinh Hoe said the freight hike would have a significant negative impact on the competitiveness of Viet Nam's exports, especially to the EU and US, its two largest seafood importers. Export value to the markets accounted for 42 per cent of total export revenue last year.

Exporters said the new charges would have a significant impact on their export performance and may even result in losses.

General director of the Hung Vuong Seafood Co Duong Ngoc Minh said that his company had been required to pay an additional $1,000 per container since early this month. It exports 450 containers of goods to the EU, US and South America monthly.

Domestic exporters who signed export contracts prior to application of the new charges would suffer much higher losses, Minh said.

Deputy director of the Kim Anh Seafood Import Export Co Do Ngoc Tai said the competitiveness of Vietnamese seafood exports would be restricted as domestic exporters would be forced to raise export prices.

Sectors with a high volume of exports to the EU and US such as footwear, garments and agricultural products were also concerned about the fee hike.

Chairman of the Viet Nam Cashew Association Nguyen Thai Hoc said the new freight charges would have a significant impact on domestic cashew exporters who shipped roughly 41,500 containers to foreign markets yearly.

Shipping companies said they had to raise the freight fees due to rising input costs, including petrol and oil price hikes, adding that they would suffer big losses or even bankruptcy if freight fees remained steady.

In response, domestic exporters said that both exporters and shipping companies were facing difficulties so the latter should develop suitable fee increase schedules to make the transition more reasonable. — VNS

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