Container rental prices increased dramatically
At the meeting on the recent increase in the price of container freight by sea, the Vietnam Maritime Administration (the Ministry of Transport) and the Import-Export Department (the Ministry of Industry and Trade) co-chaired the afternoon 12 / 1/2021, many shippers in the seafood, plastic and pressing wood industries: Over the past three months, the rental price of empty containers has continuously increased, from an initial level of less than $ 1,000 per 40-foot container now has increased the price to 8,000 USD, even 10,000 USD / 40 feet container goes to the UK market. This is an unreasonable increase and shipping lines need to have the transparency of price information, as well as the increase to be more appropriate.
Ms. Huynh Thi My – General Secretary of the Vietnam Plastic Association (VPA) said: The increase of sea freight by 3-4 times in the past time has seriously affected businesses in the plastic industry, reducing export sales. Currently, there is 1 Indian enterprise in the Vietnam – Singapore industrial park specializing in the production of export yarn announced to close the factory in December 2020. The reason that this enterprise gives is because the shipping cost is too high, affecting export activities and production costs in Vietnam are no longer as cheap as before. Therefore, the enterprise has suspended all orders since December 2020.
Due to high sea freight, many other plastic companies have had to sell almost unprofitable goods, but the output is still very slow, the amount of inventories compared to this time last year is up to 50%.
Regarding the increase in container freight rates, the representatives of shipping lines explained that due to the disease, the release of goods and empty container rotation were prolonged. In addition, the volume of goods exported to Europe and the US increased suddenly, leading to a lack of empty containers for packing.
Some shipping lines said that they did not cut trips from Vietnam, even increased flights, but due to the severe shortage of containers leading to the current situation. The shipping lines also said that this situation at least lasted until the end of March 2021 or even the second quarter of 2021 if the Covid-19 epidemic was still complicated.
In response, shipping lines proposed: Authorities should consider solving thousands of derelict containers at ports to “source” empty containers for export.
Shipping rates should be transparent
According to Mr. Hoang Hong Giang – Deputy Director of Vietnam Maritime Administration, right after receiving complaints from exporters about unreasonable price increases of shipping lines, this Department issued a written request to shipping lines. strictly implement the price listing. At the same time, the Maritime Bureau has coordinated with the Import and Export Department (Ministry of Industry and Trade) to hold a meeting with shipping lines, shippers and associations in the North in December 2020. However, after more than 2 weeks, shipping lines have not yet sent a written report to the Vietnam Maritime Administration.
“I believe that the increase in the rate of renting empty containers for packing is the supply and demand of the market, but shipping lines need to comply with the request of the Maritime Administration in transparency of prices. Particularly for the proposed responses such as clearance of backlogged containers at the port… we will have appropriate considerations ”- Mr. Hoang Hong Giang said.
On the side of the Ministry of Industry and Trade, Mr. Tran Thanh Hai, Deputy Director of the Import and Export Department, affirmed that: The high rise in shipping rates and empty container rental rates strongly affected import and export activities, especially exports. The relationship between the ship owner and the shipper is an interdependent relationship, and shipping lines need to make freight rates transparent and share costs with shippers to avoid excessive price increases. “The Ministry of Industry and Trade and the Ministry of Transport will report to the Prime Minister on this issue to ensure the harmonious interests of the parties” – Mr. Tran Thanh Hai emphasized.
In addition, Mr. Hai also recommended that exporting enterprises need to prepare for the situation of the shortage of containers that may prolong in the context of the uncontrolled Covid-19 epidemic in many parts of the world, to have a plan to hand exchange with partners to extend the delivery schedule, and at the same time study the carriage to Europe by rail to avoid dependence on sea.
Le Kim Lien