Freight increase puts shippers on tenterhooks

  • March 31, 2014

The further shipping freight increase announced by shipping agents have worried goods owners, who fear that this would lead to higher costs and lower competitiveness of Vietnamese products.

Freight, shippers, cargo

Shipping agents, one after another, have informed that they would raise the haulage by hundreds of dollars for every container of goods they ship from/to Vietnam to/from the EU, US and Australia.

Hapag-Lloyd has decided that from April 1, the freight for the goods to be shipped from Vietnam to the US and Canada would be raised by $240 per 20 foot container and $300 per 40 foot container

Cosco and US Lines, the two container shipping firms have also informed the similar transport cost increases.

As for the goods from the US or Canada to Vietnam, Hapag-Lloyd and other shipping firms plan to raise the freight by $40 and $100 per 20 foot and 40 foot container, respectively, commencing from April 15.

The carriage increases have also announced for other shipping routes. The exports from Asian countries, including Vietnam, to North European countries and Mediterranean countries would also be increasing by $150 per 20 foot container and $250 per 40 foot container from April 1.

The goods to be shipped from Vietnam to Australia would bear the carriage increase of $200-400 for 20 foot and 40 foot containers, respectively.

Explaining the freight increases, shipping agents said the current freight rates are not high enough to cover the operation costs and transport costs, including the expenses on fuels.

Meanwhile, the crude oil price in the world in January 9 – March 19 saw inconsiderable fluctuations of less than $100 per barrel.

According to the director of a foreign shipping agent headquartered in district 1 in HCM City, in fact, shipping agents decided to increase the freight to offset the losses they incur due to the redundant capacity which is forecast to last two more years.

“There is a big gap between the supply of container ships and the demand,” he noted.

Phan Thong, the Secretary General of the Vietnam Shippers’ Council (VNSC), said the freight increase has put goods owners on tenterhooks because this would lead to the higher costs.

He complained that there is still no reasonable mechanism to control the freight increases. In general, shipping agents only inform in advance about the freight increases, not about the other charges and surcharges. Goods owners, in most cases, do not know why the surcharges are imposed and how long they would exist.

Thong said VNSC has proposed to build up a reasonable mechanism to control the setting of freight and surcharges. This would help prevent shipping firms from colluding with each other to raise the freight.

In principle, the freight and surcharges are negotiable between the goods owners and shipping firms. However, the pricing mechanisms need to be made transparent and registered with state management agencies. VNSC would conduct negotiations with shipping agents and supervise the implementation of the agreements to protect the benefits of Vietnamese goods owners.



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