Shipping companies continue to raise fees, businesses face more difficulties

Many container shipping companies have announced further increases in freight charges from late May, causing difficulties for import-export businesses.

Six months after a global container shortage drove up shipping costs, import and export companies expected costs to be reduced thanks to vaccination campaigns that have helped to control COVID-19.

However, experts said it would be very difficult for container shipping costs to return to pre-pandemic levels despite the successful containment of the virus and no severe container shortage.

But starting in mid-May, several container shipping companies announced increases in freight charges from $400 to more than $1,000 per container.

Germany’s Hapag-Lloyd has raised the General Rate Increase (GRI) for East Asian routes (including Vietnam) to the US and Canada to US$960 per 20ft container and $1,200 per 40ft container from May 15.

US shipping company CMA CGM has announced a freight rate increase from mid-May for routes from Somalia to Northern Europe, the Mediterranean, the Black Sea, India and Pakistan.

Swiss shipping company MSC has increased siping surcharges to US$800 per container from May 18.

Duong Thanh Lan, deputy director of Blue Sea Cargo Logistics Transport Corporation, said freight rates for the route to the United States had seen the biggest increases.

In April, popular freight rates to the US West Coast were around $5,000 per 40ft container. However, the quote is now above 10,000 USD.

Freight rates to Europe continued to increase steadily and were also at high levels.

Route fares from Vietnam to Europe were now around USD 7,000-8,000 and to the United States over USD 10,000 compared to USD 1,500 and under USD 1,000 in pre-pandemic times, respectively .

Thanh said shipping lines said this was due to inventory at ports as companies wanted to speed up shipments, especially to the United States, which drove up transport demand as well as freight rates.

Tran Van Linh, chairman of Thuan Phuoc Seafood and Trading Corporation, said shipping costs were not at unreasonably high levels, but import-export businesses like his had no other choice. than to accept increases.

Halting import and export business was impossible due to commitments to partners, Linh said, adding that canceling orders or not meeting delivery deadlines would undermine the company’s prestige and its efforts to find customers in the future.

Truong Tien Dung, director of Sai Gon Aquatic Products Trading Joint Stock Company, said high shipping costs were weighing on import and export businesses, with many small businesses forced to close or temporarily halt their operations. activities.

Despite increased freight costs, it would be impossible to negotiate product price increases as the COVID-19 pandemic has forced consumers in markets like the US and EU to tighten their budgets and focus mainly on essential goods and commodities at reasonable prices, Dung said. .

High transportation costs are eating away at corporate profits, he pointed out.
Source: Vietnam More