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It is difficult to share "piece of cake" for transport of import and export

18:39 | 16/06/2018

VCN- The transport market for Vietnamese importers and exporters has long been considered a "big piece of cake" with full of attraction, however, this "pie" is largely in the hands of foreign shipping companies 

it is difficult to share piece of cake for transport of import and export
In order to develop, domestic transport enterprises need to improve their professionalism and build a closed process. Image: ST

It is difficult to win market share

According to Mr. Dam Quang Thang, General Director of Agrice Vietnam Company, the company is currently exporting fruit to markets such as Australia, Japan, Korea, China. However, whenever goods are released, Vietnam Agrice often chooses shipping companies from Thailand, Malaysia or Singapore at a cheaper price to save costs.

It is also a fact that Vietnam's import and export of some commodities with high transportation volume such as coal, steel, cement clinker, Vietnamese transport enterprises are almost impossible to approach. In particular, most of Vietnam's shipping businesses are small and medium-sized enterprises, their financial capacity and ability to provide services are limited, and prices are less competitive.

In assessing the fragmentation of Vietnam's small shipping companies, Le Duy Hiep, Chairman of Vietnam Association of Logistics Services (VLA), said for enterprises that are import-export companies such as agricultural production companies, they buy their own trucks instead of cooperating with specialized transportation companies. This "self-sufficiency" makes transport enterprises face many difficulties, it is not easy to get orders.

According to Nguyen Thuong Uyen, Deputy Director of Quang Ninh Seafood Import-Export Joint Stock Company, the export volume of the company is not too large, the export volume is mainly exported to Japan, so for transport problems the procedures at the port or customs have been resolved professionally and proficiently by the company’s staff.

In addition, although the processed seafood products need to be stored well, all the frozen and cold-keeping stages have been carried out by the Company and packaged right from the production to the port. The ship should go immediately, so it is not worried about maintenance, storage, or if there are problems, because port services will be used. Therefore, the Company only hires transportation services from the factory to the port due to the inability to purchase transportation vehicles.

The "barriers" of link

One of the difficulties faced by shipping companies is the paradox of port warehousing (THC), according to the Vietnam Port Association (VPA). Specifically, the cost of handling the cargo at the port is, according to the regulation, a cost item agreed by the container shipping alliance to apply to the importer in each market area and may be adjusted accordingly. Including potential risks arising in each period. However, in Vietnam, the amount of THC that the owner of import and export goods are subjected to now is twice as much as the actual shipping costs that shipping companies agreed to pay for the port under the stipulated floor frame, container shipping charge between port and ICDs, which the shipping company has been forced to place on behalf of the shipper (condition of CY delivery changed into CY / ICD condition in Vietnam market).

Notably, according to VPA, most import-export enterprises choose to transport their own business because of the need to be competitive. Also, handling foreign disputes and trade remedies in Vietnam are full of limitations and slow progress in the situation of economic and trade integration and has become more and more rapid and widespread, and regional and international competition is increasingly complicated.

At the same time, according to many experts, due to the limited quality of transportation services in Vietnam, the time of transport of fruit from harvest to export port is fairly long and requires items to be refrigerated. This makes Vietnamese transport enterprises less competitive with foreign shipping companies. Moreover, one disadvantage of inland transportation companies is that foreign partners do not understand much about them, in terms of price, and have legal and language differences. Therefore, foreign shipping companies are still the priority of choice.

Especially, nowadays, domestic transport enterprises still operate individually and disunited, they have not developed the model of package transport, have lack of linkage, so it is difficult to compete and create an advantageous position. In order to develop, domestic transportation enterprises need to improve their professionalism, build a closed process and promote a cooperation between small and medium enterprises. At the same time, it is necessary to build up a full-service package supply chain in order to make full use of opportunities for cooperation and development.

By Xuân Thảo/Bui Diep