Shipping lines do not transparently list freight rates

VCN - The Vietnam Maritime Administration has just reported to the Ministry of Transport the results of an interdisciplinary inspection team on shipping rates and surcharges at a number of foreign shipping lines operating in Vietnam.
Unloading goods at Quy Nhon port. Photo: T.Tung/TTXVN
Unloading goods at Quy Nhon port. Photo: T.Tung/TTXVN

Loading and unloading surcharges account for the largest proportion

According to the Vietnam Maritime Administration, sea freight rates by containers began to increase sharply from October 2020, especially on routes to Europe and North America. In April 2021, the freight rate from Vietnam to Europe is US$6,500 - 8,000 per 40ft container and to America is US$6,000 - 7,000 per 20ft container, an increase of 5 to 7 times compared to last year.

The reason for the increase in freight rates is that the Chinese market recovered after the pandemic, so a large number of empty containers were sent to China, causing demand to outstrip supply, pushing up container shipping prices, affecting the whole Asian region, including Vietnam.

The inspection results of the Inter-sectoral Inspection Working Group established by the Vietnam Maritime Administration showed that the shipping lines all listed freight rates on the website but did not show the listing time, so it was impossible to know exactly if these businesses have complied with the regulations of listing 15 days before the price change.

Listed freight rates are ceiling prices, but contracts with customers are not disclosed by shipping lines. For small shippers without long-term contracts, the freight rates are set according to the market.

In addition to increasing freight rates, each shipping line also imposes 3-5 types of surcharges such as loading and unloading fees at ports, container cleaning, documents; in which, the loading and unloading surcharge accounts for the largest proportion, ranging from US$100 - 170 per container and is being imported by all nine shipping lines. There are irregular fees applied by each shipping company such as fuel surcharges, service charges for import and export goods only applied by Maersk.

These types of surcharges are introduced by the shipping line without an agreement with the customer, without stating the reason for collection and the time of termination. Some fees such as Verified Gross Mass (VGM) cost US$30-50, while shipping lines do not charge for this service. The shipping lines' surcharges do not have to be registered with the state agency, so it is difficult to monitor them.

Proposing service price management solutions

Vietnam currently has about 40 foreign shipping lines operating regularly, making up 95% of Vietnam's import and export freight transport market share. For routes to Europe and North America, because the Vietnamese fleet is not yet powerful enough to exploit them, the entire transportation market share is under the control of foreign shipping lines.

However, it is worth noting that all nine foreign shipping lines have representatives in Vietnam in the form of 100% foreign-owned enterprises, performing business activities on behalf of shipping lines and acting as contract agents. Revenue from freight rates and other surcharges according to the price is transferred to the parent company in foreign countries. Shipping lines pay contractor taxes and other taxes and fees in accordance with Vietnamese law. The right to decide on freight rates belongs to the parent company abroad, the representative companies in Vietnam only play the role of collecting, paying and consulting, not deciding the rates and the increase or decrease of freight rates.

For routes to Europe and America, the percentage of containers directly booked from Vietnam with shipping lines is very low (only 10% for routes to North America, 20% for routes to Europe) and mostly done through forwarding companies, agents, logistics. Contracting for transport and paying for freight is usually undertaken by a foreign partner (buyer or seller). Only a few large shippers in Vietnam sign direct contracts with foreign firms due to the stable volume of import and export goods.

According to the report of the inter-industry inspection team, the market share of Vietnam's freight exports to Europe and North America depends entirely on foreign shipping lines. The policies on freight rates and surcharges are also decided by shipping lines. Vietnamese shippers are small in scale, with seasonal demand, so they do not have plans to sign long-term transport contracts, leading to many risks when the transportation market fluctuates.

Under this situation, the Vietnam Maritime Administration proposed the Ministry of Finance to consider amending regulations on freight rates and other surcharges in addition to freight rates of shipping lines for shippers at Vietnamese ports to suit reality.

At the same time, it is proposed to the Ministry of Transport to supplement regulations, such as foreign shipping lines must register transport routes, schedules, and cargo volumes in Vietnam to avoid the shipping lines arbitrarily delaying or cancelling the reservation causing damage to the exporter. Adding penalties for violations of regulations on price declaration and listing.

By Xuan Thao/ Kieu Oanh

Related News

Managing price effectively, reducing pressure on inflation

Managing price effectively, reducing pressure on inflation

VCN - Timely and effective price management helps control the consumer price index (CPI) and inflation in accordance with the set target.
Proactively forecast and carefully consider when to adjust prices

Proactively forecast and carefully consider when to adjust prices

VCN - In price management, the Government and the Ministry of Finance strongly require the implementation of solutions to stabilize market prices, along with public and transparent price declaration activities and not unreasonably increase prices of goods and services.
Closely monitoring fluctuations to calculate the appropriate time to adjust prices

Closely monitoring fluctuations to calculate the appropriate time to adjust prices

VCN - According to a report from the Ministry of Finance, in the second quarter and the remaining months of 2024, price management needs to ensure inflation control and continue to support the removal of difficulties for business.
Closely monitoring market fluctuations to consider appropriate time to adjust prices

Closely monitoring market fluctuations to consider appropriate time to adjust prices

VCN - According to a report from the Ministry of Finance, in the second quarter and the remaining months of 2024, price management and administration need to ensure good control of inflation and continue to remove difficulties for production and business.

Latest News

Import and export are expected to reach 800 billion USD

Import and export are expected to reach 800 billion USD

VCN - Although the import and export turnover of goods slowed down in September 2024, in general, import and export activities, especially exports, still grew positively in the first 9 months of 2024. It is expected that import and export of goods in 2024 will reach a record of 800 billion USD.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Rice exports likely to set new record in 2024

Rice exports likely to set new record in 2024

Vietnam sold 800,000 tonnes of rice overseas for 505 million USD in October, bringing the country's total export volume and value in the first ten months to nearly 7.8 million tonnes and 4.86 billion USD, up 10.2% and 23.4% year-on-year, respectively.
Vietnamese goods conquer halal market through trust and quality

Vietnamese goods conquer halal market through trust and quality

VCN - According to the Ministry of Agriculture and Rural Development, Vietnam's capacity to export over 50 billion USD worth of agricultural products annually, coupled with established supply chains, provides a significant advantage for Vietnamese agricultural and aquatic products to penetrate the Halal market.

More News

Exporters urged to have strategies to take advantage of UKVFTA for expansion

Exporters urged to have strategies to take advantage of UKVFTA for expansion

The UK is concerned by sustainable development, labour issues, environmental protection and social responsibility. Therefore, when exporting to the UK, enterprises should not just be concerned about being competitive in terms of price and quality.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Vietnam and UAE trade sees billion-dollar growth

Vietnam and UAE trade sees billion-dollar growth

VCN - According to General Department of Vietnam Customs by the end of September 2024, bilateral trade between Vietnam and the United Arab Emirates (UAE) reached nearly US$5 billion, an increase of more than US$1.4 billion over the same period last year.
Sharing responsibility for ensuring security and safety of the supply chain

Sharing responsibility for ensuring security and safety of the supply chain

VCN – Post - clearance audit is carried out in a planned, focused and key manner, avoiding widespread and ineffective inspections, thereby creating convenience for the business community and improving the effectiveness of state management of customs.
Many factors affecting tuna exports in the last months of the year

Many factors affecting tuna exports in the last months of the year

VCN - Tensions between Israel and Iran escalate, tuna businesses are worried, they may have to stop export orders to the Israeli market in the last months of the year.
Vietnam still dominates Philippine rice import

Vietnam still dominates Philippine rice import

Vietnam continues to assert its dominance as the top rice exporter to the Philippines, with 2.91 million tonnes shipped as of the late October, or over 79% of the Philippines' total rice imports, according to the Vietnam Trade Office in the Philippines.
Vietnam cements ties with partners to engage in global semiconductor, AI industries

Vietnam cements ties with partners to engage in global semiconductor, AI industries

By boosting cooperation with reputable partners across the globe, Vietnam is taking steps to gain a foothold in the world’s semiconductor and artificial intelligence (AI) industries.
Aquatic exports expected to rise in year-end despite challenges

Aquatic exports expected to rise in year-end despite challenges

Aquatic exports is expected to surge in the remaining months of this year, as the year-end festive season comes, despite many challenges in the international markets, according to insiders.
Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countries, thereby maintaining advantages and developing on "away grounds".
Read More

Your care

Latest Most read
Import and export are expected to reach 800 billion USD

Import and export are expected to reach 800 billion USD

VCN - At the regular Government meeting in September 2024, Minister of Industry and Trade Nguyen Hong Dien assessed: import and export continued to be a bright spot, recording a positive recovery compared to the same period last year.
Fresh coconuts quenching new overseas markets

Fresh coconuts quenching new overseas markets

Vietnam’s fresh coconuts are being increasingly consumed in international markets such as the US, China, and the UK, highlighting a bright spot in Vietnam's fruit export sector with many opportunities for breakthroughs in the near future.
Rice exports likely to set new record in 2024

Rice exports likely to set new record in 2024

Vietnam sold 800,000 tonnes of rice overseas for 505 million USD in October, bringing the country's total export volume and value in the first ten months to nearly 7.8 million tonnes and 4.86 billion USD, up 10.2% and 23.4% year-on-year, respectively.
Vietnamese goods conquer halal market through trust and quality

Vietnamese goods conquer halal market through trust and quality

According to the Ministry of Agriculture and Rural Development, Vietnamese agricultural and aquatic products could penetrate the Halal market.
Exporters urged to have strategies to take advantage of UKVFTA for expansion

Exporters urged to have strategies to take advantage of UKVFTA for expansion

The UK is concerned by sustainable development, labour issues, environmental protection and social responsibility. Therefore, when exporting to the UK, enterprises should not just be concerned about being competitive in terms of price and quality.
Mobile Version