Shipping charges sink firms’ hopes

Foreign shipping firms’ high surcharges will continue hurting Vietnam’s enterprises amid shortages of state management protection mechanisms.

Nguyen Hong Truong, Deputy Minister of Transport, said foreign shipping firms’ collection of big surcharges would continue causing big woes to Vietnam’s exporters and importers. “This will consequently belittle the competitiveness of export-oriented, made-in-Vietnam goods,” he said.
According to an MoT report submitted to Prime Minister Nguyen Tan Dung on foreign firms’ surcharges imposed on local enterprises, local enterprises have been subject to over 10 types of surcharges since early last year. These include port congestion, terminal handling, container imbalance, container cleaning, container repairing and container procedure surcharges .
For example, terminal handling surcharge was theoretically collected by ports, at $20 and $35 for a 20-foot container and a 40-foot container, respectively. But since 2008, this surcharge has been collected by foreign shipping firms at $70 for a 20-foot container and $120 for a 40-foot container. Then the firms pay for the ports to earn the different cash amounts.
Meanwhile, container imbalance surcharge is being applied averagely at $50 for a 20-foot container and $100 for a 40-foot container. This surcharge is collected when import goods outnumbers export goods, meaning that the owners have to bear costs for carrying empty containers out of Vietnam.
Moreover, though container repairing costs should be covered by the shipping firms, Vietnam’s exporters and importers were the ones who paid. The former collected high loading and unloading surcharges from the latter, at $75 and $115 for a 20-foot container and a 40-foot container, respectively, according to the Ministry of Transport (MoT).
“All of these surcharges are different for shipping firms with different reasons. Thus, all local enterprises object to them. Such firms as Wanhai, Phoenix, and Evergreen are collecting these fees,” Truong said.
Local media reported that some firms like Hanjin and MSC had begun to augment their charges as from May, 2011 for goods exported to Europe, at $150-$300 for a 20-foot container. Besides, they also collected more assorted surcharges, at $150-$170 for a 20-foot container.
“The firms have often either given no notice to or notify local enterprises of surcharge hikes in a very short of time. This has pushed product prices up quickly, adversely affecting enterprises and Vietnam’s economy,” Truong said.
He said such surcharges were agreed on by the shipping firms and Vietnamese customers via specific contracts. “Besides shortages of locally-owned ships, there is no state supervision and management mechanism over the firm’s collection of such surcharges. Thus, the firms can unilaterally impose them on local enterprises.”
Vietnam is currently home to about 60 foreign shipping firms transporting 80-85 per cent of the country’s export and import goods. Vietnam has only 36 container-carrying ships, of which 27 are owned by the MoT’s Vietnam National Shipping Lines.
However, the shipping firms ascribed the high surcharges to low transport fees, which had made a dent in their pockets. For example, the fee for a 40-foot container to be transported from Vietnam to Singapore or Malaysia was $40 since late 2008, and $60 for the same container to be carried from Haiphong to Ho Chi Minh City.
AP Moller-Maersk Group chief executive officer Nils Smedegaard Andersen said the firms’ surcharges were “inevitable” given the world’s high fuel prices and soaring input material costs and such surcharges happened everywhere in the world.
However, Maersk Line Vietnam’s general director Peter Smidt-Nielsen said Maersk Line did not apply the surcharges and would not raise prices of any of its services in the Vietnamese market. – VIR

Tags: Vietnam shipping industry

Posted by VBN on May 30 2011. Filed under Transportation. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry