Transport charges burden businesses

Businesses complain that port fees, transport charges and taxes all have increased, pushing up the price of the goods they sell and depressing profits.

Goods prices up because of higher fees

Kevin Tho, a food importer in HCM City, told reporters from Tuoi Tre that the price of imported chicken has increased by eight to ten percent compared to the previous year. His supplier blames higher shipping fees.

According to Tho, since the shipping fee has jumped, the import chicken price has also jumped by $80-100 per tonne. However, to Tho’s dismay, the retail price of chicken remains stable thanks to profuse supply.

Khong Van Trung, who specializes in importing materials to supply sweets manufacturers in HCM City, also said that the wholesale prices of materials have increased by five percent, mostly due to higher transport charges.

Meanwhile, according to Do Thi Kim Loan, Director of Sao Nam, a furniture maker in Binh Duong province, though the company exports products under the FOB mode (free on board), which means that the importer designates shipping agents and pays shipping fees, the company’s two containers of wooden furniture headed to the UK on May 17 have also been influenced by the higher transport costs.

“If the shipping fee had not increased, we could quote a higher export price,” she explained

Ngoc Lien, the owner of a factory that processes food for export to the US, also said that the two foreign partners have forced her company to share the higher shipping costs. If she agrees with the two partners’ request, the company will have to lower its export prices by $700-800 per container of export goods.

Businesses suffer

Though in principle, businesses can pass through higher transport costs to clients, transport firms still complain that they are suffering heavily.

A manager at Gia Huy Trucking, which has been operational for only four months, complained that there are too many kinds of fees.

Because of the petrol price increase alone, the company has to raise the transport charges by 10 percent since it began operations. Further, the company must now collect ten percent in value added tax, up from five. “We are getting tired of having to explain to clients about the increases of the fees,” the Gia Huy executive said.

Some container trucking companies say that the domestic transport cost has gone up by 20 percent since the end of 2009.

Nguyen Thanh Tuan, Director of Hop Thanh Cong Trading and Trucking Company, blames cost increases on oil price increases and higher value added tax, which is are beyond the firms’ control.

At some ports in HCM City, a lot of fees have increased since April 1. At Hung Thinh Trade and Construction Co., a manager said that he has had to pay 2.47 million dong worth of fees of different kinds for a container of goods which arrived several days ago. These include a document fee, container cleaning fee, and storage fee.

Exports from HCM City ports have also been heavily influenced by higher shipping fees. Since the beginning of the year, a lot of shipping agents have announced shipping fee increases, put into effect beginning in late March.

Most recently, the Japanese container carrier MOL has announced that it will increase fees and collect surcharges during the high season that begins June 1. The increases are between $160 and $300 per standard 40 foot container.

In general, the transport costs have risen 20 percent since late 2009 and are double what they were a year ago.

Tuoi tre

Tags: vietnam logistics, Vietnam Transport charges, Vietnam transportation