The Vietnam Chamber of Commerce and Industry (VCCI) has proposed an inter-ministerial working group be founded to tackle the container shortages and stabilise logistics fees which have skyrocketed recently.
|Lach Huyen Port in Hai Phong City. (Photo: VNA)|
This was one among the proposals VCCI sent to the Ministry of Planning and Investment regarding the project to support the Vietnamese economy in the current situation.
VCCI said that logistics costs saw strong increases from 2020, coupled with an increasingly severe shortage of containers.
For example, transportation fees from Vietnam to Southampton, the UK, increased from 1,600 USD in early 2020 to 5,000 USD in December and now 9,100 USD per container.
The transportation fees to Los Angeles, the US, rose from 1,800 USD in early 2020 to around 8,000 USD currently.
The shortage of containers also caused delays in shipments which caused rising costs for container storage at ports and even cancellations of orders. The situation worsened after the Suez Canal blockage in March as well as congestion at ports, according to VCCI.
VCCI pointed out that these problems were threatening to cause disruptions in the supply chains of many industries and push enterprises into a lot of difficulties.
It was necessary that the Ministry of Transport and the Ministry of Industry and Trade establish a working group to remove difficulties for enterprises and tackle the container shortage, VCCI said, adding that the working group should work closely with industry associations, ports and shipping lines to raise solutions to prevent manipulation which was pushing up transportation fees.
VCCI also proposed measures to improve the advantages of preferential tariffs in free trade agreements (FTAs) to boost imports and exports as well as tackling problems related to origin rules.
VCCI said that the percentage of revenue of export products that enjoyed preferential tariffs in FTAs in the country’s total export revenue remained low and were on a downward trend in recent years, from 39 per cent in 2018 to 33 per cent in 2020.
Firms had not fully taken advantage of preferential tariffs in recent FTAs such as the Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP) and the EU – Vietnam FTA (UKVFTA), partly due to the lack of awareness about origin rules.
The Ministry of Industry and Trade should establish a working group about origin rules to provide consultancy to enterprises and enable them to take advantage of FTAs to promote exports.
Another solution was hastening the streamlining of administrative procedures to create favourable conditions for businesses.
As the COVID-19 pandemic was heavily affecting enterprises, VCCI said that the Government should enhance the efficiency and practicality of support policies to aid enterprises to overcome the difficult time. The support policies should focus on sectors which were hit hard by the virus as well as small and medium – sized enterprises.
Regulations that might push up costs for enterprises at this moment should be delayed to a more appropriate time, VCCI said.
The COVID-19 health crisis and resulting wide-ranging and deeply-felt economic upheaval has flipped the logistics industry on its head, leaving ill-protected freight firms in dire need of emergency State support to survive hardships.