VietNamNet Bridge - A 70 percent increase in freight charges is expected to lead to a doubling or tripling of transport costs for seafood companies.

Foreign shipping firms, including Yang Ming, CMA CGM, OOCL and Wan Hai Vietnam, have announced increases in freight fees and surcharges starting April 1.

Nguyen Hoai Nam, deputy secretary general of the Vietnam Association of Seafood Exporters and Producers (VASEP), said the unreasonable charges and surcharges set by foreign firms are a financial burden for seafood export firms.

Foreign shipping firms raised the fees sharply in June 2014, when one 20-feet seafood dry container to the US was charged $2,300. In March this year, the fee rose by 70 percent to $3,900 per container.

Nguyen Van Kich, chair of Cafatex, said the company has to pay 15-20 percent of its revenue on transport costs, which means the 70 percent freight increase would triple transport costs.

“Seafood companies are dying,” Kich said. “Their business has shrunk because of high bank loan interest rates, input material price increases, and now freight increases.” 
The US is the largest export market for Vietnamese seafood exporters, which imports $1.5 billion a year, or 22 percent of total seafood export turnover. Europe is also a large market which consumes 50 percent of total seafood export turnover. 

The higher costs for carrying goods to the two markets will upset exporters’ plans. 

Kich emphasized that the charges and surcharges imposed by foreign shipping firms are unreasonable. CIC (container imbalance charge), for example, should be collected only when container imbalance occurs. Meanwhile, Vietnamese enterprises still have to pay $50 per 20-feet container and $100 per 40-feet container in SCIC to foreign shipping firms.

In many cases, Kich said, enterprises have to pay  fees higher than quoted. 

THC (terminal handling charges), for example,  quoted by port developers is $20-35 per 20-feet and 40-feet container, respectively. 

However, shipping firms, which collect money from goods owners to pay to port developers, require $60-120 per container.

The director of an enterprise said he cannot understand why shipping firms continue collecting unreasonable fees in front of state management agencies.

Deputy Minister of Transport Nguyen Van Cong has confirmed that many foreign shipping firms have raised fees and charges unreasonably, thus causing unhealthy competition. 

Deputy Chief Inspector of the Ministry of Finance Tran Huy Truong has said that finance officials will take inspection tours to 20 largest foreign shipping firms to clarify businesses’ complaints about unreasonable transport charges.

On March 18, Deputy Prime Minister Hoang Trung Hai requested relevant ministries to review the fee collection by foreign shipping firms and settle the problems in accordance with the Competition Law.

DDDN