Rise in freight costs creates burden on Vietnam seafood exporters

Other 08:18 13/09/2014 502
(vasep.com.vn) In February 2014, shipping companies informed that they would raise ocean freight costs for shipments to EU, America and Middle East. Since March 1st, freight fees for consignments to EU increased to US$700 per teu; US$500 per teu for shipments to Middle East; US$300 – 400 for cargoes to America.

Transportation company Hapag-Lloyd have recently announced that from April 1st 2014, they would charge goods from Vietnam to the U.S. and Canada with an increase of US$240 per a 20-foot container; US$300 per 40-foot one. At the same time, container shipping lines like Cosco and U.S.Lines also reported a similar hike in freight fees for the same lines. Since April 15th, freight charged on shipments from the U.S. and Canada to Vietnam is expected to hike from US$40-100 for a 20 foot or 40 foot container.

Freight charges for shipments from Asian countries including Vietnam to Nordic and Mediterranean countries will surge to US$150 for 20 foot container and US$250 for 40 foot container since the early this month. Freight costs for cargoes from Vietnam to Australia will increase to US$200 – 400 per a 20 or 40 foot container.

Since the early year, continuous acceleration in freight charges by shipping companies as well as rise in other costs have created more challenges for Vietnam seafood exporters.

 Currently, 90 percent of total goods shipped from Vietnam is transported by foreign shipping companies. The rest of 10 percent is shipped by domestic transportation companies. 100 percent of goods shipped by containers are transported by foreign shipping companies, Mr. Do Xuan Quynh, General Secretary of Vietnam Shipowners' Association(VSA) said.

Since April 1st, with 30 percent hike in freight costs to EU as informed by shipping companies, an exporter with 200 containers of exported goods must pay further VND4 billion per month. Payment by a large exporter with 400-450 containers will be doubled. Besides, exporters must face unreasonable hikes in other costs, some seafood exporters based in Ba Ria-Vung Tau province commented.

According to a large pangasius exporter, if a container must pay US$700 – 1,000 for freight cost, the price of 1 kilogram of pangasius will be forced to increase to 15-20 cent. While it is hard for exporters to increase fish prices at the current time.

Shipping costs for a 20 foot container in Viet Nam are currently 10-15 percent higher than those in other regional countries including Thailand and the Philippines. While export price is unchanged or even requested to reduce by the buyers. This creates more difficulties for seafood exporters.

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