According to the Vietnam Association of Seafood Exporters and Producers (VASEP), since the beginning of the year, freight rates have been continuously increasing, in some places increasing by nearly 6 times. Freight rates have increased rapidly, especially for long-distance shipments. For example, freight rates to Toronto or St. Petersburg have increased by 3 times compared to the end of 2020. Therefore, even though there are export orders, business profits have still decreased sharply.
"According to business estimates, since the beginning of this year, business profits have decreased by about 30-40% compared to the same period in 2020. Freight rates have increased a lot. The increase is very large compared to our previous profits. Even if we increase the price, we still cannot make up for such a large difference in freight rates," said Mr. Huynh Thanh Lin, representative of a seafood business in Khanh Hoa.
Many orders, businesses have produced products, but cannot export because they cannot rent empty containers, causing a lot of costs for storage and yard. In addition, if they cannot deliver on time, businesses will have to pay fines, usually from 5 to 10% of the value of the shipment.
"Not only are there difficulties with shipping costs, but also increased storage fees, labor and yard storage, increased bank fees, everything, increased transaction costs in the company, making seafood processing companies ineffective and making losses. In the first six months of this year, we faced losses but still tried to maintain production," said Ms. Nguyen Thi Thu Sac, General Director of Hai Nam Company Limited.
It is known that 90% of Vietnam's export goods still depend on foreign shipping lines, because there are no international logistics companies with trips to Europe and America. Therefore, the right to charter ships and pay freight rates belongs to foreign partners, so Vietnamese business owners cannot influence the price of the international transport chain.
Mr. Nguyen Hoai Nam, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), shared: "Currently, the alliance of foreign shipping lines is still dominating maritime transport. In the short term, businesses, including those in the seafood sector, must live with this difficulty."
To overcome this, large businesses often sign long-term shipping contracts. However, small and medium-sized businesses with limited financial resources will bear the risk of increasing freight rates according to market fluctuations.
The Vietnam Maritime Administration said that in the coming time, it will work with European and American businesses and shipping lines to propose stabilizing shipping prices in order to exploit the potential market in Vietnam in the long term; At the same time, strengthen inspection and supervision of foreign shipping companies' price listing according to current regulations to stabilize freight rates.