Shipping rates are doubling, even nearly tripling on some routes, making it difficult for many export businesses.
Sharing with VnExpress, exporters said that they are having quite a headache because variable freight rates have doubled in the first 6 months of this year.
The CEO of a coffee export company in Ho Chi Minh City said he was losing money because of soaring shipping costs. “We are under pressure from many sides. In addition to sea freight, the price of raw coffee doubled over the same period,” said the CEO of this business.
Similarly, Mr. Phan Minh Thong – General Director of Phuc Sinh Joint Stock Company – said that at the end of May and the beginning of June, shipping rates increased continuously. As of the beginning of June, train fares on many routes increased 2-2.6 times compared to March. In particular, freight rates from Ho Chi Minh City to the US increased uncontrollably, a 40-foot container in March was 2,950 USD, now it has increased to 7,950 USD.
“Pepper, coffee, and shipping rates have increased shockingly, so if there are exported goods, businesses will have to suffer losses. However, it is not easy to have a ship at this time,” Mr. Thong said.
According to exporters, the high freight rates of ships are causing difficulties for businesses, especially in the context of a shortage of ship supply. Previously, shipping lines quoted freight rates for a period of 15 days to 1 month, now they only quote prices weekly.
The reason for the increase in shipping rates, according to businesses in the field of logistics services, is that the war is affecting ocean freight rates globally.
In addition, the US is planning to impose strong tariffs on many Chinese goods from August, causing the country’s exporters to step up their exporting ahead of schedule. Many Chinese exporters are paying higher prices for slots on ships. Currently, China is willing to pay up to 1,000 USD for a slot on freighter, while Vietnam only pays 600 USD.
Vietnamese exporters said they are discussing ways to reduce freight costs. In addition, they may have to suspend exports for less important orders, or have discussion for extension of delivery time.
According to the coffee, cocoa and seafood export association, the rapid increase in freight rates will make it difficult for businesses in the coming time. Freight rates have only increased on some routes, but they are worried that this incident will form a chain effect with other trips. Businesses that are struggling will not be able to bear too many losses if freight rates continue to increase
Source: VNEXPRESS
