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Wednesday, June 19, 2024

Freight charges up 5-10% as fuel prices soar

The Saigon Times

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HCMC – Transport companies have adjusted up their freight charges by 5-10% as a result of higher fuel and other costs, according to Bui Van Quan, chairman of the Cargo Transport Association of HCMC.

Local fuel retail prices were hiked on November 10, marking the fifth straight spike in two months. Bio-fuel E5 RON92 and RON95 petrol rose by around VND600 per liter to VND23,660 and VND24,990 per liter, respectively, the highest levels in seven years.

Many transport companies said they have no option but to increase the freight rates. 

The owner of a transport company with 30 trucks in Tan Phu District, HCMC, said raising freight rates is inevitable given surging costs. 

According to him, fuel prices account for around 35% of transport costs. The fuel price increase has led the prices of many other items to leap. The prices of tires and lubricants have soared 20-30%. 

Lam Dai Vinh, director of Lam Vinh Transport Company Limited, said his company has informed clients of a 10% increase in freight rates. “Fuel prices have risen sharply, so we have to adjust up our charges to avoid losses. However, not all customers have accepted the hike,” he said.

Bui Van Quan, chairman of the HCMC Cargo Transport Association, said, “Transport companies can now operate at only 50-70% of their capacity. They are unable to keep freight rates unchanged.”

According to Quan, the Government should cut taxes and fees, such as road maintenance fees and BOT fees, to support transport firms. 

He also proposed reducing environmental protection tax, which is currently charged at VND3,800-4,000 on each liter of fuel sold. 

“When fuel prices go down, freight charges and the prices of other goods may edge down,” he said. 

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