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Monday, June 17, 2024

Vietnam-U.S. sea shipping rates soar to record highs

By Le Anh

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HCMC – Container shipping rates from Vietnam to the United States have soared to a record high of nearly US$20,000 for a 40-foot container, compared to the US$8,000-9,000 range late last year.

A representative of a HCMC-based wood firm yesterday, July 28, told the Saigon Times that his firm secured an order to export wood to the U.S., but was shocked after being informed of the shipping rate by a shipping line.

Early this month, this shipping company told the wood firm that the shipping rate on the Vietnam-U.S. route was set at US$12,000 per container. The rate has surged to US$19,840 for a 40-foot container as of now, which is twofold higher than the figure recorded at the end of last year, at US$8,000-9,000 for a 40-foot container.

An employee of a logistics firm based in HCMC also confirmed to the paper that shipping lines late this month all announced higher shipping costs from Vietnam to U.S. ports.

Specifically, the rate for shipping a 20-foot-equivalent container from the Cai Mep Terminal to the U.S. is US$11,750 and US$14,500 for a 40-foot container, excluding surcharges. If the surcharges are taken into account, the total shipping costs could rise to US$17,000-20,000 for a 40-foot container.

Due to the Covid-19 pandemic and the shortage of shipping containers, shipping lines are charging extremely high rates. As shipping lines have the authority to regulate rates, businesses have to accept any rate they set, the HCMC-based logistics firm’s representative added.

Given the upsurge in sea shipping costs, some fisheries companies in the Mekong Delta have changed their ways of trading with business partners.

Instead of the seller paying the shipping, freight, and insurance costs until the cargo arrives at the buyer’s destination port, local firms will sign Free On Board shipping contracts in which the buyer is responsible for costs once the goods are shipped.

In Vietnam, the transport of export goods to Europe and North America is currently carried out by 40 foreign shipping lines, which account for 95% of the country’s import and export goods transport market share. Local shipping companies are yet to be eligible to operate international sea shipping activities, so they remain on the sidelines of this game.

Recently, the Vietnam Maritime Administration released its conclusion after three months of inspecting shipping rates and surcharges set by foreign shipping lines in Vietnam.

As the foreign shipping lines do not have to declare their shipping costs to the State management agencies, the firms have the authority to decide on the shipping costs. Accordingly, asking shipping lines to make a list price does not make much sense to check and monitor shipping rates of foreign shipping lines, the Vietnam Maritime Administration said.

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