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|Suez Canal incident keeps Vietnamese exporters busy, photo AFP|
Furniture exporter Viet Products Corporation last week said that even though the backlog has been cleared up at the Suez, it has still borne the growing costs for shipping. “The expense per container has increased to $5,000, from $3,000 last year,” said Nguyen Van Sang, managing director of Furnist, a brand under Viet Products. Sang said that due to operating under the free-on-board form, its partners have been afraid to book new orders, resulting in interruption in its performance.
“It takes us several attempts to ship a container. For example, with a 10-container booking, we can only ship about three or four containers, and the remaining ones will have to wait. That has hampered us from delivering on schedule,” Sang said.
The seafood industry has also been put in the same corner. Truong Dinh Hoe, secretary-general of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that the sector is facing accumulating costs for hiring frozen containers to export to the European Union and the United States. The problem stemmed from the effect of the Suez Canal and also serious shortages of containers which has been an issue in recent years.
Kelly Dung, sales manager at international transport firm T&M Forwarding, said that lasting impacts of the recent Suez incident will continue to force growing expenses for shipping. “Shipping companies will have to cut some vessels because of that as well as the ongoing impacts of COVID-19,” Dung told VIR.
With the logistics industry being paralysed due to the pandemic for over a year, now congestion at EU ports may send vessels back to Asia, adding complexity to the situation.
“The current expense is on average about $4,000 per container travelling to the US and about $7,500 per container to the EU,” Dung added. “The price may even double in late April and early May.”
According to Thetech Co., Ltd, a small electronic component importer and exporter, the sums are “too heavy” for its operation. For over a year, the company has been angling for solutions to solve its transport cost issue and has resorted to accelerating shipping through air routes. However, the expense has still ballooned by 10 per cent compared to last year.
Hoe from VASEP said that local seafood exporters are still looking for solutions.
Meanwhile, local rice exporters have been lowering prices for their products in an attempt to enhance the items’ competitiveness against Thai and Indian components. Moreover, they have been attempting to negotiate with overseas partners to extend the shipping timeline, according to the Vietnam Food Association.
The wave of importing goods from Asia to the United States is causing congestion at ports on the latter’s west coast, deepening the global shortage of containers and accumulating shipping costs.
The number of containers at the ports of Los Angeles and Long Beach in February increased by 45 per cent on-year, an eighth consecutive month of growth. In March, the sum was estimated to have grown by 80 per cent. Dozens of other container ships are anchored and waiting offshore. The two ports have received about 40 per cent of imports but still fail to keep pace with the expenditure demand of the US consumer, according to Gene Seroka, managing director at Los Angeles Port.