Export of farm produce down due to container shortage

Hanoi (VNS/VNA) - Exports of many agricultural products continued to decline sharply in January due to a shortage of empty containers.

According to the General Department of Customs, in the first half of January, Vietnam’s coffee exports decreased by 46 percent in volume and nearly 43 percent in value to 52,000 tonnes and 95 million USD, respectively, compared to the same period of 2020.

Rice exports also fell sharply by 44 percent in volume to 131,000 tonnes and 38 percent in value to 72 million USD. 

Fruit and vegetable exports reached 130 million USD, 33 percent lower than the same period of last year.

The general department said some other farming products also saw a strong reduction in export value during that period, including tea (22 percent to 6.6 million USD), pepper (10 percent to 21 million USD) and seafood (14 percent to 278 million USD).

The reduction in exports of those key agricultural products was mainly due to a severe shortage of empty containers. Therefore, agricultural products exported in January had very high shipping costs.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood businesses said that in January, the freight to Europe continued to increase strongly by between 145-276 percent, depending on the port. 

Specifically, this freight at the main ports surged by 145 percent to 7,000 USD per container in January 2021 from 2,850 USD in December 2020. Some firms increased the freight from 2,800 USD per container to 10,550 USD.

The same situation happened at US ports. The freight in January increased by 14 percent to $4,000 per container for shipping goods to the West coast and by 14-19 percent to $5,600-5,850 per container to the East coast. It also increased from $50-100 per container to Japan’s ports.

Do Ha Nam, Vice Chairman of the Vietnam Cocoa and Coffee Association, said the shortage of empty containers to transport coffee has led to stagnant exports at many countries and lower supply in consumption markets.

The Vietnam Pepper Association’s survey in January 2021 for some pepper agents and cooperatives in Dong Nai province showed that pepper inventory is still large, excluding the volume that has been sold but not yet shipped. That was due to high freight and the shortage of empty containers.

According to domestic and international logistics experts, the serious shortage of empty containers will last at least until the end of the first quarter this year, reported the Nong thon Ngay Nay (Countryside Today) newspaper. 

In the long term, Vietnam should have a strategy to reduce dependence on international shipping companies as present, including a solution encouraging investment in the development of container shipping fleets and plants producing containers, they said.

One of the most important solutions at present is to free up containers of imported goods and to move the containers in the most reasonable and fast manner to have more containers for shipping export goods.

Nguyen Duy Hong, deputy general director of the Smartlogs Supply Chain Solution Corporation, said there are about 300,000 20-feet empty containers circulated among seaports in Vietnam each year.

The circulation is ineffective because empty containers are often sent to major ports before moving to secondary ports for exporters, he said.

If it is organised properly, many containers will be used to transport export goods quickly, Hong said. For example, the technology process will optimise the use of containers by moving empty containers from importers directly to exporters and to flexible locations according to regional needs. That will create favourable conditions for businesses to have empty containers for shipping export goods, he said./.