Containers at a southern port in Vietnam (Photo: Internet) Hanoi (VNS/VNA) - The cost tohire shipping containers has skyrocketed to nearly ten times itspre-pandemic level, according to export businesses and trade agencies.
During the last three months, the cost to hire a 40-foot containerincreased to 8,000 USD, even to 10,000 USD in certain cases, from less than$1,000 at the beginning of 2020. It has sharply driven up expenses forexporters and raised concerns over a lack of transparency and inadequate pricemanagement of containers, said businesses during a meeting in Hanoi with the VietnamMaritime Administration (VMA).
A wide range of businesses across all sectors have been hit by the price hike,which exporters claimed was "nonsensical" whiledemanding shipping companies take steps to rein it in and bemore transparent regarding their pricing.
General Secretary of the Vietnam Plastics Association (VPA) Huynh Thi My saidthe price hike has severely hampered export activities of plastic makers,resulting in significantly lower export volume and in one instance effectivelyshut down an Indian plastic firm in the Vietnam - Singapore Industrial Zone innorthern Bac Ninh province for the whole of December last year.
A representative from the firm said it was forced to shutter operations becauseof the price hike, which has brought its operational cost to an unsustainablelevel. Other plastic makers also reported a 50 percent higher inventorycompared to the same period last year, even after they bit the bullet andshipped orders at a loss-incurring cost.
"We [the VPA] demanded the VMA and other trade authorities launchinvestigations into and conduct thorough reviews on shipping companies' pricingpolicies," said My.
The VPA also called for a review of current regulations, pointing to a lack ofa control mechanisms and transparency over the price to hire containers in Vietnam.Measures must be taken so avoid future price hikes.
Meanwhile, shipping companies cited difficulties caused by the pandemic, aspike in exports to the EU and US markets and longer time required to free upcontainers for hire. They said the situation is not likely to improve until atleast March, or in worst-case scenario well into the year's second quarter.
Deputy head of the VMA Hoang Hong Giang said the administration has requiredshipping companies to publish their prices and organised meetings withexporters.
"The reason behind the recent price increase for container-for-rent was amatter of supply and demand. The administration, however, insisted thatshipping companies must be transparent with pricing policies. We have alsoconsidered commandeering thousands of unclaimed containers in ports across thecountry as a solution to the shortage," he said.
Tran Thanh Hai, deputy head of import and export from the Ministry of Trade andIndustry, said the ministry is to report the matter to the Prime Minister'sOffice. Meanwhile, he urged exporters to look into alternatives such as railwaytransport to EU markets and to renegotiate delivery dates with buyers./.
During the last three months, the cost to hire a 40-foot containerincreased to 8,000 USD, even to 10,000 USD in certain cases, from less than$1,000 at the beginning of 2020. It has sharply driven up expenses forexporters and raised concerns over a lack of transparency and inadequate pricemanagement of containers, said businesses during a meeting in Hanoi with the VietnamMaritime Administration (VMA).
A wide range of businesses across all sectors have been hit by the price hike,which exporters claimed was "nonsensical" whiledemanding shipping companies take steps to rein it in and bemore transparent regarding their pricing.
General Secretary of the Vietnam Plastics Association (VPA) Huynh Thi My saidthe price hike has severely hampered export activities of plastic makers,resulting in significantly lower export volume and in one instance effectivelyshut down an Indian plastic firm in the Vietnam - Singapore Industrial Zone innorthern Bac Ninh province for the whole of December last year.
A representative from the firm said it was forced to shutter operations becauseof the price hike, which has brought its operational cost to an unsustainablelevel. Other plastic makers also reported a 50 percent higher inventorycompared to the same period last year, even after they bit the bullet andshipped orders at a loss-incurring cost.
"We [the VPA] demanded the VMA and other trade authorities launchinvestigations into and conduct thorough reviews on shipping companies' pricingpolicies," said My.
The VPA also called for a review of current regulations, pointing to a lack ofa control mechanisms and transparency over the price to hire containers in Vietnam.Measures must be taken so avoid future price hikes.
Meanwhile, shipping companies cited difficulties caused by the pandemic, aspike in exports to the EU and US markets and longer time required to free upcontainers for hire. They said the situation is not likely to improve until atleast March, or in worst-case scenario well into the year's second quarter.
Deputy head of the VMA Hoang Hong Giang said the administration has requiredshipping companies to publish their prices and organised meetings withexporters.
"The reason behind the recent price increase for container-for-rent was amatter of supply and demand. The administration, however, insisted thatshipping companies must be transparent with pricing policies. We have alsoconsidered commandeering thousands of unclaimed containers in ports across thecountry as a solution to the shortage," he said.
Tran Thanh Hai, deputy head of import and export from the Ministry of Trade andIndustry, said the ministry is to report the matter to the Prime Minister'sOffice. Meanwhile, he urged exporters to look into alternatives such as railwaytransport to EU markets and to renegotiate delivery dates with buyers./.
VNA
