A sea port in Vietnam (Photo: Vietnamplus) (Hanoi (VNA)- Vietnam’s shipping fleet must improve its capacity to narrow the gap in import and export markets and regain market share taken by foreign shipping lines.
Restructuring to regain sea freight market share
Besides setting up freight inspection teams to avoid price squeezing and supporting enterprises to import and export goods by sea, representatives from State management agencies and experts said that it is essential to promote the fleet’s capacity with a suitable structure according to each type of specialized vessel and market trends.
The State also needs to adopt policies and mechanisms to create the conditions necessary for businesses investing in the shipping industry to control the capital market, which is being manipulated by foreign shipping lines.
Fears of foreign shipping lines joining hands to increase prices
As sea freight rates have increased rapidly, many countries around the world have taken action to help businesses overcome difficulties in import and export activities.
For example, China’s Ministry of Transport has convened a meeting with shipping lines to review seat control and price increase policies.
The Republic of Korea’s Ministry of Oceans and Fisheries has issued a warning notice to shipping lines about “reviewing and punishing, if necessary, unreasonable breach of contract or unilateral change of contract terms to maintain market order”.
The US Federal Maritime Commission (FMC) has warned that it is increasing monitoring of the effects related to rises in freight rates and transport service capacity while reviewing violations of competition standards, if any, caused by rate increases.
Ms. Nguyen Thi Thuong, Deputy Head of the Department of Shipping and Maritime Services at the Vietnam Maritime Administration, said that current sanctions on managing the freight rates and surcharges of foreign shipping lines applied in Vietnam is regulated in Decree No 146/2016 of the Government, stipulating the listing of prices and surcharges, the price of container freight services by sea, and service prices at seaports.
Based on the Decree, the Administration is coordinating with relevant associations to review the past application of freight rates and surcharges by foreign shipping lines in Vietnam. Any case where increases in freight rates are not declared to relevant authorities as prescribed will be severely punished under Decree No 142/2017 from the Government on sanctioning administrative violations in the maritime field.
The Ministry of Industry and Trade will continue to work with the Vietnam Association of Logistics Service Enterprises, the Vietnam Shippers Association, and export industry associations to coordinate over the rational and efficient use of containers, exchange information regularly to make the most of two-way container rotation, and check the ability of shipping lines to “join hands” to raise freight rates and keep empty containers to push up container rental rates, causing losses to Vietnamese shippers.
However, the Vietnam Maritime Administration has acknowledged that the level of punishment for shipping lines remains modest. In order to strengthen State management, it is therefore necessary to continue to improve legal regulations, including learning from the experiences of other countries.
The market share of Vietnam’s fleet in import and export cargo transport is declining. (Photo: Vietnamplus) Regaining market share at home
According to Mr. Ho Kim Lan, General Secretary of the Vietnam Seaport Association, in the US, all shipping lines entering a seaport must announce prices. Industry associations and private businesses then negotiate with shipping lines.
If there are signs that shipping companies are using advantages in issuing prices or fees that are too high, a business can sue. The shipping company must announce the reason for any increase. If the competition authority detects a violation, the shipping company will be heavily fined./.
