Call for efforts to minimise the impact of skyrocketing sea freight costs

International container shipping rates have increased by more than 70 per cent over the same period last year and by more than 110 per cent compared to the pre- COVID-19 pandemic period.

The Việt Nam Maritime Administration (Vinamarine) has called for efforts to minimise impacts of skyrocketing sea freight costs on imports and exports.

Vinamarine’s statistics show that global container shipping fees have increased by 12 per cent, while costs on routes from Asia to Europe have risen by 11-14 per cent.

International container shipping rates have increased by more than 70 per cent over the same period last year and by more than 110 per cent compared to the time before the COVID-19 pandemic.

There are fears that the lack of empty containers, disruptions caused by Red Sea conflicts and rising transport demands could push up sea freight rates to the records set during the COVID-19 pandemic.

Rates tend to increase rapidly and even change within a day, according to Phạm Quốc Long, President of Việt Nam Ship Agents, Brokers and Maritime Services Providers Association.

Previously, shipping lines normally quoted container freight rates for a period of 15-30 days but now they only quote for a week.

Current rates are double but are still five times lower than during the COVID-19 pandemic.

Long said that the biggest impact was on small businesses that sign short-term charter contracts, but since most enterprises in Việt Nam were small or medium sized, they were bearing the brunt of price increases. Việt Nam’s charterers should join together to gather goods so that they could have better positions in negotiation with carriers, he said.

Most recently the Ministry of Transport asked Vinamarine to work with port companies, associations and shipping lines to figure out problems and offer possible solutions.

Vinamarine has asked supervision to be enhanced on the collection of port services charges and surcharges in addition to container shipping fees.

Efforts also need to be enhanced to prevent congestion at ports, ensure the supply of empty containers and speed up the release of goods.

Vinamarine also urged enterprises to increase cooperation to develop production and transportation plans together as base to negotiate long-term contracts with carriers so that the impacts from fluctuating freight rates can be mitigated.