Vietnam struggles to make profit while soaring freight rates add pressure

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STEEP increases in freight rates and surcharges by shipping lines on key trade lanes are forcing Vietnamese exporters to suffer profit loss, reports VietNamNet Bridge news agency.

As of March 1 container rates will increase by more than US$500 per TEU in freight for those containers to the Middle East, an increase of $400 more from April 1. Rates for freight to America will increase by $300 per TEU from March 15 and $400 per TEU from May 1.

Hapag-Lloyd has raised its shipping fees for routes to South America by $600 per TEU and routes to Panama and Caribbean by $560 per TEU and $800 per FEU. Hong Kong's OOCL will increase its rates $600 per TEU on its routes from Vietnam to North European and Mediterranean countries along with CMA CGM, Maersk and NYK increasing rates by $800 per TEU to $1,000 per TEU.

Crippling freight rates are biting into profits for exporters of fresh fish companies like Hung Vuong Seafood Company already paying as much as $10,400 in additional costs for 13 containers of its frozen tar fish products shipped to Europe, America and South America on a monthly volume of 500 TEU.

This works out as a shocking $800 to $1,000 per container in fees which adds to per kilo costs for the tra fish products, said its general director Duong Ngoc Minh, the news agency reported.

Port fees on services and surcharges are up, accounting for 70 per cent of a sum for one garment business with more costs loaded on trailer transit from port to factory from March 10 at VND200,000 (US$9.60) to VND300,000 per trailer.

Source Shipping Gazette - Daily Shipping News

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