Sea freight rates hit record highs
In some ports, freight prices have doubled compared to the previous month and nearly 6 times higher than the price at the beginning of 2020. For example, transporting refrigerated containers from Vietnam to Southampton (UK) in May is 9.100 USD per container, 4.100 USD more expensive per container than in December 2020. This price for Vietnam – Los Angeles (USA) route is 8.000 USD per container in May, double that of the end of last year.
For dry goods, the shipping price of dry cargo containers to Israel in October 2020 was only 2.300 USD a 20-foot container, in March 2021 it increased to 6.300 USD (with Happloy shipping lines, Evergreen) and up to 7.000 USD(with shipping lines Happloy, Evergreen) Zim shipping company). There are even shipping lines that charge up to 11.000 USD.
Besides, at the end of October 2020, many container shipping lines such as Wan Hai, Yaming, Sinokor (Vietnam), Cosco, Nam Sung, Ever Green Shipping Agency, etc. simultaneously increased the Rate Restoration surcharge (RR – container return fee) for container goods exported from Vietnam to Asian markets with an increase of 50-200 USD/cont and started to apply from 1st November 2020. With the Yaming shipping line, in addition to the newly increased RR fee, the shipping line also announced an increase in Peak Season Surcharge (peak season surcharge) from 150 – 450 USD starting from 6th November 2020.
Although the container rental price is high, it is still difficult for businesses to book containers, due to the serious shortage of containers at ports and routes. Specifically, in December of 2020, businesses that want to rent containers must book 1 month in advance, and even if businesses have registered containers to pack goods and take them to the port to board export ships, shipping lines still stop continuously delay, many trains have to stop 4-5 times, equivalent to about 10-15 days.
In the current empty container market, the company that pays the higher freight will give priority to the shipping company. Accordingly, VASEP said that shipping lines have hoarded containers and space on ships to push up the container rental price.
Pressure “weighing” on businesses
The shortage of containers has disrupted the import and export of goods, and at the same time increased the cost of renting containers at all seaports and caused the risk of supply chain disruption for many industries. This situation also causes many businesses to pay extra costs for warehousing and storage because they cannot rent containers to transport, so shipments are congested at seaports.
According to VASEP, increased logistics costs will significantly affect the competitiveness of enterprises in the world market, causing many orders of businesses to have been canceled, delivery time is slow, and difficult to sign new orders. Therefore, at present, many enterprises are facing serious loss and production stagnation and if no control measures are taken, this situation will continue to have a very serious impact on seafood exports products in particular and the import and export sectors of Vietnam in general.