Dramatic Price Rises for Consumers, as Shipping Disruption Means Crippling Freight Charges for Vietnam Exporters

[ASEAN NOW News]

We have all read about the chaos the micro chip shortage is costing manufactures. Now to add to their problems is  an even bigger drama is emerging as shipping cannot cope with demand.

 

Before the pandemic, an English importer was paying $2,500 to $2,800 (£1,800-£2,000) to bring a 40-foot container from China to the UK. Now they are having to pay $16,000, and that is if they can actually get a booking.

 

 

This is already starting to have a major impact on Vietnam exporters, who will start to struggle just to be competative and to get international orders.

 

Due to the increasingly complicated situation of Covid 19, this has seriously affected the international flow of goods and transport, leading to the shortage of container shells, thereby increasing shipping rates in the export of goods in Vietnam.

 

Currently, because the epidemic is rampant in European countries and especially in the US, 1 container is imported from Asia for every 3 containers, thereby causing a lack of container shells.

 

Lack of containers currently appears regularly in Asian countries and Southeast Asia and tends to spread out.

 

Rising Maritime Transport Costs is Making Vietnam Exports Expensive

 

A businessman operating in the shipping industry added: “shipping companies have to wait many weeks to get their containers and are forced to pay high prices, which has pushed up shipping prices dramatically.” 

 

“Specifically, freight rates from China to the US and Europe have increased by 300%. Sometimes the freight was up to US$6,000 a container, compared to the usual price of US$1,200."

 

Therefore, many companies trying to export general items or agricultural products from Vietnam are now being forced o pay for container charges of up to 3-4 times, and in some cases even ten times higher than normal, just  to keep up with the scheduled delivery times shown in the contract for their customers.

 

Currently, international buyers are having to wait to see if the freight is able to cool down or not to calculate the purchase price accordingly.

 

Cashew Exports Turn to Domestic Market

 

In addition, the cashew season in Brazil, Mozambique, Tanzania, and Kenya is currently in their harvest season, so the cashew inventory in these countries is quite a lot.

 

Some customers ask for future delivery, but the price is not good for Vietnamese cashew exporters, and there are not many orders to be closed.

 

This has led Vietnamese cashew producers to have to try to focus on selling roasted cashew for the domestic market.

 

Ceramic Tiles Taken Back from Port

 

“We even had to consider transporting 20 containers which had already been transported to the port back to the warehouse,” explained Vũ Trang Nhung from Vitaly in the southern province of Bình Dương.

 

Her company exports ceramic tiles to Malaysia, Yemen, and Bahrain.

 

She said that freight rates had increased dramatically from the end of last year. Especially for fees from Cát Lái Port (HCMC) to Aden Port (Yemen) increased from US$1,500 to US$2,500 per 20-feet container in mid-December then jumped to $4,500 in early January 2021.

 

Adding to this, containers were not always transported immediately but had to wait at the ports, pushing up costs even higher.

 

We have been focusing on a few issues here in Vietnam. However this is a global problem, that will naturally push up prices across the board.

 

So, whether you like your Durians from Thailand or your micro chips from Taiwan, what we will all pay in the shops in the future, will unfortunately rise accordingly.

 

Manuactures, exporters and importers will not be able to swallow this huge increases so us the poor consumer will find our monthly shoppping bill rise.