Shipping rates are doubling, even nearly tripling on some routes, causing many export businesses to face difficulties.
In an interview with VnExpress, export businesses said they are having headaches because ship freight rates have doubled in the first 6 months of this year.
The CEO of a coffee export business in Ho Chi Minh City said he's losing money because shipping costs have skyrocketed. "We are under pressure from many sides. In addition to shipping fees, the price of raw coffee has doubled over the same period," said the CEO of this business.
Similarly, Mr. Phan Minh Thong - General Director of Phuc Sinh Joint Stock Company - said that at the end of May and early June, sea freight rates increased continuously. As of early June, shipping rates on many routes increased 2-2.6 times compared to March. In particular, freight rates from Ho Chi Minh City to the US increased uncontrollably, a 40-foot container in March was 2,950 USD and has now increased to 7,950 USD.
"Pepper, coffee, and shipping rates have increased dramatically, so if there are export goods, businesses will have to suffer losses. However, it is not easy to find ships at this time," Mr. Thong said.
According to export businesses, rising shipping rates are causing difficulties for businesses, especially in the context of a shortage of ship supply. Previously, shipping companies quoted freight rates for a period of 15 days to 1 month, but now they only quote prices weekly.
The reason for the increase in shipping rates, according to businesses in the field of logistics services, is that the war is affecting shipping rates globally.
In addition, the US plans to impose strong tariffs on many types of Chinese goods from August, causing this country's exporters to boost exports ahead of schedule. Many Chinese exporters are paying higher prices to get space on ships. Currently, China is willing to pay up to 1,000 USD for 1 slot on the ship, while Vietnam only pays 600 USD.
Vietnamese exporters said they are discussing ways to reduce freight costs. In addition, they may have to temporarily suspend exports of less important orders, or request an extension of delivery time.
According to the Coffee, cocoa, and Seafood Export Association, the rapid increase in shipping rates will cause businesses to face difficulties shortly. Rates are currently only increasing on some routes, but they are worried that this incident will create a domino effect on other routes. Businesses in difficulty will not be able to bear too many losses if freight rates continue to increase.
Sourrce: Vnexpress