Ocean freight rates, export costs rise; hit Vietnam's competitiveness

01 Apr '22

1 min read

Pic: Shutterstock

As ocean freight rates continue to escalate due to rise in petroleum prices, export costs are rising and are reducing the competitiveness of Vietnamese goods, according to businesses. Foreign shipping lines have increased freight rates by twice or thrice, and even six to seven times on some routes, said a report by the Association of Seafood Exporters and Producers (VASEP).

While shipping companies blame the lack of containers and the impact of the Russia-Ukraine war for the rising freight rates, the association said businesses are also having difficulty booking containers.

Prices have soared to $1,600-2,500 per container for shipping to ports in Thailand and the Philippines, $12,000-14,000 to the US West Coast, and $19,000-22,000 to the US East Coast.

The oil price surge has also resulted in road transport operators raising tariffs.

Many businesses have also expressed concern about HCM City collecting fees on seaport infrastructure from April 1, which will further increase costs and erode the country’s export competitiveness, according to a report in a Vietnamese media outlet.

While shipping companies are benefitting, generating high revenues and using this opportunity to diversify their service offerings, it is reportedly straining their commercial ties.

Fibre2Fashion News Desk (DS)

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