Vietnam supports firms amid skyrocketing container shipping costs to Europe, the Americas
Vietnam supports firms amid skyrocketing container shipping costs to Europe, the Americas
The Vietnamese Ministry of Transport has required the Vietnam Maritime Administration and relevant agencies to support enterprises amid a surge in the prices of container shipping services to Europe and the Americas by sea.
A container vessel docks at Cai Mep – Thi Vai Terminal, located in Ba Ria-Vung Tau Province, a neighbor of Ho Chi Minh City. Photo: Dong Ha / Tuoi Tre |
In particular, the Vietnam Maritime Administration was assigned to ensure the smooth operation of seaports nationwide and accelerate customs clearance procedures for imports and exports and the handling of them, especially containers to Europe and the Americas.
The administration will have to come up with and adopt solutions to improve the exploitation of maritime infrastructure.
It should swiftly engage with shipping companies that operate routes to Europe and the Americas, urging them to sustain these routes and transport additional empty containers to Vietnam to fulfill the rising demand for cargo transport.
The Ministry of Transport has instructed the Vietnam Maritime Administration to explore policies that incentivize foreign container shipping companies to establish new routes to Vietnam, with a focus on streamlining and simplifying administrative procedures.
Earlier, the administration reported that in the first week of this month, the prices of container shipping services from Asia to Europe and the Americas surged some 60 percent over the end of last year and 25 percent year on year.
In particular, the freight rate from Vietnam to U.S. West Coast ports has soared to US$2,650 per 40-foot container, while shipping costs to U.S. East Coast ports and Europe have reached $3,900 and $4,900 per 40-foot container, respectively.
Furthermore, 78 out of 650 shipping services by sea would be canceled between the second week of this year and mid-February, accounting for 12 percent of the total services, according to statistics from Drewry, an independent maritime research consultancy offering market insights and advisory services to senior stakeholders across global shipping.
The Vietnam Maritime Administration informed that the shortest shipping route from Asia to Europe is through the Red Sea region and the Suez Canal.
However, shipping lines have changed their routes by going through the Cape of Good Hope due to escalating tensions in the Red Sea region.
The new route lengthens the shipping time by 10-14 days, leading to an increase in shipping prices and a possible shortage of containers.
The Vietnam Maritime Administration said it had told maritime agencies in Hai Phong City in northern Vietnam and Ho Chi Minh City and Ba Ria – Vung Tau Province in the southern region to work with shipping companies operating routes to Europe and the Americas to assess the freight shipping rate surge and inspect companies’ listing of shipping costs.
Reuters cited freight platform Xeneta as saying on Friday that shippers are turning to more expensive air freight from Vietnam to Europe, as shipping is disrupted by attacks on vessels in the Red Sea.
Cargo volumes from Vietnam to Europe surged 62 percent in the week ending January 14 from the previous week, and rates increased 10 percent, said Niall van de Wouw, chief air freight officer for the air and ocean freight rate benchmarking platform.
The Red Sea, which leads to the Suez Canal, lies on the key east-west trade route from Asia's manufacturing hubs to Europe and onto the east coast of the Americas.
About 12 percent of world shipping traffic accesses the Suez Canal via its waters, according to Reuters.
