Maritime Administration seeks solutions to reduce shipping costs

The Director of the Maritime Administration requested ports to monitor service prices and require businesses to sign long-term contracts with shipping lines to avoid freight rate increases.

Last week, the Maritime Administration inspected the maritime transport situation, monitored port service prices, and container freight transport at the ports of Quang Ninh, Hai Phong, Vung Tau, and Ho Chi Minh City, in the context of the price of shipping goods by sea to European countries and the US tending to increase sharply due to congestion at some Asian ports.

According to statistics on the container shipping price index of Drewry (an independent maritime research center providing information on the maritime market), the price of container shipping services from Asia to Europe and the Americas began to increase from the beginning of 2024, peaking at the end of January.

By February, the freight rates had gradually decreased. However, by May, prices continued to increase rapidly again, currently 17% higher than in January and 45% higher than the peak price during Covid (September 2021).

Loading and transporting goods at Cat Lai port, Ho Chi Minh City. Photo: Thanh Nguyen

According to Gemalink port representative, the port has prepared a plan to welcome the increase in cargo volume in the coming time due to the congestion of Singapore port, shipping lines will shift to neighboring markets, including Vietnam due to the advantage of deep-water ports. Regarding transportation routes, there has also been remarkable growth, in Hai Phong area there are 7 transportation routes to America, while Cai Mep - Thi Vai port area has over 35 transportation routes to Europe, America and Intra-Asia.

Port enterprises also reported the situation of ships entering and leaving the seaport smoothly and effectively, there is no phenomenon of cargo congestion, the ports are still capable of accommodating ships even in the case of forecasted increase in cargo in the coming time.

Representatives of major shipping lines providing container transportation services to Europe and the US affirmed that there is currently no phenomenon of container shortage. The companies still ensure to meet the demand for import and export of goods for the Vietnamese market.

To meet the demand for goods output forecast to increase in the coming time due to the trend of shifting from Singapore to Vietnam, Mr. Le Do Muoi, Director of the Maritime Administration, has directed maritime port authorities and enterprises to speed up the clearance of goods at ports, reduce administrative procedures to create favorable conditions for ships and boats to circulate.

For import-export enterprises, the leaders of the Maritime Administration assessed that small-scale shippers are most affected by the increase in freight rates, while large shippers with stable sources of goods signing long-term contracts will have their freight rates kept stable and unchanged while the contract is still in effect.

To avoid being affected by fluctuations in freight rates, the Director of the Vietnam Maritime Administration has requested industry associations to gather member enterprises to develop production and transportation plans, as a basis for signing long-term contracts with shipping lines, minimizing the impact of freight rates in the current complex market situation.

Maritime port authorities are also required to strengthen monitoring of service prices at seaports and prices, surcharges outside the price of container shipping services by sea; monitor congestion at ports, provide container shells, and periodically report to the Vietnam Maritime Administration.

In the long term, the Maritime Administration said it will continue to coordinate with relevant authorities such as customs to speed up the clearance of long-standing goods at seaports, and supplement regulations on the allocation of funding sources for dredging maritime routes.

In the first 5 months of the year, Vietnamese seaports achieved an output of 7.56 million TEU of import and export container goods, an increase of 16% over the same period in 2023. This is the highest growth rate in the past 5 years, 3 times higher than the average growth rate in the past 5 years of 5.5%.

Currently, the freight rates for container shipping from Asia to Europe and the US have the largest increase, however, the direction from America, Europe to Asia and intra-Asian shipping routes have not fluctuated much. Container shipping rates are regulated according to the international market, according to market supply and demand, so Vietnam's freight rates are also adjusted.