Container shortage compounds Vietnamese exporters’ shipping woes

By Vien Thong, Dat Nguyen   April 6, 2021 | 09:00 pm PT
Container shortage compounds Vietnamese exporters’ shipping woes
A container ship docks at Tan Cang Cai Mep Port in Ba Ria–Vung Tau Province, southern Vietnam. Photo by VnExpress/Dang Khoa.
Vietnamese businesses are once again struggling to get containers to export their goods amid a global imbalance in the logistics sector.

Bui Thi Ngoc Tuyen, deputy director of Bich Chi Food Company in the southern province of Dong Thap, said as empty containers have become scarcer, prices have tripled.

"We struggle to get enough containers for our goods, and even if we do, there is no ship to transport them."

Duy Tan Plastics, which gets one-fifth of its revenues from exports, is also caught in a similar struggle, with logistics costs on some main routes rising 95–231 percent year-on-year.

The company has seen the number of orders decline by around 10 percent due to higher shipping costs, its deputy director Le Anh said.

Tran Thanh Hai, deputy director of the Agency of Foreign Trade under the Ministry of Industry and Trade, said sea shipment costs have risen because container costs have surged seven or eight times.

Vietnamese companies had already faced a container shortage towards the end of last year and earlier this year as global trade rebooted after months of limited activities caused by the Covid-19 pandemic, but the recent Suez Canal blockage has once again triggered shortages which could severely hurt exporters.

Although the mega ship Ever Given has been freed from the canal, some ships had been forced to reroute on a longer journey, and a two- or three-week delay of shipments is expected.

This means Vietnamese exporters will have to wait a couple of weeks or even a month to receive empty containers for the next shipment, and they will have to bear higher costs due to shortage of the metal boxes, said Ho Van Hiet, CEO of Prime Logistics Vietnam, which transports around 200 containers a month.

Container rents in December and January had surged 5-10 times from earlier due to a global shortage of containers. Although prices dropped by 10-20 percent last month, they could return to the previous peak in this and the next month due to the Suez blockage, Hiet told VnExpress International.

His company has been urging customers to make quick deliveries now, before prices climbed again.

Lam Thi Thanh Bong, CEO of Karl Gross Logistics Vietnam, said that after a period of limited trade activities last year caused by the Covid-19 pandemic, many Western countries are having an oversupply of empty containers while some Asian ones are seeing shortages.

"This imbalance in supply and demand will have major impacts on Vietnamese exporters," she said.

For now, exporters need to book their shipment between two and four weeks prior to ensure they have slots on the vessels and they should negotiate sharing higher logistics costs with their partners, she added.

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