Allow use of abandoned containers, shipping companies urge

The shortage of empty shipping containers, which has inflated rental prices and hampered enterprises’ ability to export goods in the last three months, could last until the end of March, and even drag on until the end of the second quarter if Covid-19 is not controlled globally, representatives of shipping lines said Tuesday at a meeting held by the Vietnam Maritime Authority.

They said authorities should free up thousands of abandoned containers at ports, usually those that businesses or consignees have failed to pick up, or held for violations of import regulations.

As of last October, there were over 3,300 containers abandoned or left unclaimed at ports for over 90 days at Vietnam’s seaports, according to latest figures from Vietnam Customs.

The Covid-19 pandemic has prolonged the unpacking and rotation cycle of containers, while the recent rise in export goods headed to Europe or the U.S. has caused a shortage of empty containers.

Some shipping lines said that the number of shipments leaving Vietnam for other countries have not fallen, and has even increased on some routes, but freight prices have been ballooning due to a serious shortage of shipping containers.

Container rental prices have continuously increased since October, and are now three-four times higher than what they’d been, seafood, plastic and timber exporters complain.

"This increase in prices has seriously reduced exports and seriously affected plastic enterprises. Many suppliers are now exporting for almost no profit, taking longer to deliver consignments, and seeing their inventories rise 50 percent compared to this time last year," said Huynh Thi My, General Secretary of the Vietnam Plastic Association (VPA).

An Indian enterprise in Vietnam specializing in producing yarn for export announced the closure of its factory in the Vietnam-Singapore industrial park late last year, she said, adding that shipping rates were so high now that it was no longer profitable to produce in Vietnam.

"The VPA requests that the Maritime Authority reviews the freight calculation method of shipping firms and use its powers to coordinate with other agencies to inspect and scrutinize freight rates," she said.

Hoang Hong Giang, deputy director of the Maritime Authority, said that upon receiving complaints of exporters two weeks ago, the agency had issued a written request to shipping lines, instructing them to publicly declare their freight rates and surcharges, warning it would not countenance profiteering or unreasonable prices that cause difficulties for exporters and disrupt the shipping market.

They have, along with the Ministry of Industry and Trades’ Agency of Foreign Trade, also discussed the issue shipping lines and trade associations, but are yet to receive any written explanations from the firms, he said.

"The rental rates of containers depend on supply and demand in the market, but shipping lines need to comply with the request of the Maritime Authority about price transparency. Regarding abandoned containers at ports, we will consider it appropriately," Giang said.

Tran Thanh Hai, deputy director of the Agency of Foreign Trade, also said that his office will report on the issue to the Prime Minister towards finding a solution that balances the interests of shipping firms and exporters.

Exporters should prepare themselves for a prolonged shortage in case the global Covid-19 situation does not improve. They should discuss with partners the extension of delivery schedules, or consider the use of other transport forms, Hai said.