Foreign vessel fee suddenly increased, exporting businesses face even greater difficulty

Increase fees without reason?

In early February 2024, foreign shipping lines simultaneously announced a 10-20% increase in fees and surcharges for each type of container service for exports, applicable only in Vietnam.

It is worth noting that shipping lines have continuously increased fees and surcharges without basis, suddenly and multiple times, without complying with the regulations of the state management agencies. The increase is much higher than the container handling fees that shipping lines return to Vietnamese seaports.

Vietnamese export enterprises believe that, at a time when the Vietnamese economy is directly impacted by the global economic slowdown, the fees and surcharges, even with slight fluctuations, affect the effectiveness of negotiations and the search for contracts by businesses.

“The fees for loading and unloading and container storage are not too high, about a few hundred thousand per container, but there are other things too, such as: electricity, fuel, each type increases a little… then the security fees of the shipping lines, the transportation fees have also increased, making the overall costs of businesses increase significantly. Especially logistics costs, recently, shipping lines have increased prices, especially for exports to Europe and America,” said Mr. Nguyen Quoc Anh, Director of Duc Minh Rubber Company – Chairman of the Ho Chi Minh City Rubber and Plastic Association.

The increase in fees and surcharges by foreign shipping lines is implemented 1 month before the effective date of Circular No. 39/2023 of the Ministry of Transport on the price framework for pilot fees, fees for use of bridges, wharves, berths, floating equipment, container handling services, and pilot services at Vietnamese seaports as of February 15, 2024.

Changing the prices of foreign shipping lines only needs to be announced 15 days before the adjustment without needing to go through inspection or explain the elements of fees and surcharges. Their pricing practices, which are “blameless”, make it even more difficult for Vietnamese businesses, which are already facing difficulties.

“It is difficult now, with the difficulty of transporting goods having to increase transportation costs, now there is also the issue of freight and surcharges for maritime transport, which is really difficult for businesses. This issue needs to be recommended to the Ministry of Transport, there should be mechanisms, regulations for foreign shipping lines even though they have a monopoly. It is also necessary to recommend or sit down together to agree to help the business, which is already difficult, with this additional issue, export activities will suffer great losses and come to a halt,” shared Mr. Nguyen Van Khanh, Vice Chairman and General Secretary of the Ho Chi Minh City Leather and Footwear Association.

Avoid excessive charges, need to be included in the law soon

According to businesses, most of the price increases are much higher than the container handling fees that shipping lines return to Vietnamese seaports. To control the self-increase of fees and surcharges, it is difficult to control even when the management agencies intervene. Because of the transportation of goods by sea, foreign shipping lines almost hold a monopoly. Furthermore, we do not have regulations and sanctions for the price increases of foreign shipping lines.

According to the Vietnam Shippers’ Association, our country can strengthen control over foreign shipping lines to protect the legitimate rights and interests of businesses and the country. Each year, Vietnamese seaports handle about 15 million containers of goods for import and export, bringing in about 3 billion USD in revenue. This is a huge potential that foreign shipping lines cannot ignore.

Mr. Phan Thong, Secretary General of the Vietnam Shippers’ Association, proposed that relevant agencies have strong measures to control the adjustment of fees and surcharges by foreign shipping lines. Implement additional surcharges for container transportation services by sea in the list of goods and services subject to price declaration to complete the management mechanism and issuance. Avoid arbitrary price increases and excessive charges. In the case where these surcharges are super-profitable, the functional agencies need to apply a special consumption tax policy.

Currently, the Vietnam Shippers’ Association has proposed to the Prime Minister, the Ministry of Finance, the Ministry of Transport, the Ministry of Industry and Trade, the Price Management Department, and the Vietnam Maritime Administration to request ship owners to immediately stop charging unreasonable fees; at the same time, the relevant ministries recommend that the Prime Minister soon issue a mechanism for managing the fees of foreign shipping lines operating in Vietnam that is suitable for international practices.

“We must create a mechanism to ensure that this management is implemented smoothly… the issue lies there. As for price management, it is one of the administrative measures. But if our Vietnam operates according to market mechanisms, in order to manage the market, it must be included in the law, related laws such as the Commercial Law, Maritime Law… need to be adjusted and supplemented. Then the functions of the state agencies in terms of technique that shipping lines will implement to be able to control this issue,” proposed Mr. Thong.

To implement and carry out smoothly and harmonize the interests, in accordance with international practices, even though it is difficult and there are expected to be different opinions and broader issues. It is necessary to have forums, the strong participation of many units to soon resolve difficulties for domestic import-export businesses, protect the position of the Vietnamese maritime industry.