A CMA-CGM's cargo ship at Germanlink Int'l Port in Ba Ria-Vung Tau province. (Photo: baochinhphu.vn)Le Thi My Hanh, general director of Banana Brother Farm JSC., noted that costshad increased by 3-4 million VND (131-175 USD) per truck to transport bananasfrom growing regions to border gates or seaports.
Shipping lines have raised freight rates, adding a cost of at least 30million VND (1,314 USD) to every container shipped to China.
As her firm has been in a dire situation since last year due to the pandemic,mounting transport bills are adding to its woes.
"Due to high costs, we planned to export 40 banana containers to China inFebruary but have been able to export just 12 so far," said thegeneral director.
Ngo Thi Hong Thu, general director of Ameii Vienam JSC, admitted thatlogistic costs were climbing beyond her firm's capacity.
Accordingly, the firm has to decline several long-distance orders from itsforeign partners because of high transport costs.
She also believes that not only firms but farmers will suffer fromthe blow.
"Firms are struggling to cover rising logistic costs. Given the situation,farmers' produce will be bargained down," she explained.
Ngo Tuong Vy, deputy director of Chanh Thu Fruit Export and Import Ltd., saidthat her firm had never gone through such a tough time as now.
Her firm, which has not recovered from the pandemic shocks, isexperiencing new issues from rising fuel prices and rising logisticcosts.
She revealed that the firm had no choice but to price up its products to coverthe mounting costs.
"Costs are going up, so fruit prices will be adjusted up at least 5-10 percent accordingly. However, higher prices normally erode competitive advantages,increasing business risks," she said.
Nguyen Hoai Nam, deputy general secretary of Vietnam Association of SeafoodExporters and Producers, acknowledged that logistic costs were 5,000-10,000 USDhigher than in 2020 for every container to Europe or the US.
However, higher freight rates do not necessarily mean better service.
The secretary said that some shipping lines frequently delayed shipments for10-30 days for no reason, compounding the situation.
"Firms not only have to pay higher freight rates but also to compensatetrade partners for late delivery," he explained.
According to Van Nhat Tung, marketing manager of CMA-CGM Vietnam JSC, freightrates have soared to around 16,000 USD per container to Europe lately, fromjust 5,000 USD per container in early 2021.
He said the rates were expected to continue to rise in March.
"The freight rates in March depend on the number of slots booked byclients. It seems that the rates are likely to go up," said the manager.
He also underlined mounting fuel prices and high demand for slots as themain reasons behind rising freight rates at the beginning of 2022.
As high logistic costs pose significant risks to exporters, experts arecalling for immediate actions to defuse the situation, including curbing fuelprices.
"The State slashed fuel tax and offered loans of trillions dongto the airline industry to lift it out of hardship. Now, it's time to dolikewise to agricultural exports. For instance, the State could grant fuelsubsidies to transport firms, processing firms and export firms to help themcut costs," a logistics expert said./.
VNA
