Despite high demand, Vietnamese exporters are struggling to send their goods abroad because of a nearly five-fold year-on-year surge in container shipping costs. Shipping costs from Asia to Europe rose above $10,000 per container for the first time on record last week. According to the Drewry World Container Index, this is a 485 percent increase year-on-year.
CEO of Prime Logistics Vietnam, Ho Van Hiet, said that while foreign direct investment giants with established contracts are mostly unaffected by the price increase, small and medium Vietnamese exporters were fighting to secure container slots for their shipments.
Nguyen Dinh Tung, CEO of fruit exporter Vina T&T, said that that rising transportation costs has become a global issue and it has pushing smaller companies out of the market.
A shortage of containers also means longer transportation time and this affects the export of some products like fruits. Mangoes from Vietnam, for instance, can be preserved for 35 days. Before, it took 25 days to deliver the product to Western buyers, but now it takes 30-35 days, Tung told local media, adding that many buyers have stopped importing because there is not enough time to sell the products.
Industry insiders say that container transportation charges have risen as demand rises in the Europe and the U.S., with their economies beginning to recover from Covid-19 impacts. Companies are beginning to restock and make more purchases.
Photo source: Dreamstime.com