Shipping fees weigh down exporters

The government is now looking at what fees can be collected and how they should be declared to relevant agencies.

The current problems have arisen, at least in part, because the surcharges are not regulated by the government.

According to Ministry of Finance (MoF) report, 19 foreign shipping lines that dominate Vietnam’s logistics market are imposing close to 70 various kinds of surcharges, many of which are “unclear” and unreasonably high.

The surcharges accounted for 34.4% of the US$3.53 billion in total fees collected by the shipping companies in the 2013-2014 period.

Nearly half of the surcharges were terminal handling charges (THC) that container lines levied on shipping companies, which the ministry said were higher than the fees charged by Vietnamese ports.

The shipping agents collected US$88-US$131.5 per container, as THC, while local ports only charged US$46.1-US$69.1.

A representative of the Vietnam Association of Seafood Exporters and Producers said at a recent forum that measures were needed to stop “unreasonable fees and charges” that were placing a crippling burden on local exporters. Such surcharges include THC and container imbalance charges.

“We have to pay too many kinds of fees and charges, and we want local authorities to determine whether these fees and charges are legal,” he said.

The government ordered that the Vietnam Shippers’ Council collaborate with relevant agencies to help its members switch to cheaper means of freight, while negotiating with shipping lines to scrap unreasonable surcharges.

The MoF explained that Vietnamese importers mainly bought goods according to cost, insurance, and freight (CIF), an arrangement whereby their foreign partners choose shipping lines and forwarding companies, leaving local businesses with no right to negotiate the surcharges imposed upon them.

Deputy Minister of Transport Nguyen Van Cong, who is in charge of maritime activities, said that the main problem businesses had with surcharges was that shipping lines collected them without advance notice, or at very short notice.

He also said his ministry was drafting a circular that would require shipping lines to declare their fees to state management agencies and register them for a certain time before they became applicable.

“This circular would allow traders to file complaints with state agencies about any surcharges they found unreasonable, and would compel shipping companies to clarify their fees,” Cong said.

The Vietnamese government’s move is also aimed at following state requirements on boosting exports, curtailing inflation, and protecting local enterprises.

As of last October, some 40 foreign shipping lines were operating in Vietnam, handling around 80% of all cargo, according to the Vietnam Maritime Administration.