Businesses are feverish because of the escalating sea freight rates, shipping lines push responsibility to forwarder agents

Bởi Meksea Team - August 12, 2021 –Import-export businesses said that shipping lines answered “crooked”, lacked frankness and “blamed” businesses, forwarding agents (FWD).

The meeting between foreign shipping lines and businesses in the industry such as seafood, pepper, timber, textiles, leather and footwear, etc… was “hot” with many frank exchanges of opinions.


Businesses “cry” too much to bear

While importers and exporters said that shipping lines answered “crooked” and “blamed” businesses and forwarding agents (FWD), many shipping lines said they could not intervene in the prices of seats of FWD companies, even “blaming” that FWD “self-interest” should increase prices.

It is worth mentioning that many opinions say that, along with high freight rates worldwide, the employees of shipping lines and the “intestinal” FWD  system itself, the “backyard” FWD system of shipping lines push up prices, causing difficulties in delivery booking and causing chaos in the freight market.

According Tran Chau Group Joint Stock Company, a representative of the Vietnam Pepper Association, said that the enterprise exports 300-400 containers every month pepper, but the business has now reduced its capacity by 50% due to high freight and cannot export. “Many businesses in the Association said that in July-August, businesses had signed export contracts but could not book seats. The freight to the US was up to 18,000-19,000 USD/feu (40 feet container) to get it. No other business or industry can afford such a fee”.

In the same scene, a representative of Phu Tai Company (Dong Nai) said that every month, businesses export about 150 containers, but currently the amount of goods exported to the port is very slow, shipping lines delay a lot, currently there are goods at ports always in the situation of about 40 containers lying at the yard every week, causing businesses to incur large costs.


Along with that, a series of industry associations such as seafood, leather and footwear also reflected a dizzying increase in freight rates, causing businesses to reduce profits by 40-50%. Even the representative of the Association of Fruit and Vegetables responded that there was a phenomenon of shipping lines rejecting agricultural products, which are Vietnam’s main export products.

Representatives of some associations reflected that there was a phenomenon where businesses had a booking but lost it, or when the goods got on the ship, they knew that the freight rates and freight rates were very high. Meanwhile, enterprises are not big enough to work directly with shipping lines, but must go through FWDs. Businesses need to clarify the selling price of shipping lines? Shipping lines clarify whether or not the “handshake” to manipulate the market of shipping lines? Or are the employees of the shipping company “self-interest” or not? Can shipping lines control the “intestinal” FWDs? Why is it easier to book through FWD than shipping lines?


Shipping line said “cannot interfere”

Responding to the opinions of businesses in the industry, a representative of Cosco shipping line said that Cosco always prioritizes to ensure the demand for refrigerated containers. At the same time, there is no case loss of booking. Shipping lines welcome business to book directly with shipping line.

Mr. Martin Lin, a representative of Evergreen shipping line, said that the shipping line currently has no shortage of containers due to two sources: empty containers and imported goods. The shipping line has also increased its capacity by 20%, is expected to put into operation more 30 ships with a capacity of more than 2000 teu.


While Cosco and Evergreen representatives were not forthright in the questions of industry representatives, Mr. Julio Bellota, representative of the shipping line CMA CGM confirmed, the price of seats offered by FWDs. “The shipping lines cannot interfere with the selling price of FWDs and cannot work with all retail customers. Especially the US route is a special route, more difficult than every year, it is almost impossible for retail customers to book this route. CMA is still respecting a lot of previously signed contracts”, said a representative of CMA CGM shipping line.

However, responding to the exchanges of shipping lines, Deputy General Secretary of the Vietnam Logistics Business Association (VLA) Mr. Ngo Khac Le said, according to the global container freight rate index – Drewry World Container Index shows that the cost of shipping containers by sea from Asia to Europe increased by over USD 10,000, which is nearly 7-10 times higher than the same period in 2020. This figure is similar in Vietnam market. “With this increase, the shipping line thinks that the increase in freight rates due to FWDs is unreasonable, the difference we have between FWDs and shipping lines is not more than 5%.Therefore, shipping lines say that the “escalating” and chaotic rates come from FWDs is not true. May or not it’s from the “intestinal FWD” of the shipping lines themselves and the shipping lines need to control this system”.


Translated by Tracy



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