Vietnam exporters concerned as rising shipping costs hit profits

15 Aug '24

2 min read

Vietnam exporters concerned as rising shipping costs hit profits

Pic: Adobe Stock

Insights

Shipping fees for major routes from Vietnam to the EU and the US have significantly risen, hitting profits of Vietnamese exporters, who are concerned about their competitiveness.
A severe shortage of containers has made booking a ship a challenge as well.
Chinese exporters put down large sums of money to book containers in advance, driving prices even higher

Shipping fees for major routes from Vietnam to the European Union (EU) and the United States have significantly increased, affecting profit margins of Vietnamese exporters, who are now quite concerned about their competitiveness in the international market.

In recent weeks, the cost to transport a container to Europe reached $4,000-5,000, more than double what it was during the same period last year, and the same for the United States has risen to $6,000-7,000.

Transport costs per container to closer destinations like China, Japan and South Korea have also increased by an additional $1,000-2,000.

There is a severe shortage of containers as well and that has made booking a ship a challenge, according to a domestic media outlet.

Industry insiders said the shortage had never been addressed since the COVID-19 pandemic; rather it had been made worse by recent geopolitical tensions.

Moreover, Chinese exporters had been willing to put down large sums of money to book containers in advance, driving prices even higher.

The country’s ministry of industry and trade has suggested businesses to explore alternative routes and means of transport as a cost-cutting measure. However, experts felt it was only possible for small orders and short-term contracts.

Rerouting goods may also lead to additional customs duties and procedures, complicating and prolonging the delivery.

Fibre2Fashion News Desk (DS)

More Textiles News - Vietnam...