Foreign shipping lines in Vietnam suspected of ripping off customers

Thanh Nien News

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Containers lined at Dinh Vu Port in the northern city of Hai Phong. Photo: Reuters Containers lined at Dinh Vu Port in the northern city of Hai Phong. Photo: Reuters

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A recent inspection by the Ministry of Finance has found 20 foreign shipping lines that dominate Vietnam's logistics market imposing nearly 70 kinds of surcharges on customers, many of which were "unclear" and unreasonably high.
The surcharges accounted for 34.4 percent of the total fees of more than VND77.1 trillion (US$3.53 billion) the companies collected in 2013-14, the ministry said in a report to the government.
Nearly half of the surcharges were terminal handling charges (THC), which, it said, were "much higher" than the fees charged by Vietnamese ports.
The shipping agents collected $88-131.5 per container as THC while the ports only charged $46.1-69.1.
Though the companies said the difference was because they also have to pay ports en route, not just Vietnamese ones, the ministry dismissed the claim as "baseless".
The companies were "unclear" about some surcharges like container clearance and maintenance, it said further.
As of last October around 40 foreign shipping lines were operating in Vietnam, handling around 88 percent of all imports and exports, the Vietnam Maritime Administration reported, adding that they accounted for nearly 100 percent of shipments from and to Europe and the US.
Government control?
To end the dubious regime, the finance ministry said the government should issue rules regulating what fees can be collected and how they should be declared to relevant agencies.
The current problems are partly due to the fact that the surcharges are not under the government oversight, it said.
Another reason is that Vietnamese importers mainly buy goods at cost, insurance and freight, or CIF - an arrangement in which their foreign partners choose shipping lines and forwarding companies -- leaving local businesses no right to negotiate any surcharge, according to the ministry.
It urged relevant agencies to draw lessons from other countries to change the way goods are imported and exported so that Vietnamese traders can have a say on freight charges and surcharges.
Speaking at a National Assembly meeting on amendments to the Maritime Code of Vietnam on Monday, lawmaker Nguyen Phi Thuong from Hanoi also said official oversight is needed to end the unreasonable freight surcharges that burden businesses.
He quoted statistics showing logistics costs in Vietnam amounting to 20 percent of the country's gross domestic product compared to 10 percent in developed countries like the US, Japan, and Singapore.
A study showed that an increase of 10 percent in transport costs leads to a reduction of 20 percent in the volume of goods trade, he said.
Not that much
In an interview Tuesday with news website VnExpress, Deputy Minister of Transport Nguyen Van Cong, who is in charge of maritime activities, said shipping lines collect 40 surcharges, and the number of extra fees mentioned by the finance ministry was higher probably because traders had different definitions for surcharges and listed optional fees as well.
What businesses mainly complain about surcharges is that shipping lines collect them without advance notices or at short notice, he said.
He said his ministry is drafting a circular that would require shipping lines to declare their fees to relevant state agencies and register them for a certain time before they become applicable.
It would also allow traders to file complaints with state agencies about any surcharges they find unreasonable, and shipping companies would then have to explain about them, he added.

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