Vietnamese exporters hit hard by rising logistics costs

Several Vietnamese export companies have cancelled some orders due to rise in logistical expenses following the sharp hike in fuel prices. Shipping lines have raised freight rates, adding a cost of at least 30 million VND ($1,314) to every container shipped to China. However, higher freight rates do not necessarily lead to better service.

Le Thi My Hanh, general director of Banana Brother Farm, said costs had increased by 3-4 million VND ($131-$175) per truck to transport bananas from growing regions to border gates or seaports.

For Ngo Thi Hong Thu, general director of Ameii Vienam, as logistic costs were climbing beyond her firm's capacity, it had to decline several long-distance orders from its foreign partners. Farmers will also suffer as they will get a lower price for their products, she explained.

Ngo Tuong Vy, deputy director of Chanh Thu Fruit Export and Import Ltd., said her firm had never gone through such a tough time and had no choice but to price up its products to cover the mounting costs, according to a report in Vietnamese media outlet.

Nguyen Hoai Nam, deputy general secretary of Vietnam Association of Seafood Exporters and Producers, acknowledged that logistic costs are $5,000-$10,000 higher than 2020 rates for every container to Europe or the United States.

The secretary said that some shipping lines frequently delayed shipments for 10-30 days for no reason, compounding the situation.

Source: Fibre2fashion