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Wednesday, June 19, 2024

Shipping rates rise by a whopping 73% from Vietnam to US, Canada

The ongoing tension in the Red Sea has significantly impacted businesses in Vietnam, leading to increased costs for overseas shipments. According to media reports citing data from the Ministry of Transport’s Vietnam Maritime Administration, shipping rates from Vietnam to the US and Canada have surged by 55-73% compared to rates at the end of last year.

Moreover, shipping rates to Europe have experienced a three to four-fold increase, reaching $4,350-4,450 per container. Major shipping companies have also begun imposing peak season surcharges on top of these freight hikes, further exacerbating the cost of shipping for businesses.

These developments pose considerable challenges for Vietnamese businesses reliant on international trade. The sharp rise in shipping rates adds significant financial strain, potentially impacting profit margins and overall competitiveness in the global market.

Businesses may need to reassess their supply chain strategies and explore alternative shipping routes or transportation modes to mitigate the impact of soaring shipping costs. Additionally, stakeholders may need to collaborate closely with shipping companies and government agencies to explore measures to stabilize shipping rates and ensure the continued flow of goods in and out of Vietnam amidst the challenging maritime environment.

Le Quang Trung, the Vice President of the Vietnam Logistics Business Association, has acknowledged the concerns surrounding the surge in shipping costs due to the tensions in the Red Sea. He suggests that regulators should intervene by issuing policies and rules to manage prices, fees, and surcharges related to shipping.

The call for regulatory intervention reflects the urgency of the situation for businesses in Vietnam, as they grapple with escalating transportation costs that threaten their profitability and competitiveness in the global market. By implementing policies and rules to manage pricing dynamics, regulators can help mitigate the adverse impact of surging shipping rates on businesses, thereby promoting stability and sustainability within the logistics sector.

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