Increase in container handling fees by approximately 50%
Revised Article:
Hey there! Let's get to the bottom of why shipping costs in Vietnam are giving some industry experts a headache.
In the bustling city of Ha Noi, it's been said that the past decade has seen a substantial increase in the good ol' container handling surcharges and terminal handling charges (THC) for our valued cargo owners. And it ain't just a minor uptick, mate - this rise is around 50%, according to the Việt Nam Ship Agents and Brokers Association (Visaba).
Back in 2013, THC fees for containers handled at our seaside ports were a relatively reasonable $90 for a 20-foot container and $140 for a 40-foot container. But fast forward to 2023? Those figures have now ballooned to a hefty $125 and $195, respectively.
So, what the heck is this THC, you ask? It's basically a fee slapped onto shipping lines by the big guns to recoup the expenses of cargo handling at ports, such as moving containers around like chess pieces between the staging yard and the goodship wharf.
Now, while this charge might seem like standard global practice, recent numbers suggest that shipping lines operating in Vietnam are handing over a rather meager 40% of their THC haul to our local seaports. On average, they're collecting around $173 per container, but our ports are receiving only roughly $69.
That's a far cry from our neighbors in Thailand and the Philippines, who are in a much more equitable position, with shipping lines stumping up around 72% and 73% of THC to their ports, respectively. Even the higher-cost operation ports of Singapore see 58% of THC going their way.
With over 90% of Vietnam's import-export cargo being towed by foreign shipping liners, primarily the top 10 global carriers, these charges have become a substantial pot of gold for international operators.
Now, here's where things get a bit sticky: the lack of oversight has allowed these foreign carriers to jack up surcharges without providing concrete reasons, especially during market wobbles. At times, THC charges have even jumped by 10-20%, even when global freight rates plummeted or turned negative.
And cargo owners face more than just THC - they're being hit with a whole host of other fees, including container imbalance charges, fuel price adjustments, and cleaning fees.
Goods loaded at Tân Vũ Port in Hải Phòng City. Shipping lines operating in Việt Nam pay local seaports loading and unloading fees amounting to just 40 per cent of the THC they collect. - VNA/VNS Photo
The authorities have decided to do something about it by issuing Circular 31/2024, which aims to tighten the reins on port-related charges. The circular requires declarations of service prices for tasks such as container loading/unloading, cleaning, and handling of dry, bulk, and liquid goods to promote increased transparency and fairness.
Visaba has made some noise about the need for a more coordinated approach from Vietnamese authorities. They're even suggesting giving international consultants the green light to audit and oversee THC and other surcharges imposed by foreign carriers. After all, it's about time those foreign carriers play fair and square, don't you think?
In the revised regulatory landscape of Vietnam, Artificial Intelligence might play a pivotal role in monitoring and auditing shipping charges, ensuring fairness and transparency in the business sector, particularly in relation to terminal handling charges (THC) and other surcharges imposed by foreign carriers. This could potentially reduce the disputes arising from the disproportionate allocation of THC revenue between shipping lines and domestic ports, thereby fostering better harmony between the warring factions of the industry, finance, and business.
As the authorities strive to enhance oversight and regulation, the integration of AI could revolutionize the way port-related charges are perceived, scrutinized, and managed, ultimately bringing Vietnam's port operations closer to the equitable positions enjoyed by neighboring countries such as Thailand and the Philippines. This approach, if implemented successfully, could potentially rewrite the financial narrative of Vietnam's shipping industry, serving as a beacon of reform for the global finance and business community.
