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Foreign shipping firms abusing market position: report

Vietnam's Ministry of Transport has confirmed allegations that foreign shipping lines were imposing unfair surcharges on Vietnamese traders.

Foreign shipping lines have taken advantage of the country's underdeveloped transportation industry to unreasonably collect at least 10 different fees from local customers, the report released Monday said.

For instance, the terminal handling charge, a fee collected by shipping lines to pay container terminals, has been hiked to as much as US$120 per 40-foot container even though many terminals only require a payment of $35.

Since March 2010, foreign shipping companies have collected a container imbalance surcharge, which they say is meant to offset the cost of transporting empty containers out of Vietnam in case exports from the country are unable to match the inflow of goods. But the Ministry of Transport said the surcharge was set arbitrarily and kept changing from time to time.

The ministry also discovered other fees which it deemed irrational, including surcharges for port congestion and container repairs. Some foreign ship owners have authorized agents to collect the fees, and these agents also try to pocket some extra money, the report said.

News website VnExpress, reported on Monday that the surcharges could rake in thousands of dollars for foreign companies on every shipment they made.

The ministry's report comes two months after the government began inspecting on shipping lines in Ho Chi Minh City and Hai Phong following complaints that some of them were imposing excessive surcharges.

Tran Duc Minh, chairman of Vietnam Shippers' Council, told Thanh Nien that the unfair surcharges have been going on for several years. Local traders are forced to accept them because Vietnamese shipping lines fail to meet domestic demand, he said.

The country's fleet of 36 container vessels, mainly owned by Vietnam National Shipping Lines, can only meet 20 percent of transportation demands; traders have no choice but to go for foreign shipping lines, Minh said.

According to the Ministry of Transport, for the long run, Vietnam needs a strong container ship fleet to compete with foreign lines. But right now, Vietnam Shippers' Council and Vietnam Chamber of Commerce and Industry need to negotiate with foreign ship owners to make fees and surcharges more reasonable and transparent.

Minh called for strengthened government oversight to prevent foreign firms from abusing their market position. He also said local traders need to work together and demand foreign shipping lines lower their fees.

He noted that his council, a group of 52 importers and exporters, had organized several meetings to discuss fees and surcharge problems, but only a few companies attended these.