Seaports loosing money because of rules

Laws - The Viet Nam Seaports Association has asked the Government to come up with a solution to deal with financial losses which have led to a weakening of the domestic seaport logistics industry.

Ho Kim Lan, general secretary of the association, said the cost of handling a container was at least US$60-70 per unit but at some sea ports, Vietnamese logistics service providers were only permitted to charge $30 for a 20-foot unit and $50 for a 40-foot unit.

A reduction in storage fees had also led to losses at sea port companies, he said.

Shipping companies had not made their clients aware of the fee reduction and in turn put the discount into their own pockets, said a representative of the Marine Brokerage and Agent Association.

"If the situation continues, the Vietnamese companies will be forced to sell their businesses to foreign firms or partake in joint ventures because the logistics industry needs significant investment," said Lan.

In fact, the warehouse system operated by domestic logistics companies could not meet demand while at the same time, foreign companies had invested in logistics at Viet Nam's seaports, said Tran Huy Hien, general secretary of the Viet Nam Freight Forwarders Association (Viffas).

Currently only 10 per cent of Vietnamese logistics companies held 25 per cent of the logistics market. Almost all of them had been forced to join with foreign partners to take advantage of their networks, warehouses and global technology, he said.

Viet Nam's logistics companies were only able to meet basic service needs due to their short delivery routes, and poor technology and equipment. Transportation was often delayed and the client had to hire many agents to get customs clearance for their goods, a representative of NYK LINE Viet Nam Shipping told HCM City Legal Affairs Newspaper.

Viet Nam's logistics industry was weaker day by day due to fierce competition with foreign companies, said Hien. International forwarding services had been investing in Viet Nam since last year and gradually begun to dominate the market.

Around 60 per cent of the country's commercial value came from logistics services, which made up between 15-20 per cent of the GDP, Hien said.