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Import-export fees: VN businesses inferior at negotiation table
Vietnamese businesses now have to pay a lot of unreasonable fees set by foreign shipping agents. And they have to accept this because they cannot rely on domestic services, and also because Vietnamese businesses are always at a disadvantage at the negotiation table.
The deputy director of a big Vietnamese shipping firm admitted that Vietnam does not have any ship that can carry goods to the US or Europe. There are only three shipping firms in Vietnam big enough to carry out trans-ocean shipping. However, the firms hesitate to carry goods to the US because their staffs are not qualified enough in foreign languages, do not well understand US laws. Moreover, the ships cannot meet requirements of safety and environmental protection set by modern countries.
The deputy director added that his fleet can carry goods to Cuba, Argentina or Brazil; however, it failed to take goods to the US due to a lack of knowledge about the US law on coast protection. One of his ships once carried goods to the US but could not dock at the port. It had to return to Vietnam, for which the company had to compensate the importer.
“European standards and requirements prove to be even stricter, which force us to consider thoroughly before accepting carrying goods,” he said.
The director of an export company also said that he cannot charter a Vietnamese ship to carry goods to Europe, the US, or Asia, since Vietnamese ships, after fulfilling the orders, do not have anything to carry on the way back to Vietnam.
According to Pham Xuan Hong, Deputy Chairman of the Vietnam Textile and Apparel Association (Vitas), foreign partners always appoint shipping firms, while Vietnamese companies do not have the right to choose shipping firms. The only thing they have to do is to contact the shipping agents in Vietnam, and fulfill the procedures and pay the fees required by the shipping firms.
The director of a Vietnamese company, which acts as an agent for many big shipping firms in HCM City, said that many shipping firms play tricks in asking Vietnamese companies to pay all the fees they require. Meanwhile, Vietnamese companies, due to a lack of knowledge, have to play the games set by the foreign firms.
Taking legal proceedings against foreign shipping firms?
Tran Huu Huynh, Head of the Legal Department under the Vietnam Chamber of Commerce and Industry (VCCI), said that the Ordinance on Fees and Charges clearly stipulates all the kinds of fees and charges. The fees that shipping firms are collecting now have been set based on international practice and commercial customs. However, Huynh emphasised that fees can be collected only after agreements can be reached between involved parties.
Huynh cited THC (terminal handling charges) as an example, adding that the THC collection only began after the Far Eastern Freight Conference (FEFC) and Informal Red Sea Agreement (IRSA) successfully negotiated with VCCI.
Huynh said that if Vietnamese enterprises find the fee collection unreasonable, they can take legal proceedings against foreign shipping firms in accordance with the Competition Law.
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Logistics expenses in Vietnam double those in the region
Most participants at the Vietnam logistics conference held on August 27 in HCM City said that the infrastructure of the logistics industry remains very poor. Vietnam now still does not a deep water port which can serve as a national gateway, while it also does not have a strategy on logistics industry development.
R. Gopan from Frost & Sullivan said that a lot of depots in Vietnam built before 1975 are still being used and clearly cannot meet international standards. Especially, Vietnam’s seaports are not designed to fit the modern commodities handling.
Vietnam now has 800 logistics companies which are enough to meet 25% of the domestic demand. The companies only focus on several services in the big value chain of the logistics industry, which spells that other sectors of the logistics industry have been taken by international companies.
Currently, the logistics fees in Vietnam are nearly double those in industrialised countries.
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