HANOI, Vietnam: Bien Dong Shipping Company General Director Bui Quoc Anh said shipping charges were at a peak and the volume of exported goods was high in July, before the US financial crisis struck, sending shockwaves around the world. Now, with Japan, the UK, the US and Germany in recession, the huge price cuts offered on shipping fees indicate Vietnam’s economy will also be swamped by the tidal wave of gloomy economic news.
Vietnam’s government has already cut its 2008 economic growth target twice this year to 6.7 per cent from the 9 per cent target it had at the start of this year.
The government has also been struggling to bring the nation’s widening trade deficit under control.
From January to October, the trade deficit ballooned to US$16.3 billion as demand for imports by Vietnamese consumers outstripped the value of exports. The full year trade deficit is estimated to reach $19 billion as the nation continues to import more than it exports.
Bien Dong Shipping Company’s Anh said the shipping sector had already noticed a downturn in exports, with lower demand for shipping services forcing companies to lower fees.
Shipping a 20-foot container from Vietnam to Europe now costs $300, down from $1,300 in the second quarter, while the cost of shipping a container to Brazil via China is less than $10 a ton now compared to $80- 100 per ton in the middle of the year, he said.
Anh, whose company has a 15 per cent share of Vietnam’s domestic and international sea cargo sector, said domestic charges had also fallen. International transport companies dominate Vietnam’s sea cargo market, with an 80 per cent marketshare.
Shipping a 20-foot container from the north of Vietnam to the south now costs VND4.8 million ($280), down from VND5.8 million to VND6 million ($341-353) but it only costs VND3.8 million ($220) to send a container in the opposite direction.
Tran Huy Hien, general secretary of the Vietnam Freight Forwarders Association, said the impact of the global economic downturn on Vietnam had taken international shipping lines by surprise.
Hien said shipping companies had forecast high growth for Vietnam’s economy and exports over the course of this year so they scheduled many ships to Vietnamese seaports during the early months of this year. -Agencies

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