Export of farming products falls due to container shortage

In the first half of January, Vietnam’s coffee exports decreased by 46 per cent in volume and nearly 43 per cent in value to 52,000 tonnes and US$95 million, respectively, compared to the same period of 2020, according to the General Department of Customs.

Rice exports also fell sharply by 44 per cent in volume to 131,000 tonnes and 38 per cent in value to $72 million. 

Fruit and vegetable exports reached $130 million, 33 per cent lower than the same period of last year.

The general department said other farming products also saw a strong reduction in export value during that period, including tea (22 per cent) to $6.6 million), pepper (10 per cent) to $21 million and seafood (14 per cent) to $278 million).

The reduction in exports of those key agricultural products was mainly due to a severe shortage of empty containers. Therefore, agricultural products exported in January had very high shipping costs.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood businesses said that in January, the freight to Europe continued to increase strongly by between 145-276 percent, depending on the port. 

Specifically, this freight at the main ports surged by 145 per cent to $7,000 per container in January 2021 from $2,850 in December 2020. Some firms increased the freight from $2,800 per container to $10,550.

The same situation happened at US ports. The freight in January increased by 14 per cent to $4,000 per container for shipping goods to the West coast and by 14-19 per cent to $5,600-5,850 per container to the East coast. It also increased from $50-100 per container to Japan’s ports.

Do Ha Nam, vice chairman of the Vietnam Cocoa and Coffee Association, said the shortage of empty containers to transport coffee has led to stagnant exports in many countries and lower supply in consumption markets.

A survey carried out by the Vietnam Pepper Association in January 2021 for some pepper agents and cooperatives in Dong Nai Province showed that pepper inventory is still large, excluding the volume that has been sold but not yet shipped. That was due to high freight and the shortage of empty containers.

According to domestic and international logistics experts, the serious shortage of empty containers will last at least until the end of the first quarter this year.

In the long term, Vietnam should have a strategy to reduce dependence on international shipping companies as present, including encouraging investment in the development of container shipping fleets and factories producing containers, they said.

One of the most important solutions which could be deployed at present is to free up containers of imported goods and to move them in the most reasonable and fast manner to have more containers for shipping export goods.

According to Nguyen Duy Hong, deputy general director of the Smartlogs Supply Chain Solution Corporation, there are about 300,000 20-feet empty containers circulated among seaports in Vietnam each year.

The circulation is ineffective because empty containers are often sent to major ports before moving to secondary ports for exporters, he said.

If it is organised properly, many containers will be used to transport export goods quickly, Hồng said. 

He cited as an example, the technology process will optimise the use of containers by moving empty containers from importers directly to exporters and to flexible locations according to regional needs. It will create favourable conditions for businesses to have empty containers for shipping export goods, he said.