Vietnam: Severe lack of empty containers: a mechanism for development is essential to prevent supply chain interruption

17/04/2021
The Government needs to develop new mechanisms and policies that are attractive enough to create favorable conditions for domestic enterprises to invest more capital in technology ...

The end of the year is usually the peak of empty container scarcity, especially in 2020 due to the impact of the COVID-19 epidemic and complicated weather that has changed the balance of import and export, making the shortage of containers even more severe


In Vietnam, many businesses have to refuse orders or stop signing new contracts with partners because they cannot deliver on time. This has been causing great damage to the business.

According to statistics of the Vietnam Maritime Administration, in January 2021, the total output of goods through Vietnam's seaports was estimated at nearly 55.4 million tons, up 4% over the same period in 2020. In which, the output Container cargo through the port was estimated at nearly 1.8 million TEUs, up 4% year-on-year.

However, the volume of goods exported by containers through seaports has decreased due to the shortage of empty containers. According to the reflection, the shortage of empty containers happened to Vietnam import-export goods owners from around November 2020.

 

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Waiting to get an empty container in Cat Lai port (District 2, Ho Chi Minh City), Nguyen Quang Thang (a container truck driver) had been waiting all night, even a whole day, in order to get the empty container.

According to Mr. Thang, the shortage of empty containers makes drivers lead to huge time consumption and cause traffic jams.

"It can take a day, or a night, and generally around 8:00 pm, it can take place the next day at noon. Where the shipping company approves the orders, we go there and get them. Sometimes we just listen to the driver's words, but if we approve the orders, we still have to go there. One is waiting for the driver, or people move us to another place. "

In recent months, the company of Ms. Nguyen Thi Thao (an import-export business in Ho Chi Minh City) has refused many export orders because there is no place to find an empty container for packing. Not only scarcity, but the rental price of these containers also increased when the shipping lines pushed the prices.

"On the shipping company, the shipowner, they always refuse our booking, because they do not have an empty container to satisfy, we have no options but refuse customers' orders ...".

 

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Not only for exporting enterprises, but many domestic logistics service enterprises also suffer a lot. Explaining this problem, Mr. Le Trung Hieu (Director of Le Tri Transport Company) said that the cause of the scarcity of empty containers is due to the impact of disease and bad weather.

In addition, because Vietnam is a trade surplus country, the return of containers from countries such as the US, Japan, Europe ... is facing many difficulties. In the short term, to overcome, shippers should book earlier with the shipping lines.

Foreign shipping lines also have the responsibility to us, moving empty containers from other markets to Vietnam. In the long term, I think we should also call for investment, proactively produce containers. ”.

Recently, the Saigon Newport Logistics Service Center has also had solutions to focus on investing in infrastructure, improving resources to improve the quality of container shipping services, shorten the turnaround time. container.

In the coming time, the Center will continue to actively promote the attraction and transportation of empty containers between Cai Mep Port and Tan Cang Long Binh ICD, as well as at other ICDs such as Song Than, Nhon Trach, Hiep Phuoc.

Obviously, the long-term measure is that shipping lines need to control their containers better because now big factories also utilize containers for storage.

At the same time, it will speed up the delivery time of empty containers from deepwater ports to the gathering place. Besides, it is necessary to flexibly use empty containers, in which regions, actively take containers in that area to avoid congestion and shortage when focusing on only one place. In addition, technological solutions and early forecasting of supply and demand of the market should also be taken into account by businesses.
 
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In recent days, the shortage of empty containers in the southern region has taken place seriously, pushing thousands of export enterprises into stagnation.

Especially, agricultural and fishery export enterprises are entering the peak of the season. Although many businesses have signed export orders, the collected goods have not been fully empty for packing, have to pity to cancel, miss out on rare business opportunities; and at the same time, limit purchasing to avoid congestion.

This means that the country's production of goods continues to be delayed, budgets decline, workers lose jobs and income sources in the context of epidemics.

Facing this situation, Vietnam Logistics Association has made proposals and proposals. The Ministry of Industry and Trade and the Ministry of Transport also sought to remove it, but there is still no exit.

The reason for the lack of empty containers today is mainly due to the majority of our country's exports by sea for a long time largely dependent on foreign ships. Due to the influence of the Covid epidemic, many countries around the world were blocked, so many shipping lines were unable to enter Vietnam.

That is not to mention, according to research, partly because many countries in the region are also focusing on export, so many shipping lines have given priority to this market. While Vietnam is also in the state of a large trade surplus, pushing the demand for containers to export goods very high. The problem of supply and demand is not solved, so it is scarce.

According to the assessment, the shortage of containers will continue to seriously take place until the end of March and may continue if the epidemic is not controlled. Continuing to push many domestic exporters into extremely difficult positions.

It is worth mentioning that at this moment, many shipping lines, despite customers' difficulties, deliberately raise the shipping rental to catch them; some firms raise prices 10 times higher than before.

In addition, the transfer of containers in many ports is not smooth, the deport (empty container gathering area) is not flexible, in many places, there are empty containers but lack of goods and vice versa.

Currently, the Ministry of Industry and Trade, the Ministry of Transport have reported to the Prime Minister to find ways to overcome; at the same time focused efforts to address difficulties such as requiring shipping lines to report transparently on rates; not allowing individuals to take advantage of them to raise prices arbitrarily; mobilize firms to store and transport containers to transport domestic goods for export.

Regarding the production of Vietnamese branded containers, in fact, there have been a number of domestic enterprises that have invested in building new containers in the past, but ineffective because they are small and lack many sources of structural accessories such as steel and engineering. Other auto technology should give up the field to provide this service to foreign businesses.

This is a very unfortunate thing that Vietnam's logistics services, which are already slow to develop, are even more out of breath.

Obviously, from the current situation of serious shortage of empty containers, in order not to be broken in the process of exporting goods in the coming time, the State urgently needs to create new and attractive mechanisms and policies.

Create favorable conditions for domestic enterprises to invest more in technology as well as provide adequate materials to build new containers; to well meet the needs of goods export in the context of today's ever-deepening integration./.

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