Tuna export face difficulties due to the increase in freight rates

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Processing tuna for export. Photo: T.H

According to the Vietnam Association of Seafood Exporters and Producers, increased freight rates do not address the supply chain delays that shipping lines are facing due to the recent outbreak of the Covid-19 pandemic in Vietnam's large ports, causing congestion.

Recently, Maersk Company released a statement saying it is monitoring the pandemic situation and operational restrictions at the main ports. For example, the current waiting time for container ships at the Port of Long Beach, USA, is 38-40 days. The Danish shipping company is also closely monitoring the situation in China, especially Ningbo as an important route for world trade.

The notice also said that Bac Luan city is experiencing a Covid-19 outbreak and that of the five container terminals in Ningbo, three are located near the pandemic area but still operating with no positive cases reported.

Businesses said they are still incurring high freight rates for canned tuna products. A Bangkok cannery company mentioned that they had to pay between US$8,000 and US$13,000 for a 20ft container to the US. Now, this fee has increased 3-4 times compared to a year ago. In the US, often importers buy at FOB, which means they have to cover the freight rates themselves. Given the large sums that US importers have to pay, they can delay their orders, but no one can predict when freight rates will likely return to normal.

Freight rates to Europe vary depending on the destination. However, it is suggested that the freight rates from Ecuador to the EU are much cheaper than from other supplies. Therefore, this could make it difficult for global canners to compete in the EU market. Ecuadorian canners have been the leading exporter of canned tuna to this market segment for many years.

Merchants said a 20ft container shipping canned tuna products from Ecuador costs about US$2,000, while from PNG is double. Shipping containers from General Santos, Philippines, and Ho Chi Minh City, Vietnam, to the EU cost about US$9,000, making canned tuna products from this country the most expensive. Containers from China are similarly priced.

According to the Ministry of Agriculture and Rural Development, in the past two years, the Covid-19 pandemic has had a great impact on export transport, sea freight rates alone increased up to 400-500% and, in addition, there was a lack of containers for transport.

With the above situation, the Ministry of Agriculture and Rural Development has sent an official dispatch to the Ministry of Transport requesting coordination in solving problems in sea transport and prioritizing refrigerated containers for export of agricultural products.