Vietnam's exports rebounded rapidly! Sea freight is rising, space is in short supply, and the air freight market is tight!
It is reported that Vietnam’s exports rebounded rapidly after months of anti-epidemic blockade, which pushed up ocean freight. Coupled with insufficient market capacity, cargo owners and forwarders competed for space. At the same time, the air freight market is also tight.
The strict social distancing measures in southern Vietnam ended in October. Prior to this, Vietnam’s GDP shrank by 6.1% in the third quarter. Vietnamese business leaders warned that if the blockade restrictions are not lifted, a large number of orders and investment will be lost.
For example, after many factories were forced to close during the anti-epidemic blockade, the exports of the Vietnamese garment industry in September fell by 18.6% year-on-year.
However, after the blockade was lifted, Vietnam’s exports showed amazing flexibility. The Ministry of Trade of Vietnam estimates that exports will increase by 10% to US$600 billion.
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Jan Segers, general manager of Vietnam's logistics company Noatum, said that Vietnam has performed well after the new crown epidemic. After the terrible GDP in the third quarter, the reopening of factories and the new normal are very exciting.
Segers said: "The end of the year in the West and the Lunar New Year in Vietnam have generated huge demand for freight. Therefore, the lack of container ship capacity and space has led to rising freight rates."
He pointed out: "Freights are still rising, and may continue until January next year." For example, the price of a 40-foot container from Ho Chi Minh City to Los Angeles is about $13,000, and to New York it is $16,000.
Segers added: “The shipper with a fixed contract freight of US$12,000/FEU from Haiphong, Vietnam to Europe cannot obtain a space because the spot freight has exceeded US$14,000.”
"My guess is that the freight rate may fall and stabilize to a new normal level, but it will not be at a very low price level as before. It all depends on how the supply chain congestion problems in the United States and Europe are resolved, so that the container Able to return to Asia."
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Marc Guillhem, owner of Cargoteam, a freight company in Ho Chi Minh, said that in fact, cargo owners and forwarders are "fighting" to obtain container equipment and space, and freight rates are about five times higher than before the outbreak.
Guillhem said that the carrier did not respect the contracted freight rate and, in addition, almost no new capacity was injected into the market because Vietnam was “not their priority”.
"They have made more money in China. However, thanks to some excellent operators, we can still get seats, but we have to fight for our customers every day."
At the same time, Guillhem said that Vietnam's air freight market is still tight.
"We found that the demand for air transportation outside Vietnam is very large, and the aircraft was fully booked a few weeks in advance. We arranged six charter flights in five weeks to serve customers in the United States and Spain."
The cost of air freight from Vietnam to Chicago is as high as US$20 per kilogram.
