Maritime agencies’ fee should be under discussion

(Vietnam Logistics Review)The world’s and Vietnam’s transport at the present have been in a dismal situation. Free competitions, arbitrary discount benefit foreign liners only. The maritime is going downwards. And Viet Nam Ship Agents and Brokers Association (VISABA) should have discussion about competitions on the maritime agencies’ fee

TREND OF SEA TRANSPORT IN VIETNAM AND IN THE WORLD

Liners have been using large vessels to cut cost on main routes as Europe- North America, trans-Atlantic and designing vessels of 19-20,000TEU, Ultra Large Crudeoil Carrier, and bulk-cargo vessels of 500,000DWT,

In the field of container transport, large shippers have cooperated to gain markets and to increase their competition abilities. In the past few years, there have been alliances operating in the field of container transport established… among which is P3 – an alliance including the largest liners in the field of container transport, with total capacity accounting for 36% of the world’s capacity. The alliance starts to operate in August and September this year.

In the situation of integration in Vietnam and of implementing WTO commitments, liners and foreign maritime service agencies have changed their operating models in Vietnam in succession, creating fiercer competitions in the maritime market.

Also in the situation, the number of Vietnam’s vessels has been on the sudden increase: many sea transport companies and maritime agencies have been established (most of them have small operating capital, no more than 10 companies have capital of over VND 10bn). According to VISABA, Vietnam has built 650 vessels with total capacity of 1.7 m tons, and has bought 150 ones. In recent years, there have been many policies in encouraging international integration, among which are those on maritime sector. In the 4^th meeting of the Party Central committee, a resolution on Vietnam’s sea strategy to 2020 has been issued – an important direction that will bring the sea economy sector, among which is the maritime sector, to an important new strategic position

SEA TRANSPORT IN VIETNAM

Vietnam’s fleet at the present has ranked 5/10 in Southeast Asia. Most of them are small vessels with low capacity: vessels of under 50,000 tons account for 80%; ones of over 150,000 tons, 3%. Although it keeps developing, the fleet has no appropriate structure: special-use vessels account for 3.9%; bulk-cargo vessels, 3.7%. It has no vessels for liquefied gas and chemicals, so it has to leave the field clear for foreign fleets. Foreign fleets have taken 90% of the import-export transport market, and only 10% left for local one.

In maritime market, BDI reached its peak around 12,000 points at the two periods: 2003-2004 and 2007-2008. At the end of 2008, BDI went down to the lowest point of 700 – a signal of recession to sea-transport market and of the start of a serious global crisis (BDI on May 30, 2014 was 934.)

However, at the end of 2008, the world’s economy experienced great changes, resulting in the going-down of international trade.Fleets had no cargo to transport and transport fee was seriously going down.. And activities of selling vessels, hiring them, or building them all halted. Agency and brokerage activities of members of VISABA have faced with difficulties from shippers as reducing costs on services and others.

THE ROLE OF VISABA

At the present, according to the State’s regulation, it is enterprises’ directors who decide the fee. And with a dozen thousands of enterprises operating in the field of port services, there will be a dozen thousands different fees. Agencies have lowered the fees 15-20%, and there have been some lowering their fees 50-80%, which makes fierce competition among Vietnam’s agencies and unknowingly benefits foreign shippers. In Vietnam, maritime service fees as agencies’ fees, counting fee, and providing fee are lower than those in the region. The arbitrary discount and free competition benefit foreign liners only. With existing competitions, it is suggested that VISABA discuss agencies’ fees and its offers to foreign liners.

With 20 years of developing, VISABA has acted as a bridge among State-owned agencies and enterprises in the field of brokerage and maritime agencies. The Association often consult, and propose to relevant departments and sectors issues related to the fields of brokerage and maritime agencies.

The Association with its function to protect benefits of enterprises operating in shipping agencies also proposed to the Ministry of Finance and the Maritime Administration to reduce maritime fees. It is its direction and duty to be the indispensable representative in economic forums and in protecting its members’ interests. Mr. Nguyen Cong Bang, Deputy Director of Transport Department, the Ministry of Transport said:” VISABA has played an important role in informing State’s policies and it has also played an important role in helping the Ministry of Transport issue policies suitable to the sector’s reality.

On June 19th, 2014 VISABA celebrated its 20th anniversary and elected its Executive Board for the 5^th term (2014-2019). The Board includes