Vietnam Mulls Law Requiring Shipping Companies to Publicize their Freight Tariffs

September 24, 2015 Posted by Vietnam Briefing Reading Time: 4 minutes

HCMC – The Vietnamese government has announced that it is considering implementing a new decree that would require shipping companies to publicize their freight tariffs (including surcharges and commissions paid to brokers) on both their own websites and on the Vietnam Maritime Administration’s website.

According to the government, the decree is intended as a tool to protect importers and exporters. A recent government audit revealed that many shipping lines operating in Vietnam impose an average of 70 kinds of surcharges, many of which are “unclear” and/or unreasonably high. Key areas of concern were in terminal handling charges, container clearance, and maintenance.

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Vietnam is currently accepting opinions from the public about the possible implementation of the new decree. A range of foreign logistics firms have already expressed their dismay about the possible implications of the law if it were to be enacted.

Chief among their concerns is the fact that container freight activities around the world are generally transacted through confidential contracts, therefore, the worry is that, if firms are forced to reveal this information, this would give a competitive advantage to rival companies and customers. This would also have knock-on negative effects to trade in general for Vietnam since companies may switch their operations to other countries.

Vietnam’s logistics market is currently worth around US$60 billion. In total, there are around 1,000 logistics firms. Foreign firms of note are Maersk Logistics, APL Logistics, NYK Logistics, and MOL Logistics. Most foreign firms can offer third or fourth party logistics (3PL or 4PL) services while Vietnam domestic firms can only handle 2PL services.

There are currently around 40 foreign shipping companies operating in Vietnam. These companies handle about 88 percent of all cargo and account for the majority of shipments to and from Europe and the United States. Foreign logistics firms in Vietnam currently hold 80 percent of the logistics market share, worth US$48 billion.

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Transportation services (road and ocean) are currently the largest subsectors. The ocean shipping services are dominated by joint ventures while road-shipping services are mostly handled by domestic firms. Cold Chain (storage and cold transportation), however, is considered the sector with the most growth potential for foreign investors.

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