VietNamNet Bridge - “In the old days, ship owners were kings. Now, they are beggars,” a representative of VISABA (Vietnam Ship Agent and Brokers Association) said, speaking about the plunge in bulk sea transport charges.

 


{keywords}


“It is now goods owners who determine the shipping fees, not ship owners. When they have goods that need to be shipped, they will contact ship owners and offer fees of $7 per ton. If no ship owner accepts the price, they would lift the offer price to $8 or more until someone accepts to carry their goods,” said Tuan Linh from VOSCO, a well-known shipping firm.

Ship owners have experienced a tough year 2015 as the shipping fees on all routes dropped sharply compared with the year before. The freight for carrying sliced cassava from Thailand to the north of China dropped to $7 per ton for 20,000 ton ships. Meanwhile, the fee of $10 per ton was offered for 10,000 ton ships for carrying gypsum from Thailand to the north of China. 

In the past, shipowners could earn $6 for every ton of sand it carried from Vietnam to Singapore, but now they can receive less than $3. The fee of carrying limestone and clinker from northern part of Vietnam to the north of China or Taiwan plummeted from $10 to $7 per ton.

Pham Hong Quang from Saigon Gon Cuu Long Logistics Services and Trade estimated that the sea transportation fee in 2015 dropped at least by 20 percent compared with 2014.

It is now goods owners who determine the shipping fees, not ship owners
The sharp fall of the crude oil price in the world market was just one of the reasons behind the shipping fee decrease. 

The main reason was low demand. Meanwhile, goods owners tried to force the prices down because they knew shipowners would rather carry goods at low fees than leave ships ashore.

The BDI (Baltic Dry Index) on December 4 was 563, just a bit higher than the low of 498 on November 20, the lowest figure for November in the last 30 years.

The ship chartering fee has also dropped dramatically. Previously, the fee was $5,000-7,000 per day for a 30,000 ton ship that carried coal on Southeast Asian routes, while it is now $2,500 only. 

In the past, 50,000 ton and bigger ships could be chartered for $12,000 per day, but the fee has dropped to $5,000.

Vietnamese ships mostly run on short-distance routes in Southeast Asia, South & Northeast Asia. 

However, the Northeast Asian routes have fallen into the hands of Chinese shipping firms since they cannot compete in price with Chinese ships.


TBKTSG