Paradoxical seaport charges in central region

Under decisions of the Ministry of Finance and competent authorities, as from 2005, such maritime safety fees as tonnage and narrow passage fees are decreased from 35 to 43% at the central region’s sea ports. It is good news for provinces in attracting inflow and outflow of goods through sea ports, promoting maritime economic growth and export. However, it does not suffice for port authorities to reduce these fees.
According to Nguyen Thu, director of Da Nang seaport, the reduced seaport fees means that the charges will be reduced for handling exports and imports on the spot. For a long time, these port fees have accounted for over 40% of the total cost of sea transport. Several businesses make calculations, saying that it costs five million higher to ship goods from Da Nang port than to get them transported on land route to HCM City for shipment. On average, a container shipment from Da Nang to Singapore costs US$200 higher than from HCM City. Once expenses are reduced, these differences will evidently be diminished. It is noteworthy that by a decision, the MoF has decreased fees for the use of bridges and harbours with regard to imported means and goods. This will encourage more inflow of imports into the central region.
We can find that the port fees rate of the total cost of transport represents a figure comprising all sorts of port fees incurred on an itinerary. If goods are transported from A to B, port fees will be split in two. According to Thu, it costs US$2.50 to load one tonne of cement in bulk at other countries’ seaports in the region against a bit more 12,000 dong at Da Nang port. Maritime safety fees at seaports in the central region are much lower than those in Singapore or Japan.
In a bid to relieve exporters of the burden of sea transport and encourage development of seaports in the central region, the ball is in the court of shipping companies. This is an important point because to them, the handling charge per container at seaports in the central region is higher than elsewhere. A ship that lands at seaports in HCM City can load and unload hundreds of containers whereas only some are charged and discharged in the central region. We have not cited the case in which ships sail to the central region.
These are small ones that collect goods at several seaports on their itineraries. As a result, the total port fees become greater than those for a straight itinerary. Thu affirms that the reduction of port fees depends on industrial production capacity, export and import of businesses in central provinces. With exports being in form of raw materials and imports being exempted from import duties, it is hard to further reduce port fees at seaports in the central region. A strategy is needed to attract inflow of goods via seaports in the central region in the spirit of joining forces of localities.

 

Category: Business