To solve the inadequacies and strengthen the seaport service business, the leader of the Vietnam Maritime Administration proposed to adjust a series of important contents in the list of 4 types of service prices at seaports set by the State. 

Statistics from the Maritime Administration show that up to 90% of import and export goods are transported by sea, with high and stable growth in cargo volume at 13.4% per year over the past 5 years. Therefore, the Vietnamese seaport system is increasingly invested in and built in a modern and methodical manner, to accommodate the world’s largest ship size (over 220,000 DWT) and attract nearly 40 major shipping lines in the world to come in and out, with a more competitive service price than many countries.

THE DIFFERENT SITUATIONS OF UNENFORCEABLE COMPETITION

Building a service price frame is not only an effective tool to help Vietnam’s seaports attract mother ships to do cargo, but also contributes to stabilizing market prices, limiting unfair competition between businesses, supporting port enterprises to increase investment capital to upgrade the seaport system and improve service quality. At the same time, stabilizing prices for exclusive services such as pilot and towing prices. However, the prices of services at seaports still exist and are limited.

According to analysts, unfair competition among service providers at seaports still occurs frequently. Worth mentioning, businesses are still competing to reduce prices to attract customers or raise prices very high in some services that are still exclusive.

Along with that, some types of price brackets changed from a fee mechanism to a price mechanism, the price level was not based on the cost of the product’s cost, so costs and revenue were inadequate, creating a price difference. There is a large difference between units providing the same type of service.

Regarding the declaration and listing, there are also some shortcomings, because maritime activities are highly internationalized and often follow international practices. Some basic service charges at seaports such as loading and unloading, towing, wharf, etc., are made under the contract based on negotiation between port enterprises and shipping lines. However, the regulation of service prices at seaports on the list of declared goods that must be sold at the declared prices does not reflect the actual prices and is not consistent with international practices.

Facing the above limitations, the Deputy Director of the Vietnam Maritime Administration Hoang Hong Giang, and the research team reviewed and proposed solutions to manage seaport service prices according to the market mechanism in parallel with the management mechanism of the State, to maximize the development of enterprises, reduce administrative procedures, and facilitate maritime activities.

To manage prices effectively, harmonize the interests of stakeholders, and at the same time reduce administrative interference in price adjustment, the Deputy Director of the Maritime Administration said that for services, there was healthy competition, no longer harms the market, it should be considered that the regulation on price brackets should be phased out. According to the Vietnam Maritime Administration, it is possible to omit the maximum or minimum price or the whole price bracket.

FOUR TYPES OF SERVICE RATE SUGGESTIONS SMALL

Firstly, for maritime pilotage services, only the maximum price is specified, and the minimum price is removed.

According to Clause 3, Article 247 of the Vietnam Maritime Code 2015, in Vietnam’s compulsory pilotage zone, foreign seagoing ships of 100 GT or more; For Vietnamese ships carrying passengers, carrying oil, liquefied gas, chemical buckets of 1,000 GT or more and other Vietnamese ships of 2,000 GT or more, the use of pilotage services is compulsory. According to regulations, only a few cases of Vietnamese ships with captains who are Vietnamese citizens with appropriate degrees and certificates of pilot expertise are allowed to lead the ship themselves.

In addition, according to the provisions of Point c, Clause 2, Article 18 of Decree No. 70/2016/ND-CP dated July 1, 2016, on conditions for providing maritime safety services, a navigation route is only assigned to a pilot company.

Thus, “maritime pilot service is compulsory to use, has a relatively high monopoly position, therefore, it is necessary to set a maximum price to limit the monopolistic situation of price increase”, said the leader of Assessment by the Department of Maritime Affairs.

According to the current calculation formula, the pilot price ranges from 500,000 VND / turn to 290 million / time, the price difference is huge. High prices are concentrated in the seaports of Hai Phong, Ho Chi Minh City, and Vung Tau, international shipping with large tonnage, low prices focus on small seaports, domestic routes, and internal loads. 

The minimum price does not make sense in the pricing of pilots because there is no phenomenon of businesses competing to reduce service prices.

The applicable domestic transport service price is within the price bracket as prescribed in Circular No. 54/2018/TT-BGTVT. Currently, there are about 10 domestic container shipping lines. Due to the policy of protecting the domestic transportation rights of all countries in the world and Vietnam, domestic container transport services are provided by 100% of Vietnamese shipping lines, with domestic container transport volume accounting for about 30-35% of the total throughput of goods through the port.

For many years, there have been no competitive seaport enterprises to reduce the price of domestic container loading and unloading services to win customers and there have been no excessive price increases due to monopoly. However, the regulation of domestic container loading and unloading service prices is still necessary to stabilize service prices, helping Vietnamese ship owners proactively handle loading and unloading costs at ports.

Notably, the price of import and export container handling services brings the largest source of revenue to the port, directly affecting the operation of port enterprises.

Due to the characteristics of Vietnam’s maritime industry, up to 95% of import and export container goods are handled by 38 foreign container shipping lines, so the main customers of port enterprises are foreign shipping lines.

According to the Department of Maritime Affairs, Vietnam has a long seaport system, meeting 100% of the demand for goods imported and exported through seaports, the seaport system is divided into many enterprises. Some places still have excess capacity, leading to fierce price competition.

Due to the price reduction taking place in most areas, maintaining the minimum price in the price bracket has prevented competition from reducing prices, avoiding disadvantages for Vietnamese enterprises in front of foreign shipping lines…

Source: VnEconomy