High costs because of too much consideration


high costs because of too much consideration
Loading and unloading service is often applied to grocery and household shipments. Photo: H.Nu

Too many types of service charges

According to a representative of an enterprise transporting goods through Huu Nghi (Lang Son) international border gate, the cost of loading and unloading goods in the logistics service chain is high, with many types of fees, and businesses are forced to use them without any other choice.

At the Huu Nghi international border gate, Xuan Cuong Huu Nghi Joint Stock Company (Xuan Cuong Company) is the only enterprise that invests and exploits logistics services in goods clearance. When goods arrive at the border gate, they must use the services of yards, loading, unloading, transshipment, after they can be transported to the warehouse for production and business.

Quotation of service costs of Xuan Cuong Company shows that the price of a series of parking services, loading and unloading (to car, downgrade, loading, crane, transport) for a shipment is quite high. For example, to spend on a grocery shipment using manual loading and unloading services, businesses have to spend VND3-4 million; if it is a shipment of machinery and equipment (heavy, bulky goods), they must use a crane to load or unload, it costs about VND6-8 million for a shipment.

In the context of the Covid-19 outbreak, the change of drivers (between the driver transporting goods and the private driver at the border area) continues to increase costs for imported and exported goods. Calculating the cost of hiring a specialized driver to control the car, the company has to pay VND1.5 million per car.

A shipper said that in addition to using services that have to pay fees according to the regulations of Xuan Cuong Company, when the truck enters the gate of the loading yard, the enterprise has to pay an additional VND800,000 and the parking fee is VND400,000 for tractors of over 18 tons.

Sometimes trucks carry a box of about 40-50 kg, because fewer goods do not hire loading and unloading services. If the truck is loaded to the household, it only costs about VND220,000 (including entrance fee, parking and training for the driver), but if you hire workers from Xuan Cuong Company to load and unload, the listed price is VND330,000.

“All services are cashed out and the cost is calculated for the price of the goods. Even if the shipment arrived at the border gate late (in the evening, the shipment had to stay in the yard for the next day to load and unload), the company also spent VND35,000 or 10 yuan for a turn to send the car keys to the parking station,” the shipper said.

Overloaded infrastructure, yards

Talking about the importance of Huu Nghi CK, Mr. Nguyen Trong Nghia, Head of Dong Dang-Lang Son Border Economic Zone Management Board, said that in trade between Vietnam and China, goods mainly pass through Huu CK. Nghi, this is considered the lifeline of goods to China and third countries.

Statistics from Huu Nghi Customs Branch (Lang Son Customs Department) showed that by 2020, the import-export turnover here reached nearly US$1.3 billion with the number of 31,647 declarations of 769 enterprises participating in operations. Import and export through the area.

Forecasts by the Department of Industry and Trade of Lang Son province, the demand for import and export through Huu Nghi international border gate will increase by about 15-20% per year. The quantity of these goods is not high compared to the capacity of an international border gate, but for many years, goods congestion at Huu Nghi border gate often occurs, making customs clearance time long and pushes up costs.

Lang Son Provincial People’s Committee has devoted many resources, mechanisms and policies to investment in transport infrastructure, yards, functional areas, logistics services to serve goods import and export activities, immigration of people and vehicles through Huu Nghi international border gate.

However, up to now, Xuan Cuong Company has invested in construction and operation of about 10,000 m2 of yards and service items for import and export activities with a capacity of 2,000 vehicles to load about 15,000-20,000 tons of goods.

According to Mr. Nguyen Trong Nghia, as the exported goods here are mainly agricultural, aquatic products, seasonal harvest, and small-scale trade; although the enterprise has not signed with a partner, they still bring goods in bulk to the border gate. This leads to frequent congestion of goods and vehicles. Demand increased dramatically while transporting vehicles could not be arranged, infrastructure capacity and berths could not be met, goods were congested at border gates, so rising costs were inevitable.

Rail is not convenient

Road and border gate come with high costs and are congested, but businesses are not interested in the mode of rail transport although only less than 10km from Huu Nghi border gate is Dong Dang international railway.

In February 2020, when the Covid-19 pandemic started, the road border gates were restricted for export. The People’s Committee of Lang Son province discussed with the Chinese to pilot the export of fresh fruit products through Dong Dang station. There were 460 tons of dragon fruit and 1,500 tons of iron ore exported to China by international rail.

According to Ms. Cao Hoai Phuong, Director of the Customs Branch of Dong Dang International Railway Station, the export of goods at Dong Dang station still has some shortcomings. There is no specialized locomotive here, so the goods must be stored and wait for locomotives to arrive from another station. This leads to companies being unable to take the initiative in time to export goods.

Not to mention that due to limited capacity of berths and yards and there are no loading and unloading services; when needed, businesses have to hire a vehicle from Xuan Cuong to move from Huu Nghi stock. On the other hand, Xuan Cuong company does not have a specialized crane and has to use two cranes to move a container.

According to regulations, the maximum fee for a container crane on board is VND1.8 million, but due to using two cranes, the fee is up to VND2.4 million per container.

According to the leaders of the Customs Department of Dong Dang Station, there is no warehouse, storage yard and detained goods here, so the company must store the goods on the carriage, incurring an additional cost.

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