THC Negotiations Coming to an End

 

According to IADA, THC is an integral part of shipping freight, including fees for carrying containers from yards to ships and from ships to yards, and the separation of the THC aims to provide transparency in international container shipping and has no adverse impact on Vietnamese exports. Until now, Vietnam has not separated THC, but aggregated them into one. Since 2000, IADA has repeatedly told Vietnamese shipping firms to change THC collection in Vietnam.

 

At a May 21 press conference in Hanoi, Mr Hoang Van Dung, Vice Chairman of Vietnam Chamber of Commerce and Industry (VCCI), said the two sides had agreed to separate THC from shipping fees as proposed by IADA. Shipping fees are always calculated in US dollars, and fluctuate depending on the number of ships and volume of goods on ships. Meanwhile, THC is calculated in local currency (VND) and fixed for a certain time. Mr Dung said this would help make the THC payment more transparent, allowing exporters and importers more effectively set selling and purchasing prices.

 

According to the example given by IADA, the shipping fee for a 20-foot container is US$150 from Hai Phong port to Hong Kong, which includes US$90 in shipping fees and US$60 in THC. The total sum is unchanged. The THC is paid at the time of finishing loading full containers at port, or finishing unloading full containers at port. IADA’s shipping firm members will negotiate directly with goods owners about the concrete THC levels.

 

According to Lawyer Vo Nhat Thang, from now on, Vietnamese enterprises must follow international practice in paying shipping fees and THC. At present, 90 per cent of Vietnamese export goods are delivered at Hai Phong, Saigon or Da Nang ports. Mr Thang warned that when signing contracts with foreign partners, the two sides should reach agreement on who will pay THC. There will be three scenarios: First, foreign businessmen will pay all. Second, foreign and Vietnamese sides equally split the fee. Third, according to international practice, THC will be payable by the recipients of the merchandise.

 

 

According to economic experts, implementing THC collection is simply a matter of time, because only Vietnam, Laos and Myanmar now do not separate THC from shipping fees. However, Vietnamese negotiators as well as Vietnamese shipping firms want more time to clarify implementation procedures.

 

According to the IADA calculation, THC in Vietnam is US$80 a 20-foot container and US$121 a 40-foot container. IADA proposed the THC in Vietnam to start at US$60 a 20-foot container and US$90 a 40-foot container, effective from June 1, 2007.

 

After elaborating on the Vietnamese situation, the Vietnamese negotiation council proposed initial THC at US$20 for a 20-foot container and US$30 for a 40-foot container from January 01, 2008, citing that Vietnamese shippers have signed commercial contracts through 2007 already. In addition, Vietnamese firms need time to get acquainted to the new THC payment.

 

However, IADA did not accept the delay, insisting on THC collection as of June 1, 2007 as previously announced. The THC to be applied in the first period would be US$50 for a 20-foot container and US$$75 for a 40-foot container. As of January 1, 2008, fee levels will be raised to US$60 and US$90, respectively.

 

If the new THC is implemented as scheduled, Vietnamese firms will have less than 10 days to make the change. Mr Dung said it would be better if the new THC would take effect from January 1, 2008, but he also warned locals of the possibility of the new mechanism being in place from June 1, 2007.

 

IADA, which consists of 33 members, serves 90 per cent of Vietnam’s total container exports.