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  Traffic congestion sends commodity prices up

Prolonged congestion on the road leading to Phu My Bridge in HCMC's District 7 and mounting backlogs at Cat Lai Port in District 2 in the past two weeks have affected the circulation of goods and resulted in unexpected costs which are then factored into goods prices.

Trinh Chau Khanh, director of Kim Loi Minh Transport Company, told the Daily that he has received a lot of complaints about late deliveries from export and import firms.

According to Khanh, his company’s goods delivery is now one hour later than usual due to traffic congestion on Phu My Bridge. With each hour of congestion, a truck with two containers consumes an additional 20 liters of oil, let alone other costs.

Do Xuan Phu, director of Minh Lien Transport Company, shared this point, saying many of his clients have complained about late deliveries. "Export and import firms do not need to know about transport infrastructure but only care about delivery schedules."

Phu added his company could deliver two containers of goods in one day in the past but the volume is halved now due to congested roads. Congestion not only pushes up costs but also pushes down revenues by 30% as the company has to cover fuel costs.

He also expressed concerns that the deteriorating quality of Mai Chi Tho Street and the eastern ring road could further aggravate congestion.

Regarding the rising backlogs at Cat Lai Port, Gia Long Company director Tran Viet Tien said his company had to bear many additional costs arising from materials to storage. As a result, business associations in HCMC and neighboring areas should raise their voice about the increasing fees of container storage at the port to cope with the difficulties firms are facing, and policies should be revised consistently, he said.

As costs keep rising, enterprises and consumers are the ones who suffer, said Nguyen Lam Vien, general director of Vinamit Company.

Ho Hoang Bao Vinh, director of A Dong Transport Trading Company, said that when the storage fee at the port goes up, the company has no choice but to increase commodity prices correspondingly to ensure their profit margins.

Source
: The Saigon Times
Date: 08/05/2014
 
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