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Why choose EXW as an example? Because this is the term that allows the manufacturer to see and control the most costs. Under EXW, no costs are “hidden” in the supplier’s price — from inland transportation at origin, export clearance, to ocean freight, the manufacturer must organize and negotiate everything. In return, the manufacturer must take active control of the entire chain. This is precisely the boundary between cost control and passive cost acceptance.

This article updates how to calculate landed cost (cost to warehouse) in full, according to the cost structure and tax regulations of August 2026, breaking down each cost group — origin charges, freight, insurance, import duties, customs, inland transport, and hidden costs — so manufacturers can see where money goes and where to tighten control.

1. What is landed cost — and why there are TWO figures

Landed cost is the total of all expenses to bring goods from the supplier’s origin point to the manufacturer’s warehouse, ready for production. It consists of eight cost groups:

EXW gives manufacturers maximum cost control

Incoterms (International Commercial Terms — international trade terms) determine who bears which costs:

• EXW (Ex Works — ex-factory): buyer bears costs from supplier’s warehouse door → can see and control every item, but must organize the entire chain (including export clearance in foreign country).
• FOB (Free On Board — free on board): seller handles until goods board the ship; origin fees are buried in seller’s price, hard for buyer to break down.
• CIF (Cost, Insurance, Freight — goods + insurance + freight): seller handles freight and insurance to import port → convenient but many costs bundled into price, easy to inflate hidden costs.

In other words: the closer to EXW, the more clearly the manufacturer can see and negotiate each item; the closer to CIF/DDP (Delivered Duty Paid — delivered with duties paid to warehouse), the more the manufacturer loses cost control. For high-frequency importers, EXW/FOB with a strong forwarder at origin is usually better than CIF on total cost.

Two landed cost figures — for two different purposes

Import VAT (Value Added Tax — value-added tax at import stage) is credited against the manufacturer’s output VAT — it is not a true cost of goods, just cash flow tied up for about one month. Therefore, separate:

• Landed cost COGS (Cost of Goods Sold — cost of goods sold): excluding input VAT, only keeping VAT financing cost. This is the figure for calculating product cost, comparing suppliers, and setting selling price.
• Landed cost cash-out (actual cash paid): including VAT. Used for cash flow planning, payment limits, and working capital.

Including full VAT in COGS → inflates product cost, wrong selling price. Looking only at COGS and forgetting VAT in cash flow → insufficient cash at tax payment time. Both errors are common in FDI factories.

2. Eight cost groups in landed cost — updated for August 2026

Group 1 · Invoice price

Starting point, representing 60–80% of landed cost. Under EXW, this is ex-factory price — excluding any shipping costs. Two notes: (1) standardize all quotes to the same Incoterms point before comparing; (2) inter-company transactions must follow arm’s length price (market price) to avoid transfer pricing risk in customs audits.

Group 2 · Origin charges (costs in exporting country)

This group is nearly invisible under FOB/CIF but becomes clear and is borne by the buyer under EXW — this is where cost control becomes possible:

• Inland transport at origin: from supplier warehouse to port/LCL warehouse. Under EXW this belongs to buyer and is often overlooked.
• Export clearance: customs procedure at exporting country — under EXW the buyer arranges (needs foreign forwarder).
• Origin THC (Terminal Handling Charge — port handling at origin): USD 120–250/container depending on port.
• Documentation and B/L (Bill of Lading — bill of lading) issuance fee, telex/surrender fee: charges for issuing and releasing the bill of lading.

Group 3 · International freight

• Sea freight: FCL (Full Container Load — full container) fixed by container; LCL (Less than Container Load — LCL, shared container) charged by W/M (Weight/Measurement — whichever is greater: weight in tons or volume in CBM (cubic meters)), usually with minimum charge.
• Air freight: charged by chargeable weight = Max(actual weight; volume ÷ 6,000). Bulky light cargo charged by volume.
• 2026 situation: Red Sea/Suez crisis ongoing — Red Sea surcharge/war risk on Asia-Europe and Asia-Americas routes remains USD 300–1,500/container with rapid fluctuations. Intra-Asia routes (Taiwan/China/Korea/ASEAN → Vietnam) mostly unaffected by this.
• Fuel surcharge — BAF (Bunker Adjustment Factor) / LSS (Low Sulphur Surcharge): fluctuates with oil prices — always use current rates.

Group 4 · Cargo insurance

Typically 0.1–0.5% of goods value depending on terms (A/B/C). With high-value electronics, overlooking or using old rates will distort product cost. Under EXW, the manufacturer proactively buys appropriate coverage (Clause A — comprehensive insurance) rather than relying on seller’s minimum.

Group 5 · Import local charges (destination charges at Vietnam ports)

The most surprising group on forwarder invoices — the source of complaints like “invoice was 30–60% higher than quote”. Cat Lai/Cai Mep rates for August 2026:

• Destination THC (import port handling): USD 130–240/container (20’/40′) — fixed item, forwarder can commit upfront.
• D/O Fee (Delivery Order — release order): USD 30–60/container, required before taking delivery.
• CIC (Container Imbalance Charge — imbalance surcharge): USD 50–120/container — very common for imports, often forgotten in estimates.
• CFS charge (Container Freight Station — LCL warehouse): for LCL cargo, charged per CBM/ton for deconsolidation and repackaging.
• Documentation fee + container cleaning: USD 15–35/shipment + USD 10–20/container.

Group 6 · Customs duties and charges (Vietnam)

Dutiable value = goods price + all costs to bring goods to Vietnam’s first import border, i.e., goods price + origin charges + freight + insurance. On this basis:

• Import duty = Dutiable value × duty rate. Duty rate by HS code (Harmonized System code — commodity classification code) and preferences: MFN (Most Favoured Nation — default rate) or FTA preference if valid C/O (Certificate of Origin) is presented. Taiwan has no FTA with Vietnam so typically MFN rates apply.
• Import VAT = (Dutiable value + import duty) × VAT rate. From 01/7/2025 to 31/12/2026, goods normally taxed at 10% are reduced to 8% (Decree 174/2025/ND-CP), expected to return to 10% from 01/01/2027.
• Customs declaration fee: VND 500,000–1,000,000/declaration; inspection fee VND 700,000–2,000,000/time; specialized inspection varies if required.

Group 7 · Vietnam inland transport

Most overlooked item. Cat Lai → Binh Duong/Dong Nai industrial zones currently ~USD 130–180/container depending on route, weight, and timing. Add surcharges for overweight (40HQ), toll station fees, off-route fees, and waiting fees if truck waits beyond allowed time at port/factory.

Group 8 · Hidden costs (D&D + financing)

• D&D (Detention & Demurrage — container detention outside port & demurrage at port storage): for high-frequency importers, 15–25% of shipments incur charges — normal. Incorporate into landed cost by: total D&D actual last 6 months ÷ total shipments same period = average D&D/shipment (expected cost).
• Financing cost (cost of capital): = Shipment value × cost of capital × leadtime days ÷ 365, plus VAT financing cost while waiting for credit. FDI manufacturers typically use: USD financing ~5–6%/year, VND borrowing ~7–9%/year.

3. Real example August 2026 — EXW shipment from Taiwan, broken down

4. Five actions to take now to control landed cost

Glossary — Terminology reference table

Definitions of abbreviations and English terms used in this article, for reference by purchasing, customs, and accounting departments.

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IS YOUR COMPANY ACTUALLY CONDUCTING AN ON-THE-SPOT IMPORT-EXPORT TRANSACTION?

This is no longer an issue affecting only a handful of businesses.

Through our consulting work with FDI enterprises, we have noticed a problem that is becoming increasingly common.

Many companies deliver goods within Vietnam, complete customs declarations, issue invoices applying the 0% VAT rate, and have even followed this practice for many years. However, the key question that should be asked is:

This is the issue businesses need to review carefully.

Since July 1, 2025, Law No. 90/2025/QH15 has introduced Article 47a into the Customs Law, providing a clearer legal basis for on-the-spot import and export goods. In addition, Decree No. 167/2025/ND-CP amends Article 35 of Decree No. 08/2015/ND-CP, providing more detailed regulations on the scope and procedures applicable to this customs regime.

However, the existence of legal regulations governing on-the-spot import-export transactions does not mean that every transaction involving the delivery and receipt of goods within Vietnam automatically qualifies as an on-the-spot import-export transaction.

This is precisely the point that businesses should reassess before continuing to apply the relevant tax treatment and customs procedures.

1. First of All: What Is an On-the-Spot Import-Export Transaction?

Under current regulations, on-the-spot import and export goods generally include the following cases:

The most important element of this regulation lies in the phrase:

Therefore, when determining whether a transaction qualifies as an on-the-spot import-export transaction, businesses should not simply rely on the fact that the goods are delivered within Vietnam.

More importantly, they must evaluate the entire transaction structure.

These are the factors that determine the true legal nature of the transaction—not merely the physical location where the goods are delivered.

3. Important Note: Not Every Transaction with an Export Processing Enterprise (EPE) Qualifies as On-the-Spot Import and Export

Following July 1, 2025, businesses should no longer assume that every transaction between a domestic enterprise and an Export Processing Enterprise (EPE) is excluded from on-the-spot import and export.

In Official Letter No. 16946/CHQ-GSQL dated July 30, 2025, the Customs Department clarified that transactions involving the delivery and receipt of goods between domestic enterprises and EPEs, or between EPEs, under the instruction of a foreign trader pursuant to sales, processing, leasing, or lending contracts fall within the scope of on-the-spot import and export transactions.

Conversely, where the transaction simply involves:

Therefore, the fact that the counterparty is an EPE alone is not the determining criterion for identifying an on-the-spot import and export transaction.

4. Is a Three-Party Contract Mandatory?

This is another area that frequently causes confusion for FDI enterprises. Instead of simply asking:

Businesses should instead ask:

The essence of an on-the-spot import and export transaction lies in the foreign trader’s commercial relationship with the parties and its instruction regarding the delivery and receipt of goods within Vietnam.

Accordingly, when reviewing a transaction, businesses should examine all of the following documents together:

• Sales contract;
• Contract appendices;
• Purchase Order (PO);
• Delivery instructions;
• Commercial Invoice;
• Packing List;
• Customs declaration;
• Payment documents; and
• Any supporting documents demonstrating the legal relationship between the parties.

The existence or absence of a three-party contract should not be used as the sole basis for determining whether a transaction qualifies as on-the-spot import and export.

5. The More Critical Issue: 0% VAT

This is the area that businesses should pay the closest attention to.

Simply because a company considers a transaction to be an “on-the-spot import and export transaction” does not automatically mean that it qualifies for the 0% Value-Added Tax (VAT) rate.

The 0% VAT rate is a separate tax matter, and businesses must satisfy all applicable conditions relating to eligible transactions, supporting documentation, and required evidence.

Effective July 1, 2025, the new VAT Law and its implementing regulations came into force. The Ministry of Finance also issued Circular No. 69/2025/TT-BTC providing guidance on documentation and procedures for applying the 0% VAT rate.

Accordingly, businesses issuing VAT invoices at the 0% rate for transactions involving the delivery of goods within Vietnam should ask themselves at least the following three questions:

If any part of the transaction chain is inconsistent, the resulting risk may extend beyond customs procedures to include VAT compliance, invoicing requirements, and accounting records.

6. Four Transaction Categories That FDI Enterprises Should Review Carefully

Category 1 – Selling Goods to a Vietnamese Enterprise Under the Instruction of a Foreign Company

Businesses should verify:

• Whether the overseas company is genuinely acting as the foreign trader in the transaction;
• Which parties have signed the contract;
• Whether there is a delivery instruction specifying delivery within Vietnam;
• Whether the consignee is the designated recipient; and
• Whether the payment flow matches the transaction structure.

Category 2 – Selling Goods to an Export Processing Enterprise (EPE)

Businesses should not automatically assume that this constitutes an on-the-spot import and export transaction.

Instead, determine whether:

• The transaction is a normal domestic sale between a domestic enterprise and an EPE; or
• The transaction is carried out under the instruction of a foreign trader.

Each scenario may require a different customs treatment.

Category 3 – Purchasing Goods Domestically Under the Instruction of a Parent Company or Foreign Customer

This is a common scenario for many FDI enterprises.

Businesses should clearly identify:

• Who is the buyer;
• Who is the seller;
• Whether the foreign company is a contracting party;
• Who issues the delivery instruction; and
• Whether the Vietnamese consignee is the designated recipient.

Category 4 – Transactions Currently Applying the 0% VAT Rate

This is the highest-priority category for review.

Businesses should not simply verify:

Instead, they should verify:

7. Compliance Checklist for Businesses

Step 1 – Map Out the Transaction Structure

For each transaction, draw a simple transaction flow:

Then answer the following questions:

If your business cannot clearly answer all six questions, it is too early to conclude that the transaction qualifies as an on-the-spot import-export transaction.

Step 2 – Review the Contracts

Review the following documents:

Step 3 – Cross-check Supporting Documents

Cross-check the following:

Contract PO Invoice Packing List Customs Declaration Payment

The information across all documents must be consistent and accurately reflect the true nature of the transaction.

Step 4 – Review VAT 0% Eligibility

Do not simply ask:

Instead, ask:

8. A Legal Change That Represents a Major Compliance Challenge

Law No. 90/2025/QH15 took effect on July 1, 2025, introducing Article 47a on on-the-spot import and export goods. Decree No. 167/2025/ND-CP further clarifies the procedures under Article 35 of Decree No. 08/2015/ND-CP.

However, businesses need to change more than just customs declaration codes. More importantly, they need to change the way they assess these transactions:

A transaction may be operationally correct from a logistics perspective but still fail to comply with customs and tax regulations.

THT Cargo Logistics – Recommendations for FDI Enterprises

If your company is involved in any of the following transactions:

Do not limit your review to the customs declaration alone. Review the entire transaction structure.

In particular, ensure you can answer these three questions:

This is the right time for FDI enterprises to proactively review their transaction structures before questions are raised by Customs or the Tax Authority.

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EXPORT MANUFACTURING: The Overlooked Tax Exemption Conditions — What Businesses Need to Do in 2026

The goods have all been exported. The container has arrived at the destination port. The overseas customer has completed final acceptance. The company breathes a sigh of relief.

Then, 18 months later, an official letter arrives from Customs requesting a post-clearance audit. The outcome is an import duty reassessment—plus administrative penalties and late payment interest—covering all imported raw materials over the past three years.

This is not a hypothetical scenario. It is a real situation facing many export manufacturing enterprises in Vietnam, especially small and medium-sized FDI companies that are not yet fully familiar with Vietnam’s customs regulatory framework.

The problem is not necessarily that the company made mistakes. The problem is that many businesses have not fully understood one critical point: being granted duty exemption upon importing raw materials does not mean the exemption is unconditional or permanent.

Duty exemption is not unconditional

When an export manufacturing enterprise imports raw materials under customs declaration type E31 (raw materials imported for export production), it is exempt from import duty and input VAT. This is a significant incentive that can save businesses from hundreds of millions to tens of billions of VND each year, depending on the scale of operations.

However, what many businesses overlook is that the duty exemption is only confirmed after the actual use of the imported materials—not at the time of importation. Customs authorities have the right to conduct inspections for up to five years from the declaration date. If the enterprise cannot prove that all imported materials were used for their intended purpose—manufacturing products that were subsequently exported—the portion that cannot be substantiated will become fully subject to import duty.

The current legal framework includes Circular 38/2015/TT-BTC, Circular 39/2018/TT-BTC, and Circular 121/2025/TT-BTC (effective from February 1, 2026). Circular 121 further strengthens requirements for Customs Finalization Reports and digital data synchronization, and applies directly to the 2026 finalization period.

Five commonly overlooked duty exemption requirements

1. Selecting the correct customs declaration type is only the beginning

This is one of the most common misconceptions. Many businesses believe that simply declaring imports under customs declaration type E31 is sufficient to secure the tax exemption.

In reality, the opposite is true. The E31 declaration merely establishes the company’s intention to use imported raw materials for export manufacturing. The actual tax exemption is verified throughout the entire process—from the moment the materials enter the warehouse, through production, until the finished products are exported and the Customs Finalization Report has been completed.

If the data chain is broken or inconsistent at any stage of this process, the risk of customs duty reassessment immediately arises.

2. Material consumption norms are not updated

Material consumption norms (also known as the Bill of Materials – BOM) define the quantity of raw materials required to manufacture one unit of finished product, including the allowable production loss rate.

A common mistake is that the BOM is established at the beginning of production and never updated—even after the factory changes machinery, switches raw material suppliers, or optimizes production processes. As a result, the documented consumption norms gradually diverge from actual production consumption. Over several years, even a small monthly variance can accumulate into a discrepancy significant enough to attract Customs attention.

When questioned, many businesses cannot provide documentation explaining why the BOM changed or when those changes took effect—and this is precisely when operational risk turns into actual financial exposure.

3. Preparing the Customs Finalization Report at the last minute

Many accounting and import-export teams only begin working on the Customs Finalization Report when the submission deadline is approaching—typically within 90 days after the end of the fiscal year.

This is fundamentally the wrong approach. The Customs Finalization Report is not a year-end summary exercise—it is the result of 365 days of continuous data monitoring. If data has not been consistently updated throughout the year, compiling everything at year-end will inevitably create discrepancies, and those discrepancies become compliance risks.

The Customs Finalization Report requires three sets of data to reconcile perfectly: the actual warehouse inventory, accounting records, and customs records (compiled from E31 import declarations and E62 export declarations throughout the year). If even one of these three data sources does not match, the company will be required to provide an explanation.

4. Inventory discrepancies that accumulate silently over time

This is the direct cause of import duty reassessments in the majority of real-world cases.

A shipment of raw materials is received, but the warehouse records are short by 2 kilograms. A production issue slip is recorded using the wrong material code. A pilot production batch is manufactured and discarded, but the consumed raw materials are never recorded. Scrap materials are generated but not properly accounted for.

Each of these seemingly minor incidents accumulates over months and years. During a post-clearance audit, Customs compares the records. If the inventory shown in the accounting system is higher than the actual inventory, or if the recorded material consumption exceeds the approved BOM multiplied by the exported production volume, Customs will inevitably ask one question: where did the discrepancy go?

If the company cannot provide a satisfactory explanation, the discrepancy will be presumed to represent raw materials that were not used for their tax-exempt purpose, resulting in import duty reassessment.

5. Incomplete retention of internal production records

During a post-clearance audit, Customs does not only review customs declarations and commercial invoices. Officers may also request Production Orders, raw material issue slips, finished goods receiving reports, periodic inventory count reports, quality inspection records, and documentation related to scrap and defective goods disposal.

Many companies do not have a standardized document retention system for these records. When explanations are required, it may take weeks to locate the necessary documents—or they may not be found at all. The business may be fully compliant in practice but unable to demonstrate compliance through proper documentation.

Actual Penalties in the Event of Import Duty Reassessment

Understanding the applicable penalties helps businesses accurately assess the severity of compliance risks related to export manufacturing materials.

For a manufacturer importing approximately VND 50 billion worth of raw materials annually, import duty may range from 5% to 15% depending on the product category. If Customs reassesses duties for three consecutive years, the additional import duty alone may range from VND 7 billion to VND 22 billion, excluding administrative penalties and late payment interest.

Case Study: An FDI Garment Factory in Binh Duong

A Korean-invested garment manufacturer operating in an industrial park in Binh Duong manufactures products exclusively for export. The company imports fabrics and accessories under the E31 customs declaration type and exports finished garments to the European Union and the United States. All import and export procedures were carried out under the correct customs regime.

The issue arose when the factory upgraded its production line during its second year of operation, reducing fabric consumption by approximately 8%. However, the warehouse management system continued using the old Bill of Materials (BOM). After two years, the inventory records showed approximately four tons more fabric than the actual physical inventory—a relatively small discrepancy compared to the hundreds of tons imported annually.

During a post-clearance audit, Customs determined that the four tons of fabric could not be adequately accounted for and therefore imposed full import duty reassessment together with administrative penalties. Although the additional tax amount itself was not substantial, the factory was forced to suspend operations for nearly three weeks to support the audit process, seriously affecting delivery schedules for European customers.

Immediate Action Checklist for Import-Export and Accounting Teams

The following items should be reviewed during this quarter before beginning preparations for the 2026 Customs Finalization Report.

Material Consumption Standards (BOM)

Raw Material Inventory

Production Documentation

Customs Finalization Report

2026-Specific Compliance Risks

What Businesses Should Remember

The import duty exemption available for raw materials used in export manufacturing is a valuable incentive that provides significant financial benefits to manufacturers. However, it is not an unconditional entitlement.

It can be compared to a bank account with conditions attached—you continue enjoying the full benefit as long as all eligibility requirements are maintained. If any condition is no longer satisfied, even unintentionally or due to inadequate internal controls, Customs authorities may require the company to repay the exempted import duties, together with administrative penalties and late payment interest in accordance with applicable regulations.

As Vietnam Customs continues to accelerate digital transformation, data integration, and post-clearance audits based on big-data risk analysis, discrepancies between customs declarations, accounting records, warehouse data, and actual production activities are becoming increasingly easier and faster to detect.

Companies that maintain robust internal data management systems, accurate Bills of Materials (BOMs), inventory controls, and customs finalization records will not only reduce the likelihood of post-clearance audit issues but will also be better positioned to safeguard the tax incentives to which they are legally entitled.

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Circular 86/2026 and Decree 252/2026 Effective from July 1, 2026: Five Key Changes Directly Impacting FDI Manufacturers Engaged in Import and Export – What You Need to Do Now

July 1, 2026 is not just another ordinary day in the operational calendar of FDI manufacturers. It marks the date on which more than 200 legal documents simultaneously take effect. Among them, the three regulations with the most direct impact on daily import-export operations are Circular 86/2026/TT-BTC on tax administration for imported and exported goods, Decree 252/2026/NĐ-CP on tax enforcement measures and tax debt management, and Circular 84/2026/TT-BTC on VAT refunds.

The Customs Department has confirmed that these new regulations are designed with taxpayers at the center, promoting digital transformation, strengthening data connectivity and information sharing between tax and customs authorities, while reducing documentation requirements and simplifying procedures related to tax declaration, tax payment, tax refunds, tax exemptions, and tax reductions.

From a long-term perspective, these reforms are positive—fewer administrative procedures, greater digitalization, and better data integration. However, in the short term, every regulatory change requires businesses to update their internal processes before they can benefit from these improvements. For FDI manufacturers processing dozens or even hundreds of customs declarations each month, continuing to operate under outdated procedures after the regulations have changed creates measurable risks—administrative penalties, rejected customs declarations, and extended customs clearance times.

Below is a detailed analysis of the five most significant changes and the practical actions businesses should take.

Change 1: New Customs Office Codes – Mandatory from July 1 with No Transition Period

This is a technical change but one with immediate operational impact and no exceptions. From July 1, 2026, all new customs declarations must use the new customs office codes. Previous codes will no longer be accepted. Businesses must immediately update their customs declaration software, customs branch and checkpoint codes, tax payment accounts, tax refund accounts, and guarantee information.

There is no transition period and no mechanism allowing the old and new codes to be used simultaneously. Any declaration submitted using the previous customs office codes after July 1 will be rejected by the system and must be re-submitted from the beginning.

Change 2: Transaction-Based Tax Declarations Become More Comprehensive, Covering Additional Tax Categories

Under Circular 86/2026/TT-BTC, tax declarations for imported and exported goods submitted on a transaction-by-transaction basis now include export duty, import duty, safeguard duty, anti-dumping duty, countervailing duty, special consumption tax, environmental protection tax, and value-added tax (VAT).

The key implication for FDI manufacturers is that the list of taxes required for each transaction has been expanded and more clearly regulated than before. This is particularly significant for manufacturers importing goods subject to multiple taxes simultaneously—for example, consumer electronics that are subject to both import duty and special consumption tax, or products imported from countries currently subject to anti-dumping duties in Vietnam.

Change 3: Tax Exemption, Reduction and Refund Procedures Fully Shift to Digital Processing

Under Circular 86/2026, tax dossiers are primarily processed electronically through the Customs Data Processing System. Procedures relating to tax exemption, tax reduction, tax refunds, tax payment extensions, overpaid tax settlement, post-refund inspections, and inspections on the use of duty-exempt goods have also been digitized, while many unnecessary administrative procedures have been removed.

This change brings both opportunities and challenges. On the positive side, it reduces paper-based documentation and shortens processing time. However, it also requires FDI manufacturers to establish a complete electronic document management system and be capable of submitting documents electronically through the Customs system instead of relying on hard-copy submissions.

Change 4: Decree 252/2026 – New Tax Enforcement Measures and Clearer Enforcement Thresholds

Decree 252/2026/NĐ-CP introduces several noteworthy provisions, including shorter processing times for lifting exit suspension measures for taxpayers who have fulfilled their tax obligations, as well as expanded conditions for lifting exit suspension where tax payment data has not yet been updated in the system.

One of the most significant changes for FDI manufacturers is the introduction of tax debt thresholds before enforcement measures apply. Tax authorities will not initiate enforcement procedures for organizations with tax debts below VND 3 million, or for individuals and household businesses with tax debts below VND 1 million. This helps businesses avoid enforcement actions resulting from insignificant outstanding balances caused by system errors or delayed data synchronization.

Change 5: Circular 86 Introduces Re-inspection Procedures When Signs of Violations Are Identified

Circular 86 introduces new provisions allowing Customs authorities to conduct re-inspections where indications of violations have not been fully addressed, thereby strengthening regulatory oversight and helping prevent revenue losses to the State budget.

This provision expands the legal basis for Customs authorities to conduct post-clearance audits or re-inspections of customs declarations that have already been cleared but subsequently show signs of violations that were not previously detected or fully handled.

Combined with Customs’ statutory authority to conduct post-clearance audits within a five-year period under the Customs Law, this means that customs declarations filed during the previous five years may all become subject to re-inspection whenever Customs has sufficient legal grounds.

Additional Update: From 01/09/2026 – Four Categories of Taxpayers Will Be Subject to Enhanced Monitoring

According to the latest information released on 17/07/2026, from 01/09/2026, four additional categories of taxpayers will be placed under enhanced supervision by the tax and customs authorities.

Although detailed implementation guidance is still being updated, this is an important development that FDI manufacturers should closely monitor throughout August to determine whether their business falls within any of the monitored categories and what preparations should be completed before 01/09/2026.

Customs Compliance Checklist Under the New Regulations – July 2026

Conclusion

The legal changes taking effect from 01/07/2026 represent one of the most significant regulatory updates in recent years. However, the overall direction is clear: greater digitalization, stronger data integration between government agencies, and enhanced compliance supervision.

FDI manufacturers that update their internal processes promptly and correctly will benefit from faster customs clearance procedures and fewer paper-based administrative requirements. Companies that continue operating under outdated procedures may face rejected customs declarations, declaration penalties, and customs clearance delays—precisely when they are preparing for the year-end export peak season.

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In most cases, the answer is not about how fast each shipment is processed. The real issue is that the company’s internal process has not been designed to prevent D&D from occurring in the first place. This article takes a closer look at how D&D charges are calculated, practical negotiation points with shipping lines, and how companies can establish an effective D&D control system as a genuine operational KPI.

Within the logistics cost structure of many FDI manufacturers, detention and demurrage (D&D) are among the most frequently recorded “unplanned logistics expenses”—yet they are also among the least analyzed in terms of root causes.

Many companies simply pay the shipping line’s invoice and move on to the next shipment without establishing any monitoring or prevention mechanism. As a result, the same mistakes occur repeatedly, and accumulated D&D expenses can easily reach tens of thousands of US dollars each year without anyone taking ownership of the problem.

1. Understanding the Difference Between Detention and Demurrage

Before analyzing the risks, it is important to distinguish these two concepts, as many companies use them interchangeably, resulting in disputes with shipping lines that target the wrong issue.

These two charges are completely independent. They may occur separately or simultaneously, and both are calculated on a daily basis using escalating tariffs—the longer the delay, the higher the daily charge.

For a standard 40HC container, demurrage or detention commonly ranges from USD 30–80 per day during the first week, increasing to approximately USD 150–300 per day by the third week, depending on the shipping line.

2. Four Most Common Root Causes at FDI Manufacturing Plants

Delayed or Incorrect Customs Documentation

This is the number one cause of D&D.

When discrepancies exist in the invoice, packing list or bill of lading—such as incorrect product descriptions, quantities, weights or HS codes—the import-export team must contact the supplier to obtain corrected documents or request a Letter of Correction.

Meanwhile, the container remains at the port, and the free time countdown has already started from the vessel’s arrival.

For suppliers located in different time zones (Japan, Korea or Taiwan), waiting for email responses and internal approvals can easily consume two or three days.

Warehouse Not Ready to Receive Cargo

This situation is common among rapidly expanding FDI factories.

Although cargo arrives on schedule, warehouse space may still be occupied by previous shipments, while forklifts and manpower are insufficient for immediate unloading.

As a result, containers remain parked at the factory yard for two to four additional days before unloading, with the entire period counted as detention.

Lengthy Internal Approval Process

Some multinational corporations require multiple approval levels before cargo release is authorized, or they require confirmation from the Quality Department that inspection documents are complete before goods may enter the warehouse.

Although these controls are reasonable from a governance perspective, the absence of clearly defined internal SLAs often results in containers remaining idle over weekends or public holidays.

Unexpected Specialized Inspection

As discussed in previous articles, when a shipment is selected for specialized inspection, processing time may extend to 7–15 working days, whereas demurrage free time is typically only 3–5 days.

Consequently, the entire inspection period generates demurrage charges, and companies generally have limited grounds to request waivers because specialized inspection is a mandatory government requirement rather than a shipping line error.

3. Why D&D Is More Difficult to Control Than Other Logistics Costs

One unique characteristic of D&D is that the cost is incurred long before the company actually becomes aware of it.

Businesses often receive D&D invoices two to four weeks after returning the container, by which time the incident has already passed and there is no opportunity to intervene.

If companies have a real-time free time monitoring system, however, they can take corrective action while the shipment is still within the free period and avoid unnecessary costs.

Another common challenge is that responsibility for D&D often falls into a grey area shared by the import-export team, warehouse operations and the freight forwarder.

The import-export team believes its responsibility ends after customs clearance, while the warehouse claims it cannot receive the cargo due to incomplete documentation. Meanwhile, the forwarder simply follows customer instructions.

As a result, no one actively monitors the free time countdown, and everyone is surprised when the D&D invoice eventually arrives.

4. A Systematic Approach to Controlling D&D

Companies that successfully control D&D are not necessarily luckier—they simply manage free time as a genuine logistics KPI rather than reacting to individual incidents.

Achieving this requires three essential elements:

Regarding visibility, a capable freight forwarder should automatically notify customers before free time expires instead of waiting for inquiries.

If the current forwarder does not provide such a system, companies should establish a simple tracking file containing:

Updating this file daily is usually sufficient to identify potential D&D risks before charges occur.

Regarding negotiations with shipping lines, companies may request D&D waivers or reductions when charges result from force majeure events, mandatory specialized inspections, natural disasters, or shipping line errors such as rollovers or misrouting.

The likelihood of success depends largely on whether the company can provide sufficient supporting documentation and whether it has experience negotiating with the respective shipping line.

Detention & Demurrage Control Checklist for FDI Manufacturing Logistics Teams

Building a Long-Term D&D Control System

Managing Detention & Demurrage should go beyond handling individual invoices. Companies should establish a long-term management system to continuously reduce D&D occurrences and improve overall supply chain performance.

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PEAK SEASON IN OCEAN FREIGHT: HOW FDI MANUFACTURERS CAN PREPARE TO AVOID SUPPLY CHAIN DISRUPTIONS

Peak season in ocean freight is more than just a period of rising freight rates. For FDI manufacturers operating with fixed production, shipping, and delivery schedules, it is also a time when supply chain risks increase significantly, including limited vessel capacity, shortages of empty containers, schedule changes, shipment rollovers, and unexpected logistics costs.

In industrial manufacturing, a delayed export shipment is far more than simply missing one vessel. It can impact delivery commitments to overseas buyers, sales plans, distribution schedules, factory credibility, and even disrupt production lines at the destination.

For this reason, preparing a logistics plan before the peak shipping season is essential for FDI enterprises to control costs, minimize risks, and maintain supply chain stability.

1. When Does Ocean Freight Peak Season Usually Occur?

Ocean freight peak season generally takes place between July and October each year, when cargo demand from Asia to the United States, Europe, and other major consumer markets rises sharply in preparation for year-end shopping events such as Black Friday, Cyber Monday, Christmas, and other holiday seasons.

For Vietnam, this is also the period when export volumes increase across many industries, particularly electronics, industrial components, machinery, textiles, footwear, furniture, consumer goods, and other manufacturing products.

As many exporters ship within a relatively short period, pressure on shipping lines, empty container availability, ports, and inland transportation networks increases substantially. Consequently, shipping schedules become much more volatile compared to off-peak periods.

2. Why Do Freight Rates and Sailing Schedules Fluctuate During Peak Season?

During peak season, booking demand often grows faster than the market’s actual transportation capacity. Additional vessels, empty containers, and shipping slots cannot be deployed immediately to meet the surge in demand.

As vessel space fills quickly, carriers may adjust freight rates according to market supply and demand. Besides the base ocean freight, exporters may also face Peak Season Surcharges (PSS), Container Imbalance Charges (CIC), port-related surcharges, and additional costs caused by schedule changes.

Companies that make last-minute bookings, lack stable shipping forecasts, or rely entirely on spot freight rates generally face higher cost volatility. In some cases, even accepting higher freight rates does not guarantee space on the desired vessel.

3. What Is a Rollover and Why Should FDI Manufacturers Pay Special Attention?

A rollover occurs when a container has already been booked but cannot be loaded onto the originally scheduled vessel and is postponed to a later sailing.

This is one of the most common risks during peak season and can significantly affect delivery schedules. Rollovers may result from several factors, including:

• Vessels reaching full capacity because of increased booking demand.
• Shipping lines prioritizing customers with long-term contracts or stable cargo volumes.
• Congestion at origin ports, destination ports, or transshipment hubs.
• Schedule adjustments, blank sailings, or service route changes.
• Late cargo delivery to the terminal, missed cut-off times, or incomplete documentation.
• Limited availability of empty containers at certain depots or locations.

For FDI manufacturers, rollover should be considered a supply chain management risk rather than merely a logistics issue. A delayed container may lead to postponed deliveries, production delays, assembly disruptions, distribution schedule changes, and lower supplier performance evaluations.

4. Shipping Routes Most Affected During Peak Season

Not all trade lanes experience the same level of pressure. However, during peak season, several major export routes usually face greater operational challenges due to increased cargo demand and limited transportation capacity.

Vietnam – U.S. West Coast

This is one of the busiest shipping routes connecting Asia with the United States. Ports such as Los Angeles and Long Beach typically handle extremely high container volumes during the peak shipping season.

Electronics, furniture, consumer goods, garments, footwear, and industrial components are among the commodities most affected by vessel capacity limitations. Late bookings or shipments without long-term planning are generally more vulnerable to rollovers.

Vietnam – U.S. East Coast

Shipments to the U.S. East Coast usually involve longer transit times and may depend on canal crossings or transshipment ports. Therefore, delays at any stage of the route can impact the entire delivery schedule.

For time-sensitive shipments, manufacturers should always include sufficient buffer time rather than relying solely on the published transit time.

Vietnam – Europe

Major European ports such as Rotterdam, Hamburg, Antwerp, and their associated transshipment hubs typically experience heavy container volumes before the year-end retail season.

As shipping demand increases, exporters may encounter schedule changes, longer transshipment times, cargo release delays, and higher transportation costs.

Middle East, India, and Other Markets

Although these routes may not experience the same level of congestion as the U.S. or Europe, they can still face capacity constraints during periods of concentrated cargo demand. Shipping lines may reduce available slots, adjust sailing schedules, or prioritize customers with stable shipping volumes.

Therefore, manufacturers should evaluate risks based on their own export markets rather than focusing only on the largest global trade lanes.

4. Sea Freight Routes Under the Greatest Pressure During Peak Season

Not all shipping routes face the same level of risk. However, during peak season, certain trade lanes experience significantly higher pressure due to increased cargo demand and limited carrier capacity.

Vietnam – U.S. West Coast

This is one of the busiest trade lanes connecting Asia with the United States. Ports such as Los Angeles and Long Beach typically handle extremely high container volumes during the peak shipping season.

Export shipments including electronics, furniture, consumer goods, garments, footwear, and industrial components often face intense competition for vessel space. Bookings made at the last minute or without stable shipping plans are more likely to experience rollover.

Vietnam – U.S. East Coast

Shipments to the U.S. East Coast generally have longer transit times and may rely on canal crossings or transshipment ports. As a result, delays at any point along the route can impact the entire delivery schedule.

For time-sensitive cargo, manufacturers should include sufficient buffer time instead of relying solely on standard transit schedules.

Vietnam – Europe

Major European ports such as Rotterdam, Hamburg, Antwerp, and their associated transshipment hubs usually experience significant congestion during the preparation period for year-end retail demand.

As shipping volumes increase, exporters to Europe may encounter schedule changes, longer transshipment times, slower cargo release, and higher freight costs.

Middle East, India, and Other Markets

Compared with U.S. and European routes, market conditions may vary depending on the destination and timing. Nevertheless, during peak season, carriers may still limit available slots, adjust sailing schedules, or prioritize customers with stable shipment volumes.

Therefore, manufacturers should assess logistics risks based on their specific export markets rather than focusing only on major trade lanes.

5. What Risks Can Rollover and Vessel Schedule Delays Cause?

When containers are rolled over or vessel schedules change, manufacturers may face a range of unexpected consequences throughout their supply chains.

The most immediate impact is delayed delivery to overseas customers. For manufacturers operating under fixed production schedules, shipment delays can affect contractual commitments, supplier performance ratings, and customer satisfaction.

Additional logistics costs may also arise, including warehouse storage, container detention, demurrage, inland transportation adjustments, rescheduling fees, or the need to switch to more expensive transportation alternatives.

More critically, if delayed shipments contain raw materials, production components, or manufacturing equipment, import delays may directly interrupt production lines. In many cases, the financial impact of production downtime can far exceed the increase in freight costs.

For this reason, FDI manufacturers should treat peak shipping season as a supply chain risk management issue rather than simply a booking challenge.

6. How Should FDI Manufacturers Prepare Before Peak Season?

To minimize risks during the peak shipping season, manufacturers should take proactive measures well in advance instead of waiting until new orders arrive before arranging shipments.

Plan Import and Export Activities Early

Manufacturers should review production schedules, delivery commitments, and shipment forecasts before peak season begins. For cargo bound for the U.S., Europe, or other time-sensitive destinations, early booking significantly increases the chance of securing vessel space.

Work Closely with Logistics Partners

Sharing shipment forecasts, destinations, delivery schedules, and cargo priorities with logistics providers allows them to coordinate with shipping lines in advance, identify suitable sailings, and prepare contingency plans when necessary.

Strictly Control Cut-Off Times and Documentation

During peak season, even minor documentation errors, late container gate-in, incorrect loading schedules, or missing cut-off deadlines can cause shipments to miss their intended vessel.

Manufacturers should carefully verify commercial invoices, packing lists, shipping instructions, VGM declarations, booking confirmations, stuffing schedules, and container gate-in deadlines before shipment.

Prepare Backup Plans for Critical Shipments

For urgent cargo, contract-critical shipments, or materials supporting production lines, manufacturers should prepare alternative shipping options in advance, including different carriers, ports, sailing schedules, or even partial air freight solutions for highly urgent cargo.

Do Not Base Decisions Solely on the Lowest Freight Rate

During peak season, the lowest freight rate is not always the safest option. Manufacturers should evaluate freight costs together with schedule reliability, vessel space availability, transit time, transshipment risks, and the logistics provider’s ability to handle unexpected situations.

A lower-cost solution with a high rollover risk may ultimately result in significantly higher total logistics costs.

7. THT Cargo Logistics Supports Manufacturers Throughout Peak Season

Peak season requires manufacturers to manage logistics more proactively than usual. Early planning, selecting appropriate shipping routes, maintaining documentation accuracy, and preparing backup solutions help reduce rollover risks, minimize unexpected costs, and maintain delivery performance.

With extensive experience supporting FDI manufacturers in industries including electronics, machinery, chemicals, furniture, industrial components, and manufacturing, THT Cargo Logistics provides comprehensive assistance in:

In today’s constantly changing ocean freight market, proactive logistics planning is one of the most effective ways for FDI manufacturers to protect production schedules, maintain delivery performance, and build a more resilient supply chain.

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