Red Sea tension makes Vietnamese businesses worried, what does the Ministry of Industry and Trade recommend?

On December 28, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department ( Ministry of Industry and Trade ) said: Over the past month, more than 100 missile and drone attacks have been carried out by the Houthi Movement in Yemen on ships in the Red Sea. This is a vital route for transporting about 1,000 billion USD worth of goods globally.

Vietnamese businesses worry about the risk of sharp increase in shipping rates due to tensions in the Red Sea.

This situation has led to some shipping lines announcing the suspension of cargo transportation through the Red Sea area, changing schedules, and diverting around Africa's Cape of Good Hope. This makes it take longer for goods transported by sea between Asia and Europe and the east coast of North America. Freight and insurance costs for goods traded between these regions have increased. There may be a shortage of empty containers locally.

The Import-Export Department recommends that industry associations and logistics associations strengthen monitoring and regularly update the situation to businesses in the industry to grasp information so that they can proactively plan production and import-export of goods, avoiding congestion and other adverse impacts. At the same time, proactively develop appropriate plans and discuss with partners so that, if necessary, they can extend the time for packing and receiving goods.

Representatives of some logistics companies in Ho Chi Minh City said that the freight rates on some shipping routes have increased by 20-30% compared to a month ago. Some international shipping lines have announced increases of up to 50% or even higher. Freight rates are constantly changing due to the tense situation in the Red Sea.

Wood and seafood businesses are worried that the 2023 business season has ended, with orders for the first quarter of 2024 only reaching 20-30% compared to the same period in previous years. In that context, international shipping lines have announced that freight rates may increase by 50-100% compared to the present due to route adjustments. "In addition to increasing freight rates, changing routes also makes delivery times longer than before. There is a possibility of a chain effect when the remaining routes are also adjusted to increase. If this happens, it will increase product costs once again while the economic difficulties will cause consumption to decrease further, adding to the difficulties," a representative of a wood business worriedly shared with Thanh Nien .

According to international press, many shipping lines have announced freight rate increases of more than 300%. Specifically, the newly announced sea freight rate has increased to 10,000 USD for each 40-foot container from Shanghai (China) to the UK, an increase of 317% compared to last week (2,400 USD).

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