Challenge comes from logistics
According to preliminary statistics from General Department of Customs, in the first half of January 2024, Vietnam's goods exports were 15.1 billion USD, down 7.5% compared to the second half of December 2023.
In the first half of January 2024, the country's fruit and vegetable export turnover continued to maintain impressive growth with figure of 229.37 million USD, up 50% over the same period and reaching approximately figure of the whole country in January 2023 (January 2023 reached 240.47 million USD).
Regarding rice products, in the first half of January 2024, the whole country exported 194,074 tonnes of rice with a turnover of 134.57 million USD. Compared to the same period in 2023, amount of export rice decreased by nearly 32,000 tonnes, however, the turnover increased by nearly 20 million USD. Notably, in the first half of January 2024, average price post about 693 USD/tonne, while in the same period last year it was only about 507 USD/tonne. Thus, average rice export value increased by 36.68%.
International trade activities in the first days of 2024 still follow slow pace of trade in 2023, export results in the first half of January 2024 clearly reflect this reality. Notably, the "rising" Red Sea is a hot issue for businesses operating in field of import and export.
As one of major fruit exporters to EU and US markets, Mr. Nguyen Dinh Tung - General Director of Vina T&T Import-Export Company - said that along with sharp increase in freight rates, transportation will affect fruit quality. Meanwhile, with fruit and vegetables, transportation time determines freshness of products.
A representative of a pepper and coffee export enterprise in Dak Lak said that the company's ship fare to Europe has increased quite sharply. Many of the enterprise's import customers have been slow to buy, because adding price of the goods to the shipping price is beyond the importer's ability, so they choose to wait if inventory is still available. On other hand, customers are currently very hesitant to sign new contracts. Where there is a need, importers will buy it instead of buying and using it gradually like before.
The Red Sea is connected to the Mediterranean by the Suez Canal, creating the shortest shipping route between Europe and Asia. About 12% of world shipping traffic passes through this canal. Therefore, the Red Sea is an important area in circulation of goods in the world.
In context of Vietnam's exports to the EU market as well as the US East Coast and Canada passing through this area, tensions in the Red Sea will cause Vietnam's exports of goods to be significantly affected. Among them, commodity groups such as textiles, footwear, furniture, seafood, fruits, etc are greatly affected when shipping lines have to change direction and go around Africa.
According to preliminary feedback from associations and industries, sea freight rates from Vietnam to the EU market and the US East Coast have increased significantly. Previously, a container going from Vietnam to the EU cost between 1,800 - 2,200 USD and now it is over 4,000 USD, this increases cost of goods. On other hand, delivery and receipt times will be longer. For some products, such as agricultural products, quality will be affected.
“Enterprises say freight rates have doubled, even tripled compared to a few weeks ago. At the same time, shipping time is extended by 10-15 days. If this situation persists, consumption will decrease because when costs are high and prices are pushed up, consumers in other countries will switch to buy domestic products at cheaper prices", Mr. Dang Phuc Nguyen - General Secretary of Vietnam Fruit and Vegetable Association - informed.
Anticipate risks and promptly respond
Currently, Vietnam's import and export activities are closely tied to international logistics activities. Fluctuations in logistics activities during the Covid-19 period, the Suez Canal incident and now the Red Sea show that unstable factors in the world market can be hidden and occur frequently.
In addition to human-caused factors, there are other factors that can also influence supply chain disruptions. Right now at the Panama Canal, climate impacts are causing the canal to dry out and ships passing through here have to reduce their cargo load.
Export orders are gradually recovering since fourth quarter of 2023, however, factors that have an uncertain impact on export activities still exist.
With risks in logistics issues, Mr. Tran Thanh Hai - Deputy Director of Import-Export Department (Ministry of Industry and Trade) - recommended that businesses must always take into account and have appropriate backup plans. This includes a plan to proactively negotiate with partners in the region to extend delivery time.
On other hand, it is also necessary for businesses to buy insurance, including insurance for delayed deliveries.
"Currently, some enterprises still consider insurance an unnecessary expense, but in reality this is always a factor to help businesses prevent risks as well as reduce losses", Mr. Tran Thanh Hai shared.
According to experts, the world supply chain, especially after Covid - 19, has a lot of turmoil, with many influencing factors and leading to major fluctuations causing local disruptions in each region or time. This will certainly impact Vietnam as a country with total import-export turnover in the Top 20 countries in the world.
To accompany and support businesses, Mr. Tran Thanh Hai said, Ministry of Industry and Trade is also currently coordinating with Ministry of Transport and relevant ministries to closely monitor situation and then provide recommendations. Vietnamese businesses can choose alternative methods.
"With Asia-Europe transport route in the current context, enterprises should consider and take advantage of intermodal rail transport instead of sea transport or air transport can also be considered within a limited range of products that can bear the cost", Mr. Tran Thanh Hai recommended.

Source: Vitic/ congthuong.vn