Denmark's maritime shipping company Maersk declares a temporary suspension of cargo transportation through key routes in the Red Sea (Photo: AFP) Tran Thanh Hai, Deputy Director of the Foreign Trade Agency at the Ministry of Industry and Trade (MoIT), said the Red Sea tension could raise the shipping cost for one cargo container destined for Europe by 1,000-2,000 USD, and the commodities hit hardest include textiles-garments, footwear, wood products, and electronic devices.
Therefore, the businesses exporting goods via long routes need to take timely response measures to avoid losses, he said.
To protect their interests, the MoIT has urged business and logistics associations to keep a closer watch on the situation so that their members stay updated with new developments to ready production, export, and import plans to avoid adverse impacts.
Exporters and importers were also recommended to discuss with partners to extend goods preparation and delivery time if necessary, diversify supply sources to minimise the impact on supply chains, and consider rail transport to have different transportation choices, Hai noted.
In particular, the MoIT advised businesses to include articles about compensation and liability exemption in emergency cases when negotiating and signing trade and transport contracts. They were also advised to buy insurance in anticipation of risks and losses during prolonged transportation or unexpected incidents, and ready different transportation plans, the official added.
Echoing the view, the Vietnam Logistics Business Association said exporters should diversify means of transport in the short term, and that it will help businesses update information and work with other parties in supply chains.
The association also recommended companies include compensation clauses in trade and transport contracts and buy insurance. In addition, they should also diversify material suppliers to avoid disruptions to production that may lead to delivery delays.
According to some exporters, a number of shipping companies have announced higher costs for goods transportation to the US, the EU, and other countries applied from January 2024, citing the reason that the Red Sea tension has affected the safety of many shipping routes and forced them to divert routes, which has subsequently led to longer delivery time and higher expenses.
Large shipping firms like Yang Ming Line, One, Evergreen Line, HMM, and Maersk have informed exporters about additional charges as they have to divert Asia-Europe routes away from the Red Sea and the Suez Canal./.
VNA
