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Red Sea tension likely to affect garment and footwear exporters from Q2: Insiders

The tension in the Red Sea, which has led to increases in logistic costs and shipping time, is forecast to affect Vietnamese exporters of garment, textile, footwear and leather products from the second quarter of 2024 if it persists.
Red Sea tension likely to affect garment and footwear exporters from Q2: Insiders ảnh 1Red Sea tension likely to affect garment and footwear exporters from Q2 (Photo: Reuters)
Hanoi (VNA) – The tension in the Red Sea, which has ledto increases in logistic costs and shipping time, is forecast to affect Vietnamese exporters ofgarment, textile, footwear and leather products from the second quarter of 2024 if it persists.

According to the Vietnam Leather, Footwear and HandbagAssociation (Lefaso) and the Vietnam Textile and Apparel Association (VITAS),the tension in the Red Sea has yet to affect Vietnamese firms, as a majorityof them have received orders in the Free on Board (FOB) form, which means they do not have to pay for shipping costs.

Currently, domestic exporters have received orders until theend of the first quarter of this year, and are hardly impacted by changesin Red Sea shipping routes.

However, if the tension lingers, Vietnamese businesses are likelyto face difficulties in receiving new orders from the second quarter.

VITAS Vice President and General Secretary Truong Van Cam said that domestic enterprises are keeping a close eye on the situation to negotiate new export deals.

Tran Thanh Hai, Deputy Director of the Agency of Foreign Trade under the Ministry of Industry and Trade, said that due to the Red Seatension, the logistics costs for each container passing through the European regioncan increase by between 1,000 - 2,000 USD.

Hai advised domestic businesses to keep a close watch on the situation to take timely response measures./.
VNA
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