The escalation of tensions in the Red Sea, resulting in heightened logistic costs and extended shipping times, is anticipated to impact Vietnamese exporters of garments, textiles, footwear, and leather products starting from the second quarter of 2024 if the situation persists.
Truong Van Cam, Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association (Lefaso), along with the Vice President of the Vietnam Textile and Apparel Association (VITAS), highlighted that domestic enterprises are closely monitoring the situation to navigate new export agreements.
Tran Thanh Hai, Deputy Director of the Agency of Foreign Trade under the Ministry of Industry and Trade, pointed out that due to the Red Sea tension, logistics costs for each container passing through the European region may rise by $1,000 – $2,000. Hai advised local businesses to stay vigilant and respond promptly to the evolving situation.
In 2020 and 2021, Vietnam’s garment sector resiliently weathered the pandemic by producing masks and quarantine clothing.
However, last year, escalating inflation led to reduced spending in numerous countries, including key markets like the U.S. and Europe. Consequently, Vietnam’s exports witnessed a nearly 10% decline, reaching $40.3 billion.
The country’s footwear export turnover stood at $20.37 billion last year, marking a 14.7% decrease compared to 2022, according to the General Statistics Office.