What does the Ministry of Industry and Trade recommend to limit the impact of the situation arising in the Red Sea region?

This situation has led to a number of shipping lines announcing the suspension of cargo transportation through the Red Sea area, changing schedules, and redirecting their routes around Africa's Cape of Good Hope.

A number of major shipping lines have announced they will stop operating in the Red Sea. (Photo: Bloomberg)

This situation has a negative impact on international trade, causing longer shipping times for goods 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 local shortages of empty containers.

Therefore, the Import-Export Department recommends that industry associations and associations in the logistics sector increase monitoring and regularly update the situation to businesses in the industry to grasp information to proactively plan production and import and export of goods, avoiding congestion and other adverse impacts.

The Import-Export Department also recommends that import-export enterprises closely monitor the situation, proactively develop appropriate plans, and discuss with partners so that, if necessary, they can extend the time for packing and receiving goods.

Businesses are looking to diversify their supply sources to limit the impact on their supply chains. Learn about rail transport for different delivery options.

When signing and negotiating commercial contracts and transportation contracts, businesses should include provisions on compensation and exemption from liability in emergency situations. It is necessary to purchase adequate insurance to prevent risks and losses when goods have to extend the transportation time or encounter problems when traveling through this route.

Associations and enterprises promptly discuss and report to the Ministry of Industry and Trade and relevant ministries and branches on arising issues for joint handling.

Over the past month, Yemen’s Houthi movement has carried out more than 100 missile and drone attacks on ships in the Red Sea, a vital route for about $1 trillion worth of global trade.

The US has launched a multinational security operation to patrol the waters. Several major shipping lines have suspended their routes through the Red Sea. Oil markets are closely following the tension.

Currently, a series of major shipping lines in the world such as Hapag Lloyd, MSC and Maersk... have simultaneously suspended operations on this shipping route. The disruption is predicted to cause a sharp increase in shipping costs in the near future.

See the recommendation document of the Ministry of Industry and Trade here.

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