Businesses in need of risk response strategies

Statistics from the Ministry of Industry and Trade shows Vietnam’s export turnover in the first six months of the year is estimated at approximately US$217 billion, an increase of about 14% compared to the same period last year. However, policy changes in key export markets and risks stemming from transport and geopolitical tensions are forcing businesses to be more cautious.

In just two weeks’ time, the US suspension of retaliatory tariffs is set to expire. Meanwhile, ongoing geopolitical tensions in the Middle East are raising concerns about further risks to global shipping routes. In this complex risk environment, export planning is no longer just about individual orders, and businesses are required to prepare comprehensive risk scenarios to sustain export activities.

Despite achieving double-digit growth in the first half of 2025, many textile and garment enterprises anticipate a slowdown in the coming quarters. The main reason is the potential reinstatement of US retaliatory tariffs, prompting businesses to accelerate market diversification strategies.

Another growing challenge is rising logistics costs, especially maritime transport. The Middle East conflict has pushed container freight rates from Asia to the US West Coast up by more than 9%, reaching around US$5,900 per 40-foot container. At the same time, container supply is tightening across several Southeast Asian countries.

Although Iran and Israel have just agreed on a ceasefire, it appears to be fragile, and conflict could erupt at any time. If the Israel - Iran conflict escalates, critical shipping lanes such as the Suez Canal or Strait of Hormuz could face disruptions. This would force cargo ships to reroute via the Cape of Good Hope, drastically increasing shipping costs and delivery times.

“Market fluctuations are occurring rapidly. Businesses need to enhance forecasting capabilities and have contingency plans ready. Negotiating long-term transport contracts can help stabilise shipping costs and reduce risks during sensitive periods,” analysed Nguyen Hoai Chung, representative of the Vietnam Logistics Business Association.

New opportunities on the horizon

Despite ongoing global supply chain disruptions, many Vietnamese export businesses are actively seeking new opportunities.

Nguyen Dinh Tung, CEO of Vina T&T Group specialising in fruit exports, told tuoitre newswire that his company currently exports only a small volume to the Middle East, mainly to the United Arab Emirates, Oman, and Saudi Arabia, which are not in conflict zones, so export operations remain stable. Fruit shipments to the United States and the European Union have also not been affected.

Meanwhile, Nguyen Tuan Viet, director of VIETGO that provides export consultations, noted that the most significant current impact is the rising transportation costs, driven by instability in critical shipping lanes such as the Suez Canal and the Strait of Hormuz. Instead of the usual end-of-year peak season rate hikes, freight costs are increasing earlier this year.

However, Viet also saw new opportunities emerging from supply chain disruptions. The demand for stockpiling essential goods is rising sharply, especially from major importers like India, which holds a large share of trade in the Middle East. As soon as the conflict erupted, several Indian partners reached out to seek alternative sources from Vietnam.

“Although Vietnam’s export volume to the Middle East remains modest, many Vietnamese products have strong potential, such as charcoal, cashew nuts, pepper, tea, fresh and dried fruits, seafood, and electronics,” said Viet.

Amid growing concerns, most businesses are maintaining stable trade activities, with no disruptions to their orders, according to VIETGO’s survey.

Drawing on lessons from the Russia-Ukraine conflict when surging demand for wood pellets pushed Vietnam to become the world’s second-largest supplier of the product, Viet expressed hope that Vietnamese companies would seize current opportunities to expand the export of essential goods in the post-conflict period.

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