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.

The Vietnam Leather, Footwear and Handbag Association (Lefaso) and the Vietnam Textile and Apparel Association (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 Sea tension, the logistics costs for each container passing through the European region can increase by between US$1,000 - 2,000.

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

In 2020 and 2021, Vietnam’s garment sector managed to survive through the pandemic with the manufacturing of masks and quarantine clothes.

But last year, rising inflation had cut spending in many countries, including in key markets such as the U.S. and Europe. Vietnam’s exports therefore plunged nearly 10% to US$40.3 billion.

The country’s footwear export turnover stayed at US$20.37 billion last year, a decrease of 14.7% compared to 2022, according to the General Statistics Office.

VNA