Vietnamese companies advised to proactively respond to Suez Canal blockage

The Ministry of Industry and Trade (MoIT) has advised exporters around Vietnam to adopt necessary measures in order to minimise any economic damage posed by the stranded shipping vessel in the Suez Canal.

Vietnamese companies advised to proactively respond to Suez Canal blockage

In the two opening months of this year, Vietnam’s shipments to the EU hit 7.5 billion USD, up 18 percent year-on-year (Photo: VNA)

The stranding of the 400m-long container ship Ever Given in the Suez Canal where over 10 percent of global cargo and 7 percent of the world’s oil are transshipped is raising concerns about affecting of several Vietnamese enterprises, despite initial successes in the attempt to rescue this megaship.

First Secretary of the Vietnamese Embassy in Egypt and head of the embassy’s Trade Office Nguyen Duy Hung said that there is currently no official statistics on the number of Vietnamese commodities exported to other countries on ships waiting off the Suez Canal, as a number of shipping companies such as Maersk and CMS CGM decided to divert ships round Cape of Good Hope (South Africa) to Europe with the calculation of faster time.

The Vietnam Trade Office in Egypt recommended Vietnamese companies coordinate closely with shipping companies to get updated on the transport capacity, the time of docking and goods loading as well as their insurance against delays or possible damage of goods, especially aquatic products.

Businesses also need to work with importers to address possible problems related to slow delivery to avoid any trade disputes. For support, affected businesses should soon contact with the Vietnam Trade Office.

The 200,000-tonne MV Ever Given veered off course in the Suez Canal on March 23. The incident causes global economic losses of up to 9 billion USD each day, worsening the supply chain which is seriously affected by the COVID-19 pandemic.

The course of the ship has been corrected by 80 percent with the stern of the ship currently 102m from the shore, instead of 4m.

According to the Suez Canal Authority, the number of ships jammed is over 350 and it takes at least 3-6 days to circulate all of the above.

The stranding of the Ever Given in one of the most important global trade routes is affecting Vietnam’s exports to Europe.

Apart from a small volume of goods transported by air and rail, nearly all trade between Vietnam and Europe is conducted by sea and passes through the Suez Canal.

 

The MoIT has directed the Vietnam Trade Office in Egypt to keep a close watch on the incident and keep export-import enterprises updated on the situation.

The ministry has also coordinated with the Ministry of Transport to take necessary measures if the blockage continues.

According to the ministry’s Import and Export Department, along with the scarcity of containers and the rising cost of shipping due to COVID-19, the stranding of the Ever Given has seen Vietnamese import-export enterprises face yet more difficulties.

MoIT and Vietnamese enterprises need to actively adapt to market fluctuations or cases of “force majeure” such as this, the department said.

The Ever Given, one of the world’s largest container vessels, is still wedged in the Suez Canal, blocking the movement of all other ships in both directions. The economic effects of the incident are beginning to be felt.

Figures from MoIT show that Vietnam’s export turnover to Europe hit 43.7 billion USD in 2020, while 18.5 billion USD was outlaid on imports from the market.

In the two opening months of this year, Vietnam’s shipments to the bloc hit 7.5 billion USD, up 18 percent year-on-year.

Europe remains Vietnam’s fourth-largest trade partner, after China, the US, and the Republic of Korea./.

VNA

Seaways, railways have been forgotten: logistic firms

Seaways, railways have been forgotten: logistic firms

Vietnam has a long coastline but its maritime transport has not developed well. Railway transport has also been ‘forgotten’.

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