What recommendations has the Ministry of Industry and Trade made to businesses in response to the surge in freight costs?
Ministry of Industry and Trade Recommends Diversification of Cargo Routes Amid Soaring Freight Costs
In response to the escalating ocean freight rates, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan has issued a directive (No. 5178/BCT-XNK) to associations of import-export industries, logistics, shipping owners, agents, brokers, and maritime services, recommending six solutions to boost exports amid rising freight costs.
The Ministry noted that recent increases in ocean freight rates, localized congestion at some Asian ports, and a shortage of empty containers have significantly impacted export and import activities. To mitigate these challenges, the Ministry urged associations and enterprises to enhance cooperation, develop comprehensive plans for production, transportation, and import-export activities, and enter into long-term contracts with shipping lines.
Furthermore, the Ministry suggested that, in addition to current sea routes, exporters to Europe could consider alternative routes, such as combined multimodal transport, utilizing sea transportation to Middle Eastern ports followed by air, rail, or road to Europe. Additionally, businesses are encouraged to take full advantage of the benefits offered by new-generation Free Trade Agreements (FTAs) to facilitate trade and maximize the utilization of these agreements.
Regarding the clearance of detained goods, the Ministry advised exporters to collaborate with customs authorities and port operators to expedite the process, thereby improving the flow of goods and enhancing port handling capacity.
To support training and enhance negotiation skills for small and medium-sized enterprises, the Ministry proposed that industry associations, in collaboration with the Vietnam Chamber of Commerce and Industry (VCCI), strengthen their capacity building efforts to enable businesses to effectively negotiate and sign foreign trade contracts and insurance contracts, mitigating risks and losses in case of incidents, especially for seaborne goods passing through high-risk routes. Moreover, the Ministry urged associations and enterprises to proactively develop contingency plans to minimize risks and losses from similar complex and unpredictable incidents in the future.
Earlier, regarding the soaring ocean freight rates, Minister of Industry and Trade Nguyen Hong Dien sent a letter to Mr. Turgut Erkeskin, President of the International Federation of Freight Forwarders Associations (FIATA), proposing several relevant support measures.
In the letter, Minister Nguyen Hong Dien expressed his hope that Mr. Turgut Erkeskin and FIATA could provide practical solutions to help Vietnamese businesses overcome these difficulties. Specifically, FIATA could propose solutions to the abovementioned issues, share experiences and solutions that FIATA member countries and associations have been applying, particularly in addressing additional port charges.
Furthermore, within its influence on other international organizations in the fields of import-export, logistics, and supply chain management, Minister Nguyen Hong Dien requested FIATA to emphasize Vietnam’s position in the global value chain to prioritize the allocation of transportation means and equipment for Vietnam’s import-export goods.
Minister Nguyen Hong Dien also expressed his hope that FIATA would support the Vietnamese government in positioning Vietnam as a new manufacturing hub and international transshipment center in Asia within the global logistics business community. He authorized Vietnamese organizations to participate in FIATA training and certification programs to contribute to the rapid training of professional human resources capable of accessing the international market.
