Vietnam – US trade situation and fluctuation in shipping cost 2023

Vietnam – U.S. Trade Volume 2023: According to the General Statistics Office of Vietnam, the total Vietnam – U.S. trade volume reached USD 87.88 billion in the first 11 months of 2023. The U.S. remains one of Vietnam’s largest export markets. The top 5 exports to the United States. include:

The top 5 exported goods to the United States
The top 5 exported goods to the United States

– Machinery and equipment: USD 16.47 billion
– Computers and components: USD 15.20 billion
– Textiles: USD 13.17 billion
– Phones and components: USD 7.34 billion
– Wood and wood products: USD 6.56 billion

The year 2023 marks an important milestone in the long-term cooperation between the two countries. In 2024, Vietnam is expected to be a potential market for U.S. businesses to invest in various sectors. However, given the current global economic challenges and uncertainties, businesses need adaptive plans.

Shipping Cost Fluctuations on U.S. Routes:

Shipping Cost Fluctuations on U.S. Routes
Shipping Cost Fluctuations on U.S. Routes

By the end of 2023, the situation in the Red Sea has escalated, causing numerous disruptions in the sea freight transportation of goods through the region. Six of the world’s top 10 shipping companies—Maersk, MSC, Hapag-Lloyd, CMA CGM, ZIM, and ONE—have ceased voyages through the Red Sea. Rerouting journeys forces longer routes, circumventing Africa and passing through the Cape of Good Hope instead of the Suez Canal. Schedules from Asia to Europe/Mediterranean/East Coast of the United States are extended by at least 10 days, incurring additional material costs.

Suspending transfers through this area also complicates the repositioning of empty containers at some ports in the Red Sea, Israel, and the Mediterranean, resulting in an anticipated shortage of empty containers. Additionally, drought conditions in the Panama Canal and the risk of piracy in the African region (Somali) adversely affect maritime transportation.

Medium-Term Impacts:

The strongly increasing in Ocean Freight and reduced available space, resulting in a scarcity of empty containers.
Port congestion in Northern Europe/West Coast of the US.
Prolonged delays for shipments to the East Coast of the US.
Delays in Asia import and export activities before and after the Lunar New Year due to delayed vessels and empty containers.
Rise in insurance premiums for war risk in the Red Sea.

Advice from WR1:
Businesses should plan and book shipping space at least 4-5 weeks in advance to ensure availability.
Consider alternative transportation methods (if feasible), such as road, rail, and air transport.

Zalo Wr1