{"id":105166,"date":"2025-05-30T16:31:37","date_gmt":"2025-05-30T09:31:37","guid":{"rendered":"https:\/\/advantage.vn\/?p=105166"},"modified":"2025-05-30T16:31:37","modified_gmt":"2025-05-30T09:31:37","slug":"logistics-businesses-busy-during-the-golden-time-of-tariffs","status":"publish","type":"post","link":"https:\/\/advantage.vn\/en\/logistics-businesses-busy-during-the-golden-time-of-tariffs\/","title":{"rendered":"Logistics Businesses Busy During the ‘Golden Time’ of Tariffs"},"content":{"rendered":"

Taking advantage of the 90-day suspension of new tariffs from the US, export businesses are racing to complete orders, causing shipping businesses to become overloaded.<\/strong><\/p>\n

Logistics overload, rising costs<\/span><\/h2>\n

Sharing with KTSG Online, Mr. Tran Chi Dung, General Secretary of the Vietnam Logistics Business Association (VLA), said that the new US tariff policy is causing many difficulties for Vietnamese logistics enterprises. In particular, increased logistics costs cause delays in delivery, increased inventory and difficulty in coordinating transportation.<\/p>\n

Representative of Advantage Logistics, Mr. Hoang Le Quyen, Deputy Director, said that from the end of March to mid-April, the logistics industry recorded a widespread overload. Shipping lines and airlines witnessed a sudden increase in bookings and cargo output, leading to overload and drop in load.<\/p>\n

Port and warehouse enterprises have been forced to temporarily stop receiving more goods due to a sharp increase in inventory, shortening the time of storage at the port waiting for export, such as at Cat Lai port, the time for receiving containers has been reduced from 7 days to 3 days for dry goods and 24 hours for refrigerated goods.<\/p>\n

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Most truck and container trailer transport enterprises have recorded a record increase in operating time for a shipment, many trips taking more than 24 hours compared to normal due to the extended waiting time for loading at the warehouse, traffic jams on the way to the port and waiting to unload at the port waiting for export because the port yard is overloaded.<\/p>\n

Mr. Quyen explained that the logistics industry in Vietnam has been a highly competitive industry for many years now with low barriers to entry, and the number of businesses operating in the field reaching 25,000 by the end of 2024. The industry has witnessed many cost increases due to the general situation in the world such as the Covid-19 pandemic, the Russia-Ukraine war, the US-China trade tensions, the Red Sea war in mid-2024, etc.<\/p>\n

Before the US imposed tariffs, the sudden increase in logistics demand in late March and early April only caused transportation costs to increase by 10-20%, which was considered insignificant and businesses had adapted. However, since mid-May, when US import tariffs began to be calculated based on the time of arrival, orders are expected to decrease, causing logistics costs to decrease but profit margins to plummet due to weak demand and fierce competition. The logistics industry is forecast to fall into a difficult period.<\/p>\n

More worryingly, from October, the US will impose tariffs on ships owned or built in China, which account for 70-80% of the international fleet, which could push up transportation costs, disrupt global supply chains and squeeze the already stressed logistics industry, he pointed out.<\/p>\n

From another company, Mr. Nguyen Ngoc Thach, CEO of Smart-Link Logistics, said that currently, shipping costs for each route are fluctuating unpredictably, increasing by 30-50% for export goods to Vietnam’s main markets to the US compared to the time before the tax was imposed. The price fluctuates unpredictably because the goods exported to the US from Vietnam have increased but the goods from China to the US are not available, depending on whether the goods are cold or dry, so the intensity of the change will be in the coming time.<\/p>\n

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Another important part is that the current global cargo volume is decreasing, so shipping lines will withdraw their cargo for maintenance, reducing supply and possibly pushing up freight rates. He assessed that in addition to overloaded orders, some non-urgent items that can be replaced such as textiles and furniture in Vietnam are not prioritized by importers and tend to temporarily cancel or postpone orders pending new information.<\/p>\n

He noted that after President Trump announced a 46% tax on Vietnamese goods from April 9, but then temporarily reduced it to 10% and extended it for 90 days for negotiations, the number of orders from the US increased by 15-20% compared to the same period last year. This is considered a “golden opportunity” for Vietnamese businesses to boost exports before the new tax rate can change. Key industries such as textiles, wood products, seafood and electronics are accelerating to take advantage of the preferential tax rate of 10% instead of 46%.<\/p>\n

Invest in technology, diversify markets to cope<\/span><\/h2>\n

A quick survey from VLA and reference from EuroCham shows that more than 70% of European businesses in Vietnam rate the level of volatility as \u201chigh\u201d or \u201cvery high\u201d due to concerns about US tariffs, causing delays in strategic decisions. Although 47% do not have direct relations with the US, they are still indirectly affected by the global supply chain. 25% of businesses identify the risk of loss, many units are cutting costs, personnel or considering relocation.<\/p>\n

Net profit is expected to decrease by 10-30%, most commonly 20%. Regarding specific impacts, 69% recorded a decrease in orders from the US, 61% had their contracts canceled or postponed, and 46% were under pressure from increased logistics costs. If the tax policy is applied, export, transportation, logistics and industrial real estate businesses will be severely affected.<\/p>\n

With the possibility of a slowdown in exports to the US, Vietnam\u2019s logistics industry is at risk of excess capacity in many segments. Maritime transport is at risk of a sharp decline in capacity utilization as the global supply of vessels is currently about 15% oversupplied. Meanwhile, the warehouse system may fall into a state of short-term overload and then quickly become redundant if export demand suddenly decreases. Businesses also face inventory of containers, packaging and packing materials as logistics activities slow down.<\/p>\n

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To help logistics businesses cope with the changes after the new tax is applied, VLA has made important recommendations. Businesses need to be steadfast and coordinate closely with the Government, ministries and domestic and foreign partners to negotiate taxes, and monitor and share information to maintain an early warning channel. Diversifying export markets, making the supply chain transparent, optimizing processes and reducing costs are also important factors to maintain competitiveness.<\/p>\n

In addition, businesses need to strengthen cooperation with partners, invest in technology and develop new services to meet customer needs and improve operational efficiency. VLA also encourages the application of common service platforms to optimize costs and connect customers.<\/p>\n

Mr. Quyen emphasized that logistics enterprises need to constantly update the market, respond flexibly to changes, strengthen connections to create value chains, and develop internal strength through improving expertise. At the same time, the company applies technology to optimize operations and develop some more specialized services and terminal procedures for the industry.<\/p>\n

According to Mr. Quyen, the golden period for exporting goods to the US will last until mid-May for goods transported by sea and until mid-June for goods transported by air.<\/p>\n

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Vietnam currently has about 45 days to export goods by sea to West Coast ports and 30 days to East Coast ports in the US, in order to have ships arrive before July 1, 2025, when the new tax rate can be applied. For air freight, the shipping time is only 1-5 days to all airports in the US, but is usually limited to urgent, specific and high-value goods. Businesses need to closely monitor the latest developments in tax negotiations between Vietnam and the US to proactively adjust their export plans, the representative of Smart-Link Logistics added.<\/p>\n

In the coming time, the company has prepared a market expansion plan early, the team has also connected with some markets in the EU, India, China to learn about the standards and techniques that customers require. He also actively participates in international fairs to find new customers to balance the 30% of the US market so far.<\/p>\n

\u201cTo avoid being passive in the worst case after 90 days, the company also diversifies the market, however, not all of them are its target customers, the company must choose a market to exploit in depth, invest properly in human resources to share the pressure from the US market,\u201d Mr. Thach added.<\/p>\n

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