Latest tensions force trade contingencies

Escalating military tensions in the Middle East are raising concerns among Vietnamese exporters over rising freight and insurance costs, while threatening cold chain stability and trade flows through key global shipping routes.

- By Nguyen Thu

10 BUSINESS CIRCLE

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the impact of military tensions on Vietnam's seafood industry extends beyond rising transport costs to include potential cold chain disruptions, localised supply shortages, and price fluctuations across different product segments.

“The Middle East is a vital transit corridor for global trade, especially through the Strait of Hormuz,” a VASEP representative said last week. “When security risks increase, shipping lines are forced to change routes or temporarily suspend operations, significantly extending transit times and pushing transportation costs higher.”

Major shipping companies such as Maersk, Hapag-Lloyd, and CMA CGM have already introduced war risk surcharges while tightening conditions for accepting refrigerated containers on some routes.

Within just a few days, freight rates from Asia to Dubai have nearly doubled, according to VASEP, increasing export costs for Vietnamese seafood companies and putting additional pressure on profit margins.

Maritime insurance has also tightened in response to heightened risks in the Gulf region. Some insurers have raised premiums substantially or narrowed coverage for vessels travelling through high-risk waters.

“Seafood exports rely on strict temperature-controlled logistics,” the VASEP representative said. “If shipments are delayed or refrigerated containers become limited, the quality of products may deteriorate, creating significant risks for exporters.”

The Middle East is also a key consumption market for shrimp, salmon, and tuna, meaning that any disruption to supply chains could lead to temporary shortages and price volatility in the region.