However, rising transportation costs remain a significant challenge.
Recently, Dony completed an export order to the Middle East, where transportation expenses skyrocketed to six times the usual cost of $1,500 for a 40-foot container. "The Middle East is a crucial export market, representing half of our revenue. For the remainder of the year, transportation costs will largely depend on the global geopolitical situation. Given the numerous uncertainties worldwide, a reduction in costs seems unlikely in the near future," Linh stated.
In response to the rising costs, Dony Garment has shifted focus to more stable markets in Southeast Asia and several African nations. "These markets present stiff competition but also offer more favorable logistics costs. In some regions, costs have yet to be significantly impacted by the geopolitical climate," Linh explained.
Nguyen Van Thu, Chairman of G.C. Food JSC in Dong Nai province, noted a slowdown in the company's exports as of August. "The decline in order intake could be attributed to several factors, with the surge in shipping costs being a major one," Thu observed. "Transportation costs from Vietnam to Southeast Asia and South Korea have surged by 200%, while costs to Japan and India have increased by 150%."
Currently, the cost of transporting a container of agricultural products ranges between $2,000 and $3,000, compared to the product's modest value of $10,000 to $15,000.
Lam Thuy Ai, Chairwoman of the Board of Members at Ho Chi Minh City-based production and trading firm Mebipha Co., Ltd., added, "Since transportation costs have tripled or even quadrupled since the beginning of the year, we have been forced to develop short-term plans to mitigate the impact rather than focusing on long-term strategies."
