Enterprises need to accelarate restructuring and increase resilience

Wednesday, Apr 14, 2021 08:31

Tran Thanh Hai, Deputy Director of the Import and Export Department (Ministry of Industry and Trade).

Tran Thanh Hai, Deputy Director of the Import and Export Department (Ministry of Industry and Trade), talks to the People's Army newspaper about how businesses should be prepared to adapt to the new situation as the COVID-19 pandemic has seriously affected import and export activities.

During the COVID-19 pandemic, which products are showing strong business and which are the most affected?

Product groups that still maintain high growth are wooden furniture, machinery, electronic equipment, computers, tablets and communication devices like cell phones. Consumer demand is still very high for these products, even in the context of social disruption. The affected groups in 2020 that can be clearly seen are textiles and footwear. These are two groups of goods with decreasing consumption demand in the context when people have to tighten their spending.

The COVID-19 pandemic is still complicated, what should businesses and regulators pay attention to?

Looking back at 2020, when Viet Nam implemented COVID-19 prevention and control along with striving to achieve economic development targets, the most encouraging thing is the adaptability of enterprises. Enterprises have quickly transformed, found new sources of raw materials, new markets, overcoming the difficulties of supply chain failures. The trade surplus of US$19 billion in 2020 is the recognition of the adaptability of enterprises. It can be said that the COVID-19 pandemic has also made businesses speed up the process of restructuring and adapting faster.

In 2021, in the event that the COVID-19 will be relieved, the effects of the pandemic will remain long-lasting, at least for a few more years. In addition, the market still has many other risks, businesses need to pay special attention to this, and cannot be subjective.

Viet Nam has free trade agreements with most of the basic and major markets in the world. Businesses have to reorganise, learn carefully and make better use of the advantages from these agreements. Regarding governance, improving the quality of human resources as well as administrative reform to support businesses will be the issues that Viet Nam still has to persistently improve in the long run.

In the last months of 2020, the problem of the lack of empty containers had a great impact on sea freight rates. What is being done about this?

In the last months of 2020, the cost of ships and empty containers increased greatly. The reason is due to the impact of the COVID-9 pandemic and the key ports in Europe and North America lack the capacity to unload/upload and handle goods. This is the main cause of congestion at ports, leading to slow clearance of container ships. This situation has been investigated and resolved by agencies, ministries and branches of Viet Nam. Specifically, the Ministry of Transport and the maritime state management unit has cooperated with the Ministry of Industry and Trade to conduct working sessions with shipping lines, shippers' associations as well as logistics service enterprises to find out problems as well as offering solutions. The Ministry of Transport also presides over the establishment of an inspection team to check the public announcement of changes in freight rates. They are also working with shipping lines to increase the number of empty containers brought to Viet Nam.

What does the lack of empty containers mean?

The situation of high shipping charges, the lack of empty containers occurred quite suddenly, causing difficulties for import-export businesses. Preparing scenarios to cope with potential risk factors will be a great lesson for businesses and import-export businesses.

In addition, market diversification is also one of the issues that should be noted. In logistics, we can diversify vehicles. For transport to Europe, in addition to the sea transportation, Viet Nam has other means like railway transportation through China, Kazakhstan, Russia and Belarus to Europe. This is a shipping channel that Vietnamese businesses in recent times have not known much about and have not actively exploited. This occasion will also be an opportunity for businesses to learn to diversify modes of transportation, and reduce the dependence factor as well as the impact of the increase in freight rates and lack of containers. — VNS

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