Escalating tensions in the Middle East are beginning to ripple through Vietnam's export and tourism sectors, with businesses reporting rising logistics, insurance and raw material costs that are forcing them to rethink financial plans, pricing strategies and delivery timelines.
The impact has already made its existence clear to the manufacturers who are heavily reliant on shipping routes through the Red Sea.
Pham Quang Anh, general director of Dony Garment Co., said that Jordan accounts for nearly 20% of his company's exports, with most consignments transiting through the Red Sea corridor.
While shipments have so far proceeded without cancellations, he warned that potential delays of 15 to 20 days could disrupt retailers' peak shopping seasons. If the instability drags on for months, the consequences could extend across clients' entire business cycles, affecting production planning and sales forecasts.
Meanwhile, industrial suppliers are also facing similar concerns. Mechanical and electrical materials firm Cat Van Loi recently delivered its first shipment of equipment for a major thermal power plant project in Saudi Arabia and is continuing subsequent deliveries in phases. However, the company said steep increases in freight surcharges and extended transit times are weighing on project efficiency, even under staggered contracts.
Industry observers say that while existing orders may still move forward with adjustments, contracts expected to be signed in the second and third quarters face greater uncertainty. Some enterprises and associations report that companies are rushing to stockpile raw materials to guard against shortages or missed deadlines, a move that is rapidly tying up working capital.
Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetables Association, noted that shipping lines diverting vessels away from the Red Sea have added several days to transit times. For exporters of perishable goods, longer journeys mean higher costs for refrigerated containers and marine insurance, cutting into already tight margins.
Associations representing the apparel, wood processing and food sectors said they are closely monitoring freight and insurance rate movements. If transport costs remain elevated for a prolonged period, Vietnam's export price competitiveness could be eroded in key markets.
However, the effects are not confined to trade. On Monday, March 2, several travel companies in Ho Chi Minh City also announced a temporary suspension of tour packages to certain destinations in the Middle East. Emergency arrangements have been put in place for tour groups currently in the region, including those transiting through Dubai.
The Middle East has become an increasingly popular destination for Vietnamese travellers in recent years, particularly combined itineraries covering Dubai, Abu Dhabi and Egypt. But amid rising tensions, tour operators say they are facing a surge in requests from customers seeking to postpone trips, cancel bookings or secure refunds.
Travel firms now find themselves balancing safety considerations with the financial and contractual implications of changing itineraries at short notice. With uncertainty clouding both trade routes and tourism flows, businesses across sectors are bracing for further volatility in the weeks ahead.
