Seven changes in global logistics industry: Phaata CEO

The imbalance in the flow of goods and reduced volume of Asian export to the U.S. and EU are some of the changes expected in the logistics industry in the near future, said Nguyen Hoai Chung, CEO of Phaata Ltd., Vietnam’s logistics marketplace.

He made the remark at the HawaExpo 2025, a furniture fair, in Ho Chi Minh City on Friday. Vietnam exported 6.91 million containers of goods in 2024, a 17.2% increase from 2023. Of this, 3.3 million were shipped to North America or 47.7% of the total, according to Chung.

He noted that trade wars, global conflicts, and the election of Donald Trump as the second President of the U.S. have all impacted the world supply chain. The world is also witnessing a trend toward nearshoring and friendshoring.

Companies are shifting production closer to consumer markets (nearshoring) or to political allies (friendshoring), drastically changing traditional shipping routes, such as those between Asia and North America and Asia and Europe.

Economic sanctions are limiting trade with several countries, and ongoing conflicts are disrupting key shipping corridors, including the Red Sea, Black Sea, and Baltic Sea. As a result, transport insurance premiums for high-risk routes are rising. Goods are being diverted to alternative routes, extending delivery times and increasing costs.

He highlighted that the government's Decree 168/2024/ND-CP tightens management of road transport activities. The consequence is increasing domestic transport expenses, affecting the increase in logistics costs in general.

"The process of the government streamlining the apparatus of the political system can cause overlapping and duplication of functions and tasks between state agencies and units and affect the operations of some businesses," he said.

Regarding the changing trends in the world logistics industry, Chung pointed out seven points.

First is the imbalance in the flow of goods and reduced volume of Asian export to the U.S. and EU. To avoid tariffs or take advantage of other incentives, exporting countries can seek to redirect trade, reduce direct exports to the U.S., and increase exports to other markets not affected by U.S. protectionist policies.

This trade redirection can lead to the promotion of new shipping routes, connecting countries that are not affected or less affected by U.S. protectionist policies. In contrast, traditional shipping routes, especially those connecting major exporting countries to the U.S., such as Asia-North America and Europe-North America, may see a decline in cargo traffic due to U.S. protectionist policies.

Second is the fluctuations in freight rates. A reduction in cargo traffic to the U.S. may reduce demand for shipping on some routes, leading to excess capacity. In this situation, shipping lines may have to reduce freight rates to compete and attract cargo, at least on the routes directly affected.

However, it should be noted that other factors such as fuel prices, environmental compliance costs, and other operating costs are still on the rise. This may limit the ability of shipping lines to reduce freight rates. Overall, U.S. trade protectionist policies may add more uncertainty to the shipping market, making freight rates less predictable and more volatile.

Third, the demand for smart, innovative logistics solutions will increase to optimize logistics costs in the coming time. Fourth, there is an increased customs clearance time and costs in many countries due to additional procedures and compliance with new regulations.

Fifth, the risk of strikes at many seaports will occur around the world. Sixth, freight insurance premiums for high-risk routes will increase.

Chung raised some recommendations for Vietnamese businesses, such as optimizing logistics costs and improving competitiveness, enhancing the value and position of businesses in the global supply chain, and expanding supply sources and logistics partners in many different regions.

In addition, Vietnamese businesses should use predictive analysis, real-time monitoring, and control of supply chain activities; use reputable logistics trading platforms to find good freight rates; and find more opportunities to optimize logistics costs and increase profits for each shipment.