Unstable Suez: How Should Vietnamese Exporters Respond to the Cape of Good Hope Detour?

As a result, container traffic through Suez dropped by as much as 90% in 2024, while freight rates on lanes such as Shanghai–Rotterdam surged by around 80% between 2023 and 2025.

Although some major carriers cautiously started to return to the Red Sea–Suez route in late 2025, the liner industry still treats this corridor as only partially reopened and subject to elevated risk, with no clear timeline for a full return. For Vietnamese exporters, who depend heavily on Asia–Europe flows, these disruptions are no longer a distant news story, but a very real challenge involving lead times, costs, contract terms and the need to diversify routes and modes.

The cascading impact of the Cape detour on costs and lead times

When ships shift from Suez to the Cape route, the additional 10–14 sailing days slow down container rotation and reduce the number of round trips each vessel can perform annually. With fleet capacity growing more slowly than demand, this translates into tight space and equipment shortages across global networks. Under such conditions, container freight rates between Asia and Europe have spiked, at times multiplying compared with pre-crisis levels, particularly on services to Northern Europe and the Mediterranean.

For Vietnamese exporters, the first visible effect is inflated lead time. FOB/CIF contracts structured around an assumed 28–32 day transit via Suez suddenly face an extra two weeks at sea when vessels have to round the Cape. If production schedules, LC openings, and European promotion calendars are not adjusted accordingly, the result can be late deliveries, missed marketing windows, penalty charges, price discounts and even loss of repeat business in subsequent seasons.

The second impact is cost – not only in the form of higher ocean rates. Longer transit means higher buffer stocks at destination and slower inventory turns. Industries such as garments, footwear, furniture and FMCG, which are highly sensitive to shelf timing and seasonal sales peaks, feel the pinch acutely: either they ship earlier and carry more inventory, or they accept the risk of arriving late into the selling season.

Beyond higher base rates, carriers have also introduced or increased a range of surcharges: Red Sea surcharges, contingency surcharges, extra bunker fees and war risk surcharges, among others. In some cases, war risk insurance premiums for vessels transiting conflict-prone waters climbed from about 0.1% of cargo value to around 1%, and much of this additional cost has been pushed back onto shippers through tariffs and surcharges.

If Vietnamese exporters continue to plan as if “Suez is business as usual”, they risk getting caught off guard – with eroded margins, misaligned delivery promises, and insufficient time to adjust selling prices or renegotiate terms with their own customers.

Renegotiating contracts: surcharges, triggers and risk-sharing

As the transport environment becomes more volatile, contracts between exporters, customers, forwarders and carriers need to become more flexible and “smarter”. Instead of a generic statement that “all current surcharges are included in the rate”, parties should explicitly define adjustment mechanisms for significant disruptions, especially those affecting the Red Sea–Suez corridor.

First, shippers should ask for clear, separate lines for Red Sea/Suez-related surcharges on freight quotations and invoices – war risk, detour surcharges, additional bunker fees and so on. When these elements are transparent, it becomes easier to cap certain surcharges or agree on thresholds beyond which rates must be renegotiated. It also gives exporters a more solid basis to explain any necessary price increases to their end customers.

Third, exporters should segment their customers and products when designing risk-sharing arrangements. With large, long-term buyers, it is often feasible to agree on cost-sharing formulas for major logistics disruptions, particularly when there is clear market data on how the Red Sea crisis has pushed up freight rates and insurance costs. For smaller or spot customers, a simpler solution might be to publish a temporary surcharge schedule – valid for a specific period – rather than revising each contract line by line.

Finally, service-level agreements (SLAs) with forwarders and carriers should not be overlooked. Explicit commitments on schedule updates, delay alerts, and support in finding alternative routings can make a major difference during peak seasons. When this data is captured and visualized through tracking platforms, it not only helps exporters manage disruptions more effectively, but also provides a robust basis for evaluating and selecting logistics partners over the long term.

Diversifying routes and modes: rail–sea, sea–air and alternative gateways

From a strategic perspective, the Red Sea–Suez crisis reinforces a timeless lesson: no single route is risk-free. Concentrating all Asia–Europe cargo on one corridor effectively places the entire supply chain into a single chokepoint.

Globally, shippers are reassessing their routing maps. The China–Europe rail corridors via Kazakhstan–Russia–Belarus, despite earlier concerns over geopolitical risk, have regained traction since 2024 as Red Sea issues dragged on, offering transit times of roughly two to three weeks compared with four to six weeks by sea through Suez and even longer via the Cape. Sea–air solutions via hubs in the Middle East have also grown in popularity for high-value, time-sensitive cargo, combining shorter ocean legs with regional air distribution into Europe.

For Vietnamese exporters, it is neither realistic nor necessary to shift all cargo from ocean to rail–sea or sea–air. The more practical approach is to build a portfolio of “strategic gateways”:

• Maintain traditional ocean services via Suez or the Cape for the core volume that is less time-sensitive, but negotiate more flexible rates and accept longer transit where appropriate.
• Allocate a defined share (perhaps 5–15%) of volume – especially for urgent, seasonal or high-margin SKUs – to sea–air or rail–sea solutions, depending on product characteristics and buyer requirements.
• Diversify European entry ports instead of relying solely on one or two Northern European hubs; consider alternative gateways in the Mediterranean or Eastern Europe where customer clusters are located and schedules remain reliable.

Crucially, diversification should not be improvised on a shipment-by-shipment basis. Exporters, together with their logistics partners, banks and insurers, should design a “scenario matrix”: one set of solutions for partial Suez reopening, another for high-risk but open Suez, and a third for prolonged closure. Each scenario would be tied to specific combinations of routes, modes, cost ranges, safety stock levels and matching contractual terms.

Conclusion

The instability in the Red Sea and Suez Canal shows that global supply chains are entering a phase of prolonged volatility, where geopolitical shocks may recur in different forms. For Vietnamese exporters, the key is not simply to “survive” one crisis, but to upgrade the way they manage logistics and risk: treating transport corridors as strategic variables that must be monitored, modeled and woven into contracts, inventory strategies and sales plans. By proactively diversifying routes and modes, and by embedding clear risk-sharing mechanisms with logistics partners and customers, Vietnamese companies can become less fragile in the face of the next wave of disruptions that will inevitably ripple across the world’s trade lanes.