In recent times, the epidemic seems to have caused another big wave around the world. The first is India, with more than 500,000 confirmed cases a day at its peak. Next, both the UK and the US ushered in another wave of small climaxes. In addition to these countries, Vietnam has ushered in a major peak recently, with an average of nearly 10,000 confirmed cases every day. The number of confirmed cases in Vietnam so far has exceeded 100,000.
Global brands from Toyota to Nike are being forced to close major production bases in Vietnam, as global supply chains undergo their most challenging peacetime history In a year, we may face even greater disruptions.
With increasing lockdowns in Vietnam, one of the world’s most important apparel manufacturers, around a third of the country’s textile and apparel factories are currently closed due to Covid-19. Data from the Vietnam Textile and Apparel Association (Vitas) shows that 30% to 35% of the country’s clothing factories are currently closed, and Nike is one of the big brands struggling with this shutdown. Electronics companies including Samsung and Foxconn are also reportedly struggling with production due to lockdown regulations imposed in parts of Vietnam.
Currently, more than half of the provinces in Vietnam have begun strict lockdowns. Many factories in Vietnam have been affected, and some factories have shut down. With the current situation, many European and American importers are speculating that the Christmas season in Europe and the United States will be in trouble this year, and Vietnam may not be able to count on it and can only purchase supplies from China. And due to the high tariffs in the United States, it is very likely that the price of Christmas gifts will soar again this year. In this sense, the shutdown of Vietnamese factories coupled with the U.S. government’s large-scale money printing may further intensify inflation on a global scale.
Surging Covid-19 cases have increased the number of ships off Vietnam’s southern coastline, and ports are now turning away ships and struggling to find available containers. Due to no available space in the facility, shipping company Hapag-Lloyd issued a notice on the 5th that due to the disruption caused by the new coronavirus epidemic in Ho Chi Minh City, Vietnam, the Cat Lai Terminal in Ho Chi Minh City has temporarily suspended the reception of products whose production activities have been suspended or stopped. The customer/company’s import containers have stopped receiving refrigerated cargo until the middle of this month.
Hapag-Lloyd stated in the notice that TanCang-Cai Mep International Terminal, Vietnam’s new port, TCIT) has the following measures for imported containers:
From now on, the acceptance of imported containers from customers/companies whose production activities have been suspended or stopped will be suspended.
Before August 16, 2021, the terminal will suspend the import of refrigerated containers to facilitate the disassembly and assembly of goods into other containers.
Starting from August 5, 2021, the acceptance of goods that occupy a large space in the cargo yard (such as oversized, overweight goods, project goods, OOG goods, etc.) will be suspended until further notice.
Restrict the import of containers unloaded at container yards.
In the worst-case scenario, when the storage capacity of the container yard reaches the maximum allowed level, the terminal should stop accepting incoming ships.
Taking into account the customer’s freight plan, Hapag-Lloyd offers the following solutions:
Transshipment service: from Vung Tau to Cat Cargo transportation in Lai is subject to final approval by Cat Lai Terminal. For any shipment to Cat Lai, customers must provide an LOI for pickup within 72 hours of the shipment arriving at Cat Lai.
Direct service: If business or production is suspended, the terminal reserves the right to move containers to other terminals or ICDs, and any costs incurred will be borne by the cargo owner.
Where feasible, provide COD to alternative terminal/ICD.
In addition, export containers from Cat Lai and TCIT are subject to the following restrictions: Starting from August 5, 2021, the receipt of goods that occupy yard space (such as oversized, overweight cargo, project cargo, OOG cargo, etc.) until further notice.
Most of Vietnam has been blocked for nearly a month, with port productivity declining and ships south of Vung Tau Waiting in line at the berth. Many ports now have only 50% of their workforce working. The situation is made worse by a shrinking number of available truck drivers, while factory output has also fallen sharply in recent weeks.
The troubled port situation is also spreading northward. Last week, the government decided to block the port of Qui Nhon in the central region of the country due to a large-scale outbreak. The outer anchorage in coastal defense in the north of the country is also particularly busy at the moment.
Container shipping companies and freight forwarders warned that sailing plans for ships returning to Asia were disrupted, and…Vietnam will face a shortage of containers in the coming weeks as the coronavirus pandemic causes trucking delays and factory closures.
Facing a 14-day lockdown after more than three weeks, Vietnamese exporters are increasingly worried about how to get goods out of factories and find truck drivers to transport goods to ports. Shippers shipping cargo from Ho Chi Minh’s Cat Lai and Cai Mep ports, like most other major Asian ports, will face delays of two to five days, according to freight forwarder SEKO Logistics.
A spokesman for liner company HMM said: “The outbreak at Cat Lai has had a negative impact on logistics in the region, resulting in reduced operational efficiency. Port congestion has put pressure on container operations , including import and export procedures.”
According to HMM, barge services have also been disrupted, which has made berthing at Cai Mep Even harder to secure. The deepwater terminal at Cai Mep is the main gateway to southern Vietnam, but shippers prefer to use Cat Lai, which is closer to Ho Chi Minh City despite its restricted draft. As a result, cargo typically must be transported by barge or truck approximately 50 miles between the two ports.
Delays at ports limit the efficiency of truck drivers, who are also experiencing delays in getting through a network of health checks set up as part of government quarantine measures. Quarantine of drivers infected with COVID-19 further limits truck capacity at Ho Chi Minh City port.
SEKO Logistics said that equipment shortages at major ports in Vietnam are expected to continue throughout August, with 40-foot high containers being the most scarce. Maersk told customers in a monthly update that it expected a shortage of containers to no longer meet Vietnam’s export demand. </p
