General

On one side is the soaring number of new crown infections, on the other side is the local factories in Vietnam that may be closed due to the worsening epidemic. The latest data released by the Vietnamese health department showed that there were 9,690 new cases of new crown infections in Vietnam on the 8th, a record of the highest number of new infections in a single day since the outbreak. Most of the new infections came from Ho Chi Minh City and its neighboring Binh Duong and Dong Nai provinces. The record-breaking increase in cases has forced the large-scale closure of Vietnamese factories, which has once again strained the global manufacturing supply chain.

Among them, Ho Chi Minh City, Vietnam's largest city, was the worst affected. Last month, the city implemented strict social isolation measures, including regulations on the transportation of workers, and the deployment of employees in factories and workshops.

As an important manufacturing base in the world, the port of Ho Chi Minh City has a backlog, affecting the production capacity of many factories, and more and more small companies have closed down. Take Nike as an example. In late July this year, S&P Global warned that Nike's Vietnam-made sports shoes may face the risk of out of stock. Previously, Nike's two suppliers in Vietnam, Chang Shin Vietnam Co. Ltd. And Pou Chen Corp (Taiwan Baocheng) stopped production due to the epidemic.

Adidas warned last week that by the end of this year, supply chain constraints could cause sales losses of up to 500 million euros. Feng Tay, another Taiwanese sports shoe manufacturer, also closed several factories last month. According to data from Nike's website, Winterthur's shoes account for one-sixth of Nike's annual sales. The Vietnam Textile and Apparel Association recently stated that more than 30% of garment and textile factories in the country have been closed.

In addition to clothing and footwear, other industries such as electronic products have also been hit hard. "As all provinces in Vietnam are hit by the new crown epidemic, the uncertainty of the situation is unprecedented. Buyers have to adopt plan B or plan C, including outsourcing production to another country." Vu of e-commerce platform Global Sources Ngoc Khiem said.

Currently, the blockade in southern Vietnam has resulted in the accumulation of 100,000 TEUs of cargo in the Cat Lai port in Ho Chi Minh City, and additional congestion caused by restrictions.

According to data from Saigon New Port (SNP), the yard density of Cat Lai Port (Cat Lai) is currently about 85%, with 106,700 TEU containers blocking the terminal, even though 2,000 containers have been cleared a few days ago.

SNP stated that it has encountered a "rapid surge in a large backlog of imported containers" at Cat Lai, which has had a negative impact on the loading and unloading of ships, and has taken measures to encourage shippers to pick up the goods, including providing free transportation to nearby locations. storehouse.