Covid-19 restrictions risk continued supply chain disruptions

Vietnam
Published:  24 August, 2021

Tiền Phong reports that prolonged distancing and restrictions risk disrupting domestic supply chains across Vietnam.

Dong Nai reportedly has more than 1,000 businesses implementing the “three on the spot” rule but each company can only maintain about a third of the employees needed. The rule means that employees must work, have meals and rest in the same area.

Enterprises and employees in the first group must conduct production, have meals, and rest after work at the same spot. Otherwise, businesses must ensure isolated production and accommodation at two separate locations, connected by a single transport route for workers to commute.

According to the leader of Saigon Newport Corporation, fluctuations in freight rates, shortage of empty containers and temporary supply chain disruptions have created barriers for the development of the economy in general and the logistics sector in Vietnam.

When the pandemic hit Vietnam, there were more than 30 major shipping lines accounting for more than 95% of the country’s imports and exports, according to the Vietnam Maritime Administration. However, restrictions have caused 18 of these lines to close, while the remaining 12 continuously increase prices, causing issues for exporting businesses.

The Vietnam Logistics Association reports that container freight rates to the US in July increased by 50% compared to the end of June 2021. The price of US$9,600 per 40 ft container is five times higher than the pre-pandemic price.

Source: Vietnam Leather and Shoes Association