UPDATE: As of August 16th, Vietnam has extended its shutdown until September 15th. Click here to see all of Vietnam’s Covid updates.
Vietnam Manufacturing Shutdown
Vietnam is extending its lockdown until August 22nd due to rising COVID-19 cases and has imposed strict restrictions to control the spread of the virus. Manufacturing sites may stay open if they can house and feed employees on company grounds or can shuttle workers to and from a collective residence. Unfortunately, many factories can’t meet these requirements and the rest are still waiting for approval.
What It Means For Your Supply Chain
With the recent Covid restrictions, many supply chain companies are forced to close up shop temporarily. As one of the biggest footwear suppliers to the US, the shutdown is already affecting inventory for the holiday season. “Just about every brand you know about is [in Vietnam]. It’s going to have a pretty deep impact on getting goods into the U.S. marketplace,” said Matt Priest, president and CEO of the Footwear Distributors and Retailers of America.
Besides footwear, Vietnam is known for producing textiles, apparel, and electronics. These industries are also experiencing manufacturing delays due to the spread of the virus and the resulting restrictions. After cases surged in Saigon Hi-Tech Park, tech companies like Samsung were forced to reduce their workforce by over half. Some Nidec Vietnam subsidiaries are operating only one shift per day, with a 35% reduction in workforce.
With limited staffing, ports are also more congested and causing companies to move shipments via air freight instead. However, the shutdown may do some good – it could reduce the pressure on ports and give the supply chain time to catch up on the current shipping backlog.
Know Your Options
In addition to Vietnam, Blacksmith International helps companies find competitive manufacturers in other locations such as China, India, Bangladesh, and Mexico. To learn more about the comparative advantages of manufacturing in different countries, click here.
Blacksmith International is continuing to monitor the ever-changing Covid situation. Blacksmith has the expertise to help navigate these manufacturing and shipping delays. If you need help with your supply chain, please contact us.