Covid In Viet Nam And How It Affect Your Business?

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Covid In Viet Nam And How It Affect Your Business?

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21/07/2021

General covid situation in Viet Nam:

After nearly one and a half year Viet Nam was pretty quiet in number of Covid cases under 3,000 (only less than 3 cases per 1,000 population), since May, the number started to increase 2 digits, June increased 3 digits and July is increasing 4 digits every day.

The North of Viet Nam witnessed the commence of the increasing in May, with a lot of cases discovered in factories and industrial zones, but very soon after that, the South’s new cases become more than the North.

The South of Viet Nam is the main area of economy contributing more than 70% value of the country’s business, with Ho Chi Minh city in the center with ports, airports, logistics center, and country head office of many businesses, surrounded by the cluster of industrial provinces: Dong Nai, Binh Duong, Ba Ria Vung Tau where many big factories are located.

Covid control regulations by authorities:

In order to control covid spreading situation, the authorities impose a lot of regulations and limits on the moving of inhabitants, cargo, and workers.

For workers in the factory, authorities impose the regulation of “3 activities – 1 place” (workers will have to work, eat and live in the factory) or “1 route – 2 points” (workers stay in 1 dorm or hostel and being shuttled to factory only, not allow to go elsewhere), in factory and canteen workers need to be distanced min 1.5m from each other.

Action of factories:

Only few factories can match the requirements 100% and maintain normal activities.

Most factories have cut down big part of their activities and only maintain small part whereas can match with the requirements.

Some factories due to their conditions, cannot match the requirements and have to stop working.

Consequences:

Cost: increasing, because workers working and live in such poor conditions and apart from families, they request increase in salary to compensate. On the other hand, those workers who cannot work, still being paid 75% of salary for doing nothing, which is really a burden to factories. Moreover, factories have to pay the cost for arranging food, necessaries and accommodation for workers.

Production: decrease, because of difficulties in material supplies, worker’s force and worker’s mental health.

What authorities will do next?

With the trend of increasing in number of new cases every day, we expect that in near future authorities will impose more severe control method and factories, want it or not, have to find ways to adapt.

How this situation will affect your business?

Need you to decide fast

Since the control methods keep changing with the tendency of more and more severe, we should not hesitate:

  • If you want to buy something, buy it fast, because the price can increase.

  • If you have any cargo ready to delivery, take it fast, because the shipping can be difficult in next day.

Freight trend:

  • If the carriers maintain same allocation for Viet Nam, the freight will decrease because products export will be less.

  • If the carriers cut allocation for Viet Nam and switch to China, the freight will maintain at high level now.

  • Airfreight will be increased.

What Vantage do

Our first advice to all customers is, please try best to adapt yourself to match the new requirements, don’t shut down and wait till the requirements match yourself! No one knows how long this situation will last, so the faster you adapt and resume your manufacturing, the better position you get in front of your customers and competitors.

Being well-prepared for many variously difficult situation, Vantage is flexible enough to match with changing requirements, and stable enough to provide a reliable service. Our knowledge and updates effectively help clients in their very specific situation.

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