Vietnam has really been in the eye of the hurricane when it comes to COVID. A second wave is hitting the country hard, and it’s affecting both the personal lives of residents as well as the businesses and production facilities in the area. Unfortunately, this means that all supply chains connected to the country are also experiencing the trickle down effects of the case surge.
With companies beginning to stock up on inventory for winter holidays coming soon, the pressure is on to get shipments out of Vietnam. However, the skyrocketing COVID cases and lockdowns are bringing all production facilities and ocean port activity to a screeching halt. So what are shippers doing to alleviate the blockage in the supply chain? Switching to air shipping.
Air Shipping Demand for Vietnam Shipments
Switching to air shipping is providing the opportunity to get cargo overseas significantly faster than ocean shipping. And with all the ocean port congestion both on the export and import side of the U.S., shippers are realizing that ocean shipping is no longer a viable option for stocking merchandise before winter.
The lockdown situation in Vietnam is moving fast. The city government of Ho Chi Minh announced that residents will be required to shelter in place beginning August 23rd. The implications of these lockdowns also means that several factories are completely shut down.
The reason this news is so catastrophic isn’t simply the effect it has on retailers attempting to stock inventory for holidays, but the fact that the larger majority of winter wear actually comes from Vietnamize production facilities. In other words, the U.S. heavily relies on Vietnam for our supply of coats, gloves, and other winter clothing.
Business owners, port officials, shippers, and production facilities have all agreed that global demand is off the charts, and far out of balance with the lack of supply – both in work force and shipment availability.
Currently, many countries are experiencing a simultaneous increase in product demand, need for shipment capacity, COVID cases, lockdowns, port congestion, and shipment backlogs. Vietnam is no exception. Business between the U.S. and Vietnam has increased significantly in the last several years as well. Since 2010, U.S. imports from Vietnam have quintupled to a startling $77 billion, and the country is now heavily responsible for much of the available inventory stock in the U.S.
Ho Chi Minh Airport Slowdown
Unfortunately, the switch to air shipping doesn’t come as seamlessly as shippers may hope. The worker shortage, social distancing rules, and shorter work hours in Ho Chi Minh mean the airport is experiencing extra congestion and lower labor availability.
The airport largely relies on cargo being carried by passenger flights, however, with the pandemic and lockdowns around the world, there are drastically less passenger flights happening at the moment. This means cargo piles up at the port and is essentially forced into delays and a limited port workforce does everything they can to get cargo aboard whatever air vessels are available.
Due to the rise in demand, rates have significantly increased as well. Recent statistics show rates have nearly doubled over the last several months on air shipments coming from Vietnam.
What to Do Now?
The word for everyone at this point is to be patient and work with your strategic shipping partners to devise a solution that keeps your cargo safe and en-route to its destination. Unfortunately, much of this simply has to be waited out. But it’s important to hold a conversation with your freight forwarder about the status of your cargo, the current market, and what they genuinely expect to improve or decline in the coming days and weeks. These conversations can get the ball moving regarding proactive solutions to streamline your current logistics process.
If you have any questions at all about your freight, the Vietnam airport situation, or any related topics, please don’t hesitate to reach out to one of our team members! We are happy to help in whatever way we can!