July 26, 2021
COVID-19 Measures in Vietnam Pummel an Already Bruised Supply Chain
Strict lockdown measures to suppress Vietnam’s worst outbreak of COVID infections since the pandemic began are severely curtailing factory production, especially for electronics, footwear, apparel and textiles, and ocean terminals lack sufficient equipment to export goods. And the situation is likely to get worse, just as importers and exporters enter the traditional peak shipping season for the Halloween and Christmas holidays, logistics companies and analysts say.
The latest hot spot for rising infections is Ho Chi Minh City, where strict COVID quarantines have been in place since July 9. The number of positive cases topped 5,800 on Sunday, the highest level since the start of the pandemic.
Under new rules, manufacturing sites are allowed to stay open only if they have a plan to house and feed workers within the factory compound instead of having them commute back and forth to their homes. Vietnamese authorities also allow companies to transport workers to a collective place of residence, such as a hotel or dormitory. And employers must test workers for COVD-19 every seven days at their own expense.
The new restrictions forced many factories to close, while others that meet conditions for staying open have not been able to get registrations approved by authorities.
Restrictions against public gatherings have been extended until August 1 and likely will also be extended beyond this week for manufacturers.
Several factories in the Saigon Hi-Tech Park were ordered to temporarily shut down July 13 after more than 750 COVID-19 cases were reported there, the Vietnamese newspaper VN Express reported. Affected factories included the Samsung Electronics HCMC CE Complex, which reduced its workforce from 7,000 to 3,000 and was developing plans to isolate employees at its complex. Other companies unable to house all employees on-site, including electronics manufacturer Intel, have reportedly rented hotels nearby and are using daily buses to bring employees in.