Production throughout South Vietnam is facing pressure as manufacturers and logistics firms deal with a prolonged lockdown, according to The Loadstar.
Firms are worried about financial costs, labor shortages and supply chain disruption. Ho Chi Minh City recently introduced the strictest Covid-related lockdown where residents cannot leave their homes for the next two weeks even for food. Factories can continue operations, but only under strict “closed loop” conditions, where workers sleep onsite.
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Julien Brun, a managing partner for the supply chain consultancy CEL, told The Loadstar that factories that were still operating ran at 50%-70% of nominal capacity.
“The challenge for most labor-intensive factories is that, once a Covid case is detected, the whole factory is closed. This gives an extra layer of uncertainty behind the available capacity to produce to fulfill orders,” he told The Loadstar.
The Meishan Terminal in Ningbo, China, resumed normal operations on Wednesday after a two-week lockdown because of a positive coronavirus case, according to Supply Chain Dive.
In-gate, out-gate and berthing activity all resumed. The full opening came after a week of a phased reopening. Ningbo Meishan terminal started turning away vessels in early August following the positive test of a worker. Port congestion in Asia, Europe and the United States was severely affecting carrier services and cutting the available capacity.
“The disruption in Ningbo was not as bad as feared but has created a backlog in Ningbo and caused unwelcomed additional congestion at alternate ports in the region,” Judah Levine, research lead at Freightos, told Supply Chain Dive.
Labor shortages throughout China’s manufacturing industry are materializing as young workers shun factory jobs and migrant workers stay home, according to the Wall Street Journal.
The trend offers a possible preview of the larger challenges ahead as the workforce ages and shrinks. Global demand for Chinese goods surged this year, and factory owners said they are struggling to fill jobs that make everything from handbags to cosmetics.
Migrant workers are worried about contracting Covid-19 in cities or factories. And young people are gravitating toward service-industry jobs which pay more or are less demanding. The trends reflect similar labor mismatches in the United States, where employers are having a hard time hiring workers despite unemployment numbers, the article said.
“Many factory owners are in a dilemma now. They do not know whether they’ll be able to make a profit if they accept new orders,” David Li, general secretary of the Asia Footwear Association, told the WSJ. “Their biggest headache is the struggle with finding workers.”
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