Prime Freight’s summary of a December 2020 report by The Loadstar. Read the original for the full story.
In December 2020 The Loadstar reported that the move of manufacturing from China to Vietnam was entering a second phase, and that the extra volume was straining Vietnam’s container ports.
Vietnam was expected to be one of the few economies to grow in 2020, with exports up 11% to $80 billion in the third quarter. A logistics executive said companies were no longer just moving orders to existing Vietnamese factories, which were now overbooked, but setting up regional hubs, including for higher-value products such as laptops. He warned that Vietnam’s legal and logistics infrastructure was not ready for such high expectations, and expected it to become one of several ASEAN sourcing locations alongside Thailand and Indonesia.
At Cat Lai, Ho Chi Minh City’s main container terminal, a forwarder said export yard space was at 120% of capacity, ships waited two to three days for a berth and 10–20% of volume per call was being rolled. Securing equipment and space for spot cargo took two to three weeks, and rates had risen as much as 140% to the US West Coast.
What it meant for shippers
Moving production to a new country does not automatically bring logistics capacity with it. Shippers diversifying into Vietnam at the time had to allow for longer booking lead times, rolled cargo and higher spot rates.