By Tina Wu   Photo：zibik，Link：pixabay

Like other logistics counterparts in American and European countries, Covid-19 situations in Southeast Asian countries have been more at stake in the past few months due to new variants of the virus. Besides Indonesia and Malaysia, we are now covering the latest trade performance and supply chain obstacles in Vietnam and Thailand amidst this new outbreak in the region.

Vietnam

"Electronics export took the hardest hit in May, and factory-to-port driver shortage is a big problem now."

Vietnam has been a major manufacturing center in Asia, exporting footwear, textile and electronic products for multiple international brands to the United States, EU, China and Japan. Since late April, the country started to impose social distancing rules at emerging Covid-19 hotspots, first in Hanoi and Ho Chi Minh City and now in adjacent provinces such as Dong Thap, Tay Ninh and Dong Nai. The number of daily cases turned to a steep cliff in July, with the highest record of more than 9000 new cases on July 24, according to Worldometer statistics. Restrictions against public gathering and workforce capacity are extended to Aug. 1.

Cluster transmission in southern regions has affected textile, footwear and electronics manufacturing due to strict social distancing measures and pandemic clusters in factories and hi-tech parks. Major factories were forced to halt temporarily, including iPhone maker Foxconn and the world’s biggest maker for sneakers Pou Chen Corp. Taiwan-based textile manufacturers Tainan Spinning and Hakers Enterprise also reported that their production decreased by 5~15% because of restricted workforce capacity.

In the first half of 2021, though both export and import volume recorded a year-on-year increase, the country still faced trade deficit of USD 1.47 billion. Electronics product group took the hardest hit from this fourth and most severe wave of infections. The latest trade performance report released by Vietnam Customs indicated export volume of computers & electrical products, mobile phones and parts, machine & equipment all went down in May compared with April.

“Truck driver shortage is a big problem now.” our local staff said, “Cargo still needs to be delivered from factories to ports, but drivers need negative test results from the last three days.”

Workforce capacity will still be the major determinant of manufacturing production and export shipment volume in the second half of 2021. Some factories are still maintaining operations with one shift a day and 40~50% workforce capacity.

Thailand

"Empty container import will be key to annual export growth in 2021 by 10%."

Thailand is now dealing with soaring new cases per day since the third wave of Covid-19 outbreak in April. Just a few days ago, July 26 topped the nation’s daily confirmed new cases with a record-high 15,376 infections a day. Despite restricted inter-provincial transportation, Thai export performance has showed great prospects throughout this year.

“If more than 2,012,581 TEUs of empty containers are imported to Thailand in 2021, namely an average of 176,00 TEUs per month, Thai export this year will be able to grow at least 10% for sure,” predicted by Thai National Shippers’ Council (TNSC).

With strong momentum supported by global economy recovery, manufacturing and logistics sectors in Thailand are still in operation to meet the growing export demand in the past few months.

“Ports are still working but some people work from home,” said our local staff in the country.

Commerce Ministry of Thailand reported that customs-cleared exports recorded greater gains in the past four consecutive months. Thailand-based market research center KResearch also increased their estimate on Thai exports in 2021 from 9% to 13.5% after shipments in June were reported to reach a record-high year-on-year increase in over a decade, by 43.5%.

Though Covid-19 restrictions could affect availability of domestic transport and port capacity, shipping growth in the second half of 2021 is very likely to continue.