Rising COVID cases in Vietnam are creating a large logjam at the country’s key ports

The global supply of Integrated Circuit Boards (ICBs), Clothing and Textiles face a large disruption as rising COVID cases in Vietnam have restricted activity in key ports in the country.

With a lockdown imposed in many parts of the country, containers are delayed entering in and out of the port of Cat Lai and Quy Nhon. Cat Lai is the second largest Vietnam port (measured by container shipments) according to Russell’s ALPS Marine with an annual flow of trade of $76 billion.

Meanwhile, Quy Nhon has an annual flow of $4 billion according to Russell’s analysis.

Yet, with the delays at Cat Lai and Quy Nhon, many shipments have diverted their containers towards Cai Mep (the largest port by container shipments according to ALPS Marine) creating a huge backlog there too. The port has an annual flow of trade of $84 billion.

Vietnam recorded 4,843 new COVID cases in one day in July, which was more than they recorded in the entire of 2020 (1,465 cases).

The impact of the disruption has affected many corporations too as two suppliers of Nike in Vietnam halted production due to the rising COVID cases. In a Nike report, cited by S&P Global Market Intelligence, 50% of total Nike branded footwear is currently produced in Vietnam.

Furthermore, S&P analysis showed that Vietnam accounted for 49% of U.S seaborne imports linked to Nike and its products in the second quarter of 2021.

ALPS Marine analysis shows that $5 billion’s worth of exports travels from Cai Mep to Los Angeles and $2.7 billion to Long Beach, solidifying the importance of the country to US products.

Yearly, the US imports $8 billion from the port of Cai Mep.

Russell’s analysis showed that Clothing and Textiles were one of the largest exported commodities from the three Vietnamese ports with a value of $7.2 billion followed by ICBs at $6 billion.