|Vietnam port congestion growing as COVID-19 outbreak closes factories
Forwarders and container lines are warning of rapidly spreading COVID-19 infections in Vietnam that have forced the closure of factories, reduced customs manpower to clear air and ocean cargo, and increased congestion at the country’s top port Cat Lai.
“Ocean terminals, airports, operations, trucking, customs, factories — basically everything is affected,” Michael Amri, global head of Sea Freight FCL at Hellmann Worldwide Logistics, told JOC.com Tuesday.
While marine terminals remain as of Tuesday afternoon, the shipping industry is closely watching the events in Vietnam, given that a COVID-19 outbreak in late May partially closed Yantian International Container Terminals (YICT) before spreading to other South China ports. YICT fully reed June 24, but the mega-terminal and other marine terminals are still recovering.
Government officials have exted a lockdown at Ho Chi Minh, now in its second week, until Aug. 1. Due to COVID-19 outbreaks, officials have closed several factories in the Tan Thuan Export Processing Zone and Saigon Hi-tech Park, according to IHS Markit research. Factories within Saigon Hi-tech Park are allowing workers to stay on site to keep working.
Forwarders are reporting factory closures, a growing shortage of truck and driver availability, carriers requiring early -off of export containers, and reduced customs manpower for air and ocean freight.
COVID-19 cases in Vietnam are increasing daily, mainly in the south, and are expected to rise further in the coming days. SEKO Logistics said in a customer advisory that while the north of Vietnam had the pandemic under control, manufacturing areas in the south at Ho Chi Minh, Binh Duong, and Long An provinces have reported more than 1,800 infections at factories and in industrial zones.
“This is particularly severe in labor-intensive production such as footwear and garments. Factories are only allowed to when they have labor planning to stay and work in the factory without leaving the area,” the SEKO advisory stated.
Maersk also issued a customer advisory Tuesday, stating that although export volumes were weak owing to the impact of the COVID-19 outbreak, port congestion is escalating as port and transport workers are forced to isolate.
Congestion led to authorities restricting access to ports, including the main international gateway at Vung Tau. That means containers are only allowed to enter ports up to 72 hours before a vessel’s estimated departure. This has further reduced trucking capacity, Maersk said in its advisory.
Truck drivers must also produce a negative COVID-19 test certificate on some transport corridors, leading to extra costs, longer waiting times, and tightening truck capacity even more, Maersk added.
The carrier has ed an inland hub at Tan Cang Cai Cui in the Mekong Delta near Ho Chi Minh City to allow shippers to pick up and return containers closer to factories.
That comes as Vung Tau and Ho Chi Minh City ports are being recommed as better natives than ports in adjacent countries, including Cambodia’s Sihanoukville port.
A DHL spokesman said at the moment, Vietnam airports, seaports, and customs operations were fully operational, but DHL Global Forwarding was working with local authorities to minimize disruption from measures implemented to curb infections.
“For example, for both cross-border and trucking services, vehicles have to be sterilized and staff equipped with the necessary PPE to take on the sterilization of the trucks,” the spokesman told JOC.com. “In factories in impacted areas, additional COVID-19 tests are also required.”
China’s digital yuan could pose challenges to the U.S. dollar China’s yuan is leading the digital currency movement — the U.S. is still...
China is beating the U.S. when it comes to innovation in online money, posing challenges to the U.S. dollar’s status as the de facto monetary reserve. Nearly 80 countries — including China and the U.S. — are in the process of developing a CBDC, or Central Bank Digital Currency. It’s a form of money that’s regulated but exists entirely online. China has already launched its digital yuan to more than a million Chinese citizens, while the U.S. is still largely focused on research.
The two groups tasked with this research in the U.S., MIT’s Digital Currency Initiative and the Federal Reserve Bank of Boston, are parsing out what a digital currency might look like for Americans. Privacy is a major concern, so researchers and analysts are observing China’s digital yuan rollout.
“I think that if there is a digital dollar, privacy is going to be a very, very important part of that,” said Neha Narula, director of the Digital Currency Initiative at the MIT Media Lab. “The United States is pretty different than China.”
Another concern is access. According to the Pew Research Center, 7% of Americans say they don’t use the internet. For Black Americans, that rises to 9%, and for Americans over the age of 65, that rises to 25%. Americans with a disability are about three times as likely as those without a disability to say they never go online. That is part of what MIT is researching.
“Most of the work that we’re doing assumes that CBDC will coexist with physical cash and that users will still be able to use physical cash if they want to,” Narula said.
The idea of a CBDC in the U.S. is aimed, in part, at making sure the dollar stays the monetary leader in the world economy.
“The United States should not rest on its current leadership in this area. It should push ahead and develop a clear strategy for how to remain very strong and take advantage of the strength of the dollar,” said Darrell Duffie, professor of finance at Stanford University’s Graduate School of Business.
Others see the digital yuan as insidious.
“The digital yuan is the largest threat to the West that we’ve faced in the last 30, 40 years. It allows China to get their claws into everyone in the West and allows them to export their digital authoritarianism,” said Kyle Bass of Hayman Capital Management.
Watch CNBC’s deep dive video into CDBCs to learn more.