Ho Chi Minh City bizs adjust production plans, seek new supply chains

Businesses based in Vietnam’s Ho Chi Minh City are being forced to adjust production plans, diversify markets and seek new supply chains due to disruptions in global shipping routes and soaring logistics costs arising out of geopolitical tensions in the Middle East.

Shipping schedules have been frequently adjusted recently at Saigon Port’s Hiep Phuoc terminal, reducing operational stability.

Ho Chi Minh City businesses are adjusting production plans, diversifying markets and seeking new supply chains due to disruptions in shipping routes and soaring logistics costs arising out of the Iran war.
Shipping schedules have been frequently adjusted at Saigon Port’s Hiep Phuoc terminal, reducing operational stability.
Cargo turnover has slowed as incoming and outgoing shipments have become uneven.

Cargo turnover has slowed as incoming and outgoing shipments have become uneven, affecting businesses’ cash flow, according to a report by a domestic media outlet.

Vessel calls drop has also reduced workload of port operators, shipping lines, freight forwarders and logistics companies. Port workers engaged in container handling and operations have been directly hit.

Due to a diversified customer base and a significant share of intra-Asia cargo, the port’s throughput remains within controllable levels, said Nguyen Anh Hao, acting director of Hiep Phuoc terminal.

Pham Van Xo, chairman of the city’s Import-Export Association, said longer shipping routes had reduced vessel availability while demand for cargo transport remained high. This resulted in shortages of container space and rising fuel costs, insurance premia and security surcharges.

The situation has hit cash flow of businesses and created pressure to maintain payroll and labour stability.

If the disruptions persist, apart from the logistics sector, major export industries like garments, footwear, wood products, agriculture and seafood may face ripple effects, experts cautioned.

Falling orders or rising costs could force companies to scale down production, directly affecting workers’ income and employment.

Despite the challenges, businesses in Ho Chi Minh City are seeking solutions like diversifying shipping routes, expanding markets and strengthening negotiations with partners.

Fibre2Fashion News Desk (DS)