By Covid in Vietnam, 50% of the world production of NIKE is in danger
Chang Shin Vietnam Co. and Pou Chen Corp., manufacturers of NIKE footwear in Vietnam and responsible for 50% of the brand's total production, reported the temporary closure of their establishments, due to the worsening of the coronavirus pandemic. Its directors have not yet reported on the duration of the measure.
According to a report by specialized international consultancy firm S P Global Market Intelligence, NIKE is at risk of running out of sneakers made in Vietnam as the Covid crisis worsens around the world.
In the second quarter of 2021, Vietnam accounted for 49% of US maritime imports linked to NIKE.
The disruption is hitting the supply chain, just as retail is gearing up for a major back-to-school season. Businesses may have already received and stored merchandise on the shelves during the fall, but now is when many shoppers place orders for the holiday period.
Another factor that has disturbed the normal supply of products in recent months is the shortage of cargo containers and the lack of space in ports, which makes shipments difficult and causes delays, at a time of recovery in consumption.
The director of a shipping company exemplified that his company last June had shipping cycles of 80 days, when previously they were only 40 days.
NIKE CFO Matt Friend said the company was forecasting supply chain delays and higher logistics costs that will persist through much of 2022. "Consumer demand has in many cases outpaced supply", he said.
"That means, it is very likely that many shoppers will find limited options, or see some totally out of stock items, when they go to stores or try to buy online in the coming months".
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