68 pct of garment, footwear firms suffer cancellations, penalties

By Anh Minh October 9, 2021 | 11:13 pm PT

Staff work in a HCMC garment factory pre-social distancing. Photo by VnExpress/Quynh Tran.

Over 68 percent of garment and footwear enterprises in Vietnam have been penalized by their foreign customers for late delivery, some with cancellation and compensation demands.

A survey has found more than 12 percent of local firms having foreign customers cancel and demand compensation for breach of contract, while some 21 percent said they’ve had orders canceled without other demands.

The survey, carried out in September by Vitas, Lefaso and a working group on public-private partnership, found nearly half of the respondent firms saying they had delivered goods late because of prolonged social distancing.

It took goods 80 days, instead of the previous 40 days, to be shipped to the U.S. from Asia, they noted.

As a result, some foreign customers shifted their orders to other countries, and such shifts can continue over the next five months, said Do Quynh Chi with the Research Center for Employment Relations.However, the shift was temporary and related to serving orders and meeting shopping demand later this year in Europe and the U.S, she added.

Garment and textile exports fell 9 percent month-on-month in September to $3 billion. The figure for the year-to-date was $29 billion. Vietnam’s footwear exports plunged 44.2 percent year-on-year to about $700 million in September, according to the Vietnam Leather, Footwear and Handbag Association (Lefaso).