November 4, 2019

Flexport opens Vietnam warehouse for firms fleeing China tariffs

Modern facility is one of few in the region to match China's labor and infrastructure, firm says.

By DC Velocity Staff

Freight forwarder and customs broker Flexport International LLC is offering its clients access to warehouse space in Vietnam, moving to expand its global cross-dock network at a time when many companies are exploring options to avoid escalating tariffs on U.S.-China trade, the company said.

Flexport will work in partnership with the Vietnamese firm Indo-Trans Logistics Corporation (ITL Corp.) to provide dedicated space in a state-of-the-art warehouse located in Thu Dau Mot City, just outside of Ho Chi Minh City. This "container freight station" (CFS) is an integral part of Flexport's global network and will serve as a hub for operations in Southeast Asia, San Francisco-based Flexport said in an Oct. 29 blog post.

The ongoing trade war between the U.S. and China has roiled container trading patterns and crimped profit margins in many sectors, but has not yet resulted in a widespread "re-shoring" of U.S. manufacturing operations. Companies point out that it takes far longer to rearrange longstanding supply chain patterns and build new facilities than it takes for unpredictable tariff policies to change with a single Twitter post from the White House.

Flexport says its move will help more businesses diversify their supply chains, since companies are finding that challenges abound in their efforts to explore trading options outside of China. According to Flexport, alternative countries in the region don't yet have the physical infrastructure or the labor market necessary to support manufacturing on the scale that China historically has. Those shortcoming are creating port and road congestion that lead to shipping delays, the company said.

"Flexport's strategically located CFS facility will help customers and suppliers navigate some of Vietnam's biggest infrastructure constraints," Flexport said in a release. "This will prove especially true as many have found moving supply chains to Vietnam to avoid the U.S.-China tariffs easier said than done. At a time when there is infinite global uncertainty and shippers are looking for 'creative solutions' to keep their supply chains fluid, the new CFS facility is critical."

The new Vietnam facility will be operated by ITL, which will ensure that users of the Flexport app have visibility over details such as cargo receipts and cargo-in and cargo-out milestones, the firm said.

Launching access to the warehouse marks Flexport's latest initiative to offer tools for flexible global trade since unveiling a platform in March that allows shippers to lower their freight costs by identifying empty cargo space in ocean containers.

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