Export growth drives logistics sector

Vietnam’s logistics sector allures big German firms

DHL, the world’s leading cross-border express services provider, last week announced the latest enhancement to its Asia air network of a new DHL intra-Asia flight, connecting Bangkok, Hanoi and Hong Kong five times per week.

Operated by K-Mile Air of Thailand, a partner of DHL, the inaugural flight of this service took place on November 3. It uses a newly-converted Boeing B737-400SF freighter with a gross payload of 21 tonnes.

An industry first, this new route shortens the transit time for shipments on the DHL intra-Asia network to and from Hanoi to just one day, allowing businesses and consumers to enjoy the earliest arrival time and latest departure time to and from the city. Its introduction also eases congestion faced by DHL’s bustling hub in Hong Kong.

“The new intra-Asia flight will enhance our capability to provide a better service for a great number of customers in the north of Vietnam,” said George Berczely, general director of DHL-VNPT Express – a joint venture between DHL and Vietnam’s VNPT.

“We will continue investing to maintain our leading position in the Vietnam international express market. This new flight, combined with the expansion of our direct pick-up and delivery capabilities to the Thai Binh-Nam Dinh area, allow us to better support the growth potential we see in the north of the country.”

Having entered the Vietnamese logistics market in 1988, DHL is now the biggest player in Vietnam’s express market. In September, the company also announced its biggest investment in the market to date – the launch of a $10 million 2,500 square metre service centre in Ho Chi Minh City, and the biggest of its kind in the country.

As the demand for logistics services in Vietnam increases sharply, DHL has seen other logistics firms from Germany join the budding market.

DB Schenker, another German logistics provider, has also expanded its business in Vietnam to respond the growing demand. Last year, the company moved its Hanoi branch office to a bigger and better location. In addition, it also inaugurated a new corporate office in Ho Chi Minh City to expand its network in the country.

Karl Gross, another German logistics firm headquartered in Bremen, last year set up a subsidiary in Vietnam called Karl Gross Logistics Vietnam Company – after opening a representative office in Ho Chi Minh City in 2008.

“With such strong growth in export logistics, firms here have a great opportunity to operate in the Vietnamese market,” said Berczely. He cited the inflow of international manufacturing firms from China to Vietnam because of cheap labour costs and political stability. “Of course, the more foreign investment increases in Vietnam, the more opportunities open up for logistics companies.”

According to figures released by the General Statistics Office (GOS), Vietnam achieved a trade surplus of $1 billion in the first quarter, $1.3 billion in the first half, and $1.7 billion in the first ten months.

This trade surplus was led by foreign companies whose factories in Vietnam chiefly manufacture products for export. In the year to late October, trade surplus created by foreign companies stood at $13.8 billion.

GSO, in its report, explained that this strong growth came from the recent boom in the export of garments and textiles, as well as information and communication technology (ICT) equipment.

With increasing investment from global electronic companies over recent years, including Samsung, LG, Microsoft, Nokia, and Wintek, export turnover from ICT equipment reached $19.2 billion, making it the top-ranking export product in Vietnam.

Meanwhile, the increasing orders and investments from global garments and textiles companies are making Vietnam a major hub of manufacturing for this sector. Export turnover for garments and textiles in the first ten months of this year was $17.6 billion, up 19.3 per cent year-on-year. Meanwhile, the export of footwear products reached $8.2 billion, up 23.1 per cent from one year earlier.