|Russel Reed, managing director of UPS Thailand and UPS Vietnam |
Why did the company decide to go ahead with the launch of the new Browntail flights, given the current global difficulties?
There are several reasons, the most important being our desire to support the country’s growth story. Vietnam is a leading growth-market in Asia and despite the hardships, it is anticipated to see positive GDP growth of $340 billion by the end of 2020.
This growth has been sustained for several decades but is now accelerating for a number of reasons. First of all, there is more foreign investment coming into the country, largely from Japan, South Korea, and China. Then there is greater market access through the recent free trade agreements, complemented by the shifts in supply chain and more environmentally minded production trends.
The opportunities for businesses in Vietnam are enormous and our new Browntail flights to Hanoi and Ho Chi Minh City will serve as a foundation to support international growth as well as enhance the ability of Vietnamese businesses to take advantage of the global marketplace.
The new flight plans will serve to increase the competitiveness of Vietnamese SMEs by fostering stronger trade lanes through flight operations running five days a week. These flights are going to speed up transit time and provide more capacity to the market, both of which will ultimately help Vietnamese businesses thrive in the international marketplace.
Reliable service, speed, and capacity are incredibly important for Vietnamese businesses and now more than ever, it is important for them to partner with a company like UPS. We provide a stable, smart, global logistics network which grants market access to over 220 countries worldwide, and a strong brand that represents integrity and confidence to buyers, sellers, consumers, and businesses around the world.
Just in the last quarter, UPS introduced over 600 extra flights that supported the demand coming from Asia. However, I think it is a great tell of our confidence in Vietnam that so far this year, Hanoi and Ho Chi Minh City were the only cities where we introduced new Browntail flight segments and opened up a gateway operation.
What role does Vietnam play in UPS’ strategy?
The country’s dynamic workforce, market liberalisation, and strategic location in ASEAN will ensure its position as an important manufacturing base in the global supply chain now, and long into the future.
Just in the past two years, Vietnam has concluded two major trade agreements, the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The latter already had a significant positive impact, with an additional $3.9 billion contributed to Vietnam’s trade surplus, while the EVFTA is projected to bring about 4.6 per cent GDP growth and around 43 per cent export growth to the EU by 2025.
At the same time, some of the drivers of the supply chain transformation are key industry segments like high-tech, industry, automotive, and retail – segments where Vietnam was strong in the past and is getting much stronger now.
Combining all that, it is easy to see Vietnam’s importance in the global economy, which is why it is such a strategic fit for UPS. Recently, UPS’ Supply Chain Solutions (SCS) unit in Vietnam announced its transition to wholly-owned operations, with the commitment to helping customers seize new growth opportunities with UPS’ innovative end-to-end supply chain solutions. We have been in this market since 1994 and are continually looking to support our customers, many of whom are in industry segments where Vietnam is starting to emerge.
A significant portion of businesses in Vietnam are of a small and medium size – and so are many of UPS’ local clients and partners. What can UPS offer these SMEs?
In Vietnam, like many parts of Asia, we work with domestic partners to offer the services our customers are looking for. That is why we are so excited about the introduction of the Browntail flights as they are enhancing the ability of Vietnamese businesses to compete.
Right now, the growth opportunities of SMEs in Vietnam are enormous. E-commerce is a great example as it grew 20-30 per cent during the pandemic. This is a great opportunity for Vietnamese businesses to expand and start selling their products overseas. UPS can provide the expertise, the capabilities, everything they need to start and succeed in the international marketplace.
This is especially important as the growth in Vietnam’s access to global markets far outpaced the development of its logistics industry: export-import companies and SMEs setting their sights on new horizons are held back by limited air freight links, with just four of the nation’s 22 airports having separate cargo terminals. At the same time, many are still navigating customs regulations, making even routine tasks an ordeal. This sets up tremendous demand for a trusted one-stop logistics partner, which UPS is in a perfect position to meet.
Our newest Browntail flights are cutting transit times, while our domestic and global network offers enhanced coverage and extended pick-up cut-off times to increase convenience.
A good example of how businesses can stand to benefit from UPS’ solutions would be Spartronics, a Ho Chi Minh City-based client that provides a very wide range of services from circuit board assembly to supply chain management and engineering. Spartronics has been using UPS' solutions to stay on top of its sprawling operations covering several production points and geographies.
They leverage E-invoicing to make payments processing seamless and transparent, and UPS’ Import Control and Quantum View Manage solutions allow Spartronics to track its shipping and logistics activities to ensure it can deliver on end-to-end product development in an efficient and timely manner.
UPS has been at the forefront of the digitalisation of logistics across the globe. Which technologies are you using for your operations in Vietnam?
UPS is an innovation-driven company and we constantly look at how we can optimise our network for optimum efficiency and minimal environmental footprint, be it by optimising routes or using hybrid or electric vehicles.
I am confident that businesses will find distinct value in our broad portfolio of services. In Vietnam, as with any other location that UPS serves, businesses can leverage our smart, global logistics network and web-based solutions to power their business ahead. We have a broad range of solutions for businesses of any size and shipping need. For example, small volume or one-off shippers can use web-based solutions on our ups.com website to send, track, and complete customs documentation without the need for additional software installation or IT support. For larger volumes or regular shipments across multiple locations, they can use UPS CampusShip or WorldShip software.
One solution that I believe would be particularly useful for SMEs in Vietnam is My Choice, which allows companies to control their inbound deliveries. That gives them a lot of flexibility to change the routing of their shipment based on time, date, or location. Coupled with E-Fulfillment, SMEs can manage multiple sales channels and all inventory, with a broad range of features such as automatic repricing and order routing.
All of these and much more are available for our customers in Vietnam, offering them competitive speed, quality, and convenience.
Given how connected the global marketplace is, an investment by UPS anywhere in the world, whether in technology, services, capabilities, assets – is really an investment in Vietnam.