Vietnam benefits from “China plus one” strategy

CargoNews Asia, Apr 20, 2009. In late March, DB Schenker opened a $ 5.5 million logistics centre in Song Than Industrial Park near Ho Chi Minh City. A joint venture with local partner Gemadept Corporation.

Aimed at manufacturers and OEMs (original equipment manufacturers) in the high-tech zones located in Binh Duong Province, the 10,000 sq m facility is intended to function as a national as well as a regional and intercontinental hub for the multinational logistics firm.

“A lot of contact manufacturers have moved to Vietnam,” said the CEO for the Asia-Pacific region at DB Schenker. “The country has moved beyond its early cargo base and increasingly takes care of electronics manufacturing, a trend that has been stoked further by many companies’ ‘China plus one’ strategy,’’ he added.

TNT is eyeing Vietnam as a candidate for an expansion of its freighter activities later in the year. Vietnam has weathered the downturn better than a number of other markets, although it has not escaped unscathed. Last August, TNT opened a 13,000 sq ft facility near Hanoi. Four times larger than the integrator’s previous terminal in the area, it is intended to handle a large chunk of the integrator’s volume to and from Vietnam and to act as a gateway for the company’s road links into China.

Japan’s Yusen Air and Sea Service last year, which opened an office and a 64,000 sq ft warehouse near Hanoi.

US-based IJS Global, came into the market last November through a joint venture with a local partner that has branches in Hanoi and Ho Chi Minh City.

Cathay Pacific mounted a weekly freighter operation between its Hong Kong base and Hanoi last November.

Last October, Vietnam signed an open skies aviation bilateral with the US which also gives designated airlines the right to carry cargo to and from third countries. Capacity of US operators has been on the rise.

FedEx boosted its lift four-fold last year when it upgraded to A310F aircraft to serve Vietnam.

Delta will start daily B747-400 passenger flights from Ho Chi Minh City via Tokyo to the U.S. June 1.

Logistics costs make up 20-25 percent of Vietnam’s GDP.

The high cost of logistics in Vietnam is an impediment to the country’s economic development.

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