Vietnam to host two Air Logistics Hubs of Southeast Asia stature

CEO Tran Tuan Anh discusses at the Air Freight Logistics Vietnam Conference 2019

Despite a slump in the global market, Vietnam’s international air transport gained its impressive growth touching 11 per cent through the first seven months of this year. The domestic air transport market alone jumped 134 per cent in 2018 compared to 2017.

In addition, the GDP growth of more than 7 per cent in 2018 has fuelled the demand on the consumption of goods and air transport. Vietnam has participated more in free trade agreements (FTA’s), particularly new-generation FTA’s like the CPTPP and the EVFTA, which contributes to boosting the country’s exports.

Simultaneously, as a regional leading producer and exporter in textile and clothing, footwear, wooden furniture, electronics, seafood, and agricultural produce, Vietnam is well-positioned to attract leading suppliers in the region that will leverage the country as an ideal transit location, providing enormous opportunities to grow the country into a major air logistics hub in Southeast Asia.

How has US-China trade tensions affected Vietnam’s efforts to grow into a major regional air logistics hub?

Vietnam has become the top choice for global manufacturers and businesses on account of the implications from the US-China trade tensions. In fact, global corporations including Google, Nintendo, Lenovo, Sharp, or TCL Brook Sport are all mulling over the production launching and expansion into Vietnam.

This has cultivated the process of establishing air logistics hubs throughout the country. Our task now is to find a way to boost Vietnam’s appeal in the eyes of foreign investors. The question is how will other investors continue to choose us over Thailand or Singapore.

According to you, what can be done to convince clients to choose Vietnam instead of other countries in the region?

We are competing while also learning from the experiences of our regional rivals, while simultaneously strengthening alliances with big logistics markets in Asia, such as Hong Kong, to improve fields where we still have a limited capacity such as infrastructure and technology.

As Vietnam is establishing itself as a preferred choice for many investors, Hong Kong also wants to increase cooperation with Vietnam. The top factor to become a major logistics hub relates to customer data. We have to put customers at the focus and supply them with optimal solutions, thus boosting competitive advantages.

How do you anticipate the number of air logistics hubs in Vietnam? What challenges does Vietnam need to overcome in order to grow into a regional air logistics hub?

According to my evaluation and based on specific statistics and potential, Vietnam will host two air logistics hubs, the first in Hanoi and the second in Ho Chi Minh City.

The on-going shift of global supply chains and other diverse advantages have entailed many opportunities, but at the same time, there are many challenges that need to be solved immediately.

My greatest concern is that the local infrastructure system still lags behind the current rapid market expansion and this could not be settled in the coming years. For instance, Tan Son Nhat Airport and existing warehouses do not meet the growing demand on air transport in Ho Chi Minh City.

These challenges require both government and businesses to work on proper development strategies and count on contributions from leading logistics companies. One of our prime targets is enabling the deeper engagement of local logistics firms in the global logistics value chain.

What strategy has ITL chosen to effectively tap into future development opportunities and support local firms to approach regional and world logistics value chains?

In many years, ITL has been constantly improving technologies and enhancing cooperation with leading performers in the logistics industry in order to bolster efficiency, optimize on resources, and reduce logistics costs, thus boosting competitiveness.

We are ready to support local companies to develop their business to international markets with integrated logistics services, including air, sea, rail, ground, multimodal transportation and systems warehousing, customs clearance, and professional staffing of industry experts, on the basis of advanced technology and understanding of the domestic market culture.

ITL has succeeded in building a solid foundation of comprehensive logistics solutions and transport infrastructure in the value chain, especially in air transport logistics. Currently, our group is leading aviation services in Indochina, representing more than 22 airlines, and transporting goods on more than 300 flights every week.

Our cooperation has also promoted the joint venture and alliance with many logistics multinationals such as Keppel Telecommunication & Transportation, Ceva Logistics, Mitsubishi Logistics, and UPS Supply Chain, among others, providing logistics solutions and services to global customers.