Air freight gains serious altitude in Vietnam: Nikkei hinh anh 1(Photo: Vietnamplus)

Nikkei has just published a report on the analysis of strong recovery in the air freight industry in Vietnam post pandemic.

In 2022, air freight transport in Vietnam is expected to reach more than 1.52 million tons, up 17% year-on-year. These numbers are so high that they eclipse the average growth rate over the past 30 years (15%). The increase comes in the context of rising demand for domestic and foreign freight as Vietnam consolidates its position in global supply chains.

The Nikkei quoted a senior executive of a large foreign logistics company with a base in the capital Hanoi as saying: "March was a record month for the volume of goods handled." "Even as the COVID-19 epidemic occurs, you can still feel Vietnam’s momentum."

In that context, major operators such as Germany's DHL Express and Japan's ANA are also increasingly interested in the Vietnamese market. DHL is promoting regular freight services between Vietnam and the US.

Once a week, a Boeing 777 freighter will fly from Sydney, Australia to Ho Chi Minh City, before arriving at Chubu Airport in central Japan and then Ohio in the US. DHL's freight capacity between Vietnam and the US will increase by 27% compared to the previous months to reach more than 940 tons per week.

Meanwhile, ANA Cargo, a subsidiary of Japan's ANA Holdings, started operating daily air freight services on the Vietnam route and Narita airport in March.

Not only DHL and ANA Cargo, Korean Air of the Republic of Korea, China Airlines and EVA Air of Taiwan (China), also have cargo flights to and from Vietnam. Korean Air ships smartphones made in the country by Samsung Electronics to export markets.

However, increased demand is pushing up the cost of exporting by air. Insiders say air freight rates are still 2 to 4 times higher than pre-pandemic times.

Therefore, IMEX Pan Pacific Group, one of the largest corporations in Vietnam, is looking to break into this business through the establishment of a subsidiary IPP Air Cargo. The company is expected to go into operation later this month as Vietnam's first company specializing in air transport.

IPP Air Cargo plans to launch a fleet of five aircraft, before doubling the number over the next five years. Initially, IPP Air Cargo will operate on routes between local airports and the two largest international airports in Vietnam, one in Hanoi and one in Ho Chi Minh City.

Johnathan Hanh Nguyen, President of IPP Air Cargo, said: “If we don't enter the market, the freight rates will remain high, and that’s a serious cost for exporters." The businessman also expressed his intention to focus on reducing freight rates.

Increased air freight capacity is likely to help ease the pressure on manufacturers in Vietnam, who sometimes struggle to find cargo transport. The trend should help the economy develop, especially in the context Vietnam is seeing strong recovery post pandemic. The country’s export activities are flying as more free trade agreements Vietnam come into force, creating opportunities for its businesses.

A director of a company specializing in manufacturing machine parts in the south was quoted as saying: "In 2021, there were times when we could not find a business that could ship export goods even though were could pay the rates, which were astronomically high"./.