The online shopping industry has created a gold mine of business and job opportunities for international delivery firms shipping to and from Vietnam.
Fedex, UPS and DHL have spent big money on the Vietnam market, and those investments have been increasing rapidly. The rapid increase in imports and exports has also helped logistics companies grow.
A General Department of Customs report shows that import-export turnover in the first eight months of 2017 reached $270.91 billion, an increase of 20.9 percent over the same period last year.
In April 2017, United Parcel Service (UPS) launched two major initiatives to enhance operations: upgrading services in northern, central and southern Vietnam (19 provinces) with extended pick-up times for export shipments by up to 3 hours, and partnering with Indonesian freight airline Cardig Air to improve by 1 day in transit for both export and imports to/from Europe and parts of Asia.
A senior executive of UPS Vietnam said delivery service providers have been put under increasing pressure. They need to provide products and services in larger quantities, with higher quality, and they need to deliver more quickly and offer lower service fees. By shortening shipping times and extending delivery cut-off times, clients will have more time for production, shippers can support more orders.
After Vietnam joined WTO and fully opened its market, foreign express delivery firms flocked to the country. These include DHL from Germany, TNT from the Netherlands, FedEx and UPS from the US.The firms all follow a two-step strategy. At first, they cooperate with Vietnamese companies to set up joint ventures. With strong financial capability and international brands, they can easily conquer the market. Later, they quit the joint venture model and became 100 percent foreign invested enterprises.
TNT joined the Vietnamese market by teaming up with Viettrans to set up a joint venture. Meanwhile, DHL set up a joint venture with VNPT in which it held 51 percent of capital. As the firms showed good business performance, FedEx and UPS also headed for Vietnam. UPS terminated the joint venture model and established UPS Vietnam, a 100 percent foreign owned company.
Experts believed at the time that the presence of international delivery firms in Vietnam will not be a threat to domestic service providers, because the firms would focus on international services, which was not the advantage of Vietnamese enterprises. Vietnamese enterprises mostly targeted the domestic market. However, the recent moves by foreign delivery firms show they are taking strong action to conquer the domestic market.