Vietnam fuels cargo growth
With Vietnam’s economic growth forecast to hit 6 - 6.2 per cent this year, driven by a slew of foreign direct investment – primarily from high-tech companies, retail, garments and foot-wear – and a robust rise in personal consumption, the country looks set to solidify its position as a significant air cargo growth market. But the nature of its north/south production diversification, the need for more infrastructure, a shortage of freighter capacity and no direct Vietnam-US services are among the challenges that need to be overcome. By Donald Urquhart.
July 31, 2015
In an air cargo environment where freighters continue to idle in many locations around the world and airline cargo bosses lose sleep worrying about how to fill those still operating, Vietnam offers a studied contrast. It is – at least for now – a market in want of more maindeck capacity.
One of the rising stars of the global economy, Vietnam was one of Asia’s fastest growing economies in 2014, driven largely by manufacturing and aided by rising personal consumption. In 2014 Vietnam’s GDP was US$171.4 billion, up from only $33.6 billion just over a decade earlier. And with the World Bank recently revising the country’s growth forecast upwards to 6.2 per cent for 2015 as a whole, Vietnam looks set to continue its economic ascendency.
Currently the world’s fourth largest textile exporter it is expected within the next two years, to overtake Singapore to become the world’s fifth largest electronics exporter after leap-frogging the Philippines and Thailand. All of this has been a boon for the air cargo sector, which is seeing tremendous growth alongside the country’s rocketing economy.
According to Do Xuan Quang, CEO of VietJet Air Cargo, total air cargo tonnage uplifted in 2014 amounted to 741,000 tonnes, up a substantial 18.5 per cent over 2013. Of this, international cargo comprised 587,000 tonnes, up 19.6 per cent year-on-year, said Do speaking at the Air Freight Logistics (AFL) Vietnam 2015 event earlier this year in Ho Chi Minh City (HCMC).