Express delivery service providers try to get faster

VietNamNet Bridge – The four big guys in the world, namely German DHL, Dutch TNT, the US FedEx and UPS, have step by step conquered the Vietnamese freight, forwarding and express delivery market.



Express delivery service, DHL Express, FedEx, Hop Nhat, ViettelPost, VNPost


“The fast eat men…”

First arriving in Vietnam as the foreign partners in the joint ventures with Vietnamese enterprises, the big guys immediately showed their power in the Vietnamese market. After defeating the domestic rivals, the foreign big guys have left the joint ventures to become 100 percent foreign owned enterprises.

DHL Express is leading the market with 40 percent of the market share. The company has poured some $25 million into Vietnam over the last 7-8 years, according to Jerry Hsu, Managing Director of DHL Express Asia Pacific.

The biggest advantage of DHL Express is that it joined the market in 1988 when Vietnam began opening its market, and then teamed up with the Vietnam Post and Telecommunication Corporation (VNPT) to set up a join venture in 2007, before Vietnam joined WTO.

VNPT was the first door which DHL Express went through to penetrate more deeply into the Vietnamese market.

Setting foot in Vietnam later, in 1994, but UPS also quickly set up a joint venture with VNPost Express – UPS Vietnam JSC, in which the US partner contributed 51 percent of capital.

While DHL announced the two-digit growth rate for 2012, a difficult year of the national economy, UPS has also reported the 20 percent increase in volume of transported goods.

FedEx also began penetrating the Vietnamese market by joining forces with a private company. It is now the second biggest service provider in Vietnam in terms of international express delivery, with 35 percent of market share.

Considering the expansion of services in Vietnam is an important part of its business strategy, FedEx has used the Airbus A310 to provide services, which allows to increase the productivity by five times to 30 tons per day.

TNT, though being one year later than FedEx, also quickly found a Vietnamese partner – Vietrans – to form up a joint venture TNT Vietrans where it has poured euro7 million within four years.

“…the slow are eaten”

Vietnamese express delivery firms such as Hop Nhat, ViettelPost and VNPost still have been living well in the market where there are the four foreign giants. The firms mostly deliver documents, mails, cargos in small quantities.

However, analysts have warned that the positions of Vietnamese firms are in the danger amid the expansion by foreign groups.

According to Luong Ngoc Hai, General Director of ViettelPost, some foreign firms came to Vietnam in the second half of 2012 and early 2013 to learn about the domestic market. However, Hai still thinks that there would be big changes in the market.

However, things would be quite different once the global express companies, which are keen on international delivery services, also eye the domestic delivery services and jump to the field.

If so, as Hai admitted, the competition in the market would be very stiff.

The managers of VIetnamPost and ViettelPost both said that though they know it is more profitable to provide international services than domestic services, they still cannot obtain the pieces of the cake.

The biggest disadvantage of Vietnamese postal companies is that it relies heavily on the four big guys with the global networks, including TNT, UPS, DHL and FedEx, when trying to reach to the world market.

DNSG

Express delivery service, DHL Express, FedEx, Hop Nhat, ViettelPost, VNPost
 
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