FedEx launches flights to capacity-starved Hanoi

FedEx has added Hanoi to its freighter network with the launch of four weekly flights to the Vietnamese capital. Shippers have been scrambling for lift out of Vietnam, faced with rapid economic growth that outstripped the rise in air freight capacity.

According to FedEx, the new flights improve transit times to a number of markets, including China, by one business day. The new service brings the number of FedEx flights to Vietnam to 10 per week. Since 2008, the integrator has operated A310 freighters into Ho Chi Minh City six days a week.

David Cunningham, president of FedEx Express Asia-Pacific, said that Vietnam has shown strong growth in 2010, with export turnover in the first nine months rising by 23.2 percent year-on-year.

The rapid growth has put a strain on capacity, especially on the air cargo side, where demand has been rising even faster as a result of a shift in output, as electronics assume a larger share of Vietnam's export industry. According to economic research and forecasting firm IMA Asia, exports of computers and electronics surged 40.8 percent in the first four months of this year, whereas textiles/garments and footwear rose by 18.3 and 5.1 percent respectively.

"We are seeing more electronics and high-value stuff being produced in Vietnam. These exporters are looking for more direct lift from there. They don't want to truck their cargo to another gateway," said Madhav Thapar, senior vice-president of air freight for the South Asia-Pacific region at DHL Global Forwarding.

Forwarders and express operators have boosted their footprint in Vietnam in response to the growth curve. In the spring, DHL Express opened a US$5 million Ho Chi Minh gateway at Tan Son Nhat airport's new cargo express service airside facility. During the summer, Agility relocated its Ho Chi Minh City location to a larger office close to the airport, which will serve as the company's headquarters for Vietnam and Indochina.

Airlines have been more hesitant to step up their presence. "Capacity is still constrained because growth has been quite strong," Thapar noted. He expects the lift situation to improve in the coming year as airlines gain confidence in the market's resurgence. Airlines have shown stronger interest in Vietnam, he finds. However, imbalance in flows presents a challenge to them. "It's still very much a one-way market," he said.

While it is growing its air cargo traffic out of Vietnam, DHL Global Forwarding is also taking strides to ramp up its surface capabilities. "We put a lot of focus on developing cross-border trucking," Thapar said.
(source:www.cargonewsasia.com)