On the back of trade tension between the US and China that appears to be in a stalemate position because of stalled talks, Vietnam is picking up the export spoils its bigger Asian neighbour is missing out on.
Since President Donald Trump proceeded to impose punishing tariffs on America’s biggest trade partner over a year ago, US imports from Vietnam have surged 36.7%.
Inbound freight from ports like Ho Chi Minh City into countries like South Africa is also on the increase, a development that was recently confirmed by neutral consolidator CFR’s announcement that it was introducing another route to Hai Phong, the harbour city closest to Vietnam’s capital of Hanoi.
In another development highlighting the Asian nation’s increased performance on the global stage, Ethiopian Airlines this week launched a weekly Boeing 777 service to Bangkok and Hanoi.
The new route includes inbound flights from Vietnam Airlines with potential export exposure to Ethiopia’s African route coverage comprising more than 60 destinations, the continent’s largest aerial network.
But Vietnam’s economic growth, up from 8.2% to 9.3%, mainly from increased output from sectors such as textiles and technology as well as machinery, is showing what can happen if exports overshoot logistical capacity.
Out of necessity Hanoi has had to go ahead with the building of a long-delayed $5.4-billion airport, Long Thanh, which will add five million tons of capacity to Ho Chi Minh’s airfreight throughput.
On the ocean side, the Port of Hai Phong is expected to push throughput to 200 million tons by next year.
For the time being though, the spike in exports from the country’s shores has over-capacitated Vietnam with freight traffic of 80%, a trans-shipment problem that has necessitated the use of smaller ports.
The subsequent logistical linkages it has led to with the Port of Singapore, some freight forwarders have indicated, can add up to a week in transit times.
