UPS Supply Chain Solutions (SCS) is transitioning to wholly owned operations in Vietnam, leasing over 15,000 square meters of storage in the ports of Cat Lai in Ho Chi Minh City (HCMC) and the northern city of Hai Phong.
UPS said the move will allow it greater control over its operations and service standards. This in turn will give local businesses more direct access to UPS’s air cargo network which connects more than 14,000 origins and destinations and to a well-established shipping infrastructure which offers service on over 2,300 direct lanes for cargo.
The investment will also create 45 new jobs in HCMC and Hai Phong, it said.
Sebastian Chan, UPS Asia Pacific president for global freight forwarding and global logistics and distribution, said that while the pandemic and lockdowns have caused growth projections for Vietnam to be revised downwards, “it remains one of the region’s few shining bright spots, in addition to China, in recording positive growth.”
He noted that by the end of 2019, the country had seen an almost unbroken run as one of the fastest growing economies in Southeast Asia for three decades, thanks to reform policies in the 1980s that transformed the agricultural country into a manufacturing powerhouse.
Current 2020 GDP projections of the International Monetary Fund for the country are 2.7%. The country also recently sealed a momentous trade deal with the European Union that will eventually remove 99% of tariffs between both markets, affirming Vietnam’s continued strategic position in regional and global supply chains.
These developments, combined with a largely successful COVID-19 containment strategy, convinced UPS SCS to ramp up its presence in the country. UPS also cited a McKinsey survey in May 2020 which projects that nearly a quarter of fashion-sourcing executives expect an increase in production in Vietnam, more than other locations in Asia.
UPS SCS currently offers international air and ocean freight services with port-to-port and door-to-door options, for both palletized and loose freight shipments across the world. It joins in its transition the UPS Small Package business in Vietnam, which has been wholly owned since 2013.
The company most recently introduced new flights to Ho Chi Minh City and Hanoi.
Photo from UPS