Logistics is faster, cheaper with the appearance of domestic air freight companies: Johnathan Hanh Nguyen, Chairman of IPPG:

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Mr. Johnathan Hanh Nguyen shared hot information about freight carrier IPP Air Cargo and Bellazio Logistics JSC. Photo: CL

Mr. Johnathan Hanh Nguyen said, Bellazio Logistics JSC has shareholders including IPPG, Sasco, Vietnam Post, Viettel Post, Bellazio Trading Online and IPP Air Cargo. The main business lines of the company include express delivery; domestic and international freight transportation; air and sea freight; investment and management of warehouses.

This company will contribute to reducing import and export costs for businesses.

According to Mr. Johnathan Hanh Nguyen, logistics costs in Vietnam are much higher than the common rate in the world.

According to the World Bank's 2020 data, Vietnam's logistics costs accounted for about 20-25% of GDP.

Meanwhile in Thailand it was only 19%, Malaysia 13%, Singapore 8% and the US only 7.7%. High logistics costs have increased the cost of Vietnamese goods, causing it to lose its competitive advantage compared to other countries in Asia. Therefore, seeking solutions to reduce this cost is an urgent requirement for the current period to improve the competitiveness of Vietnamese goods, said Mr. Johnathan Hanh Nguyen.

He also said Vietnam's air freight market has a growth rate of 15.3%/year, but so far airlines still only carry cargo on passenger flights. There are no airlines providing specialized aircraft to carry goods.

According to statistics of the Civil Aviation Authority of Vietnam, there are currently 29 foreign airlines operating and transporting goods from 16 countries to Vietnam. Due to a sharp decrease in the number of passenger flights, while the demand for international transportation increased, international freight rates have skyrocketed 3-4 times, even 5-6 times compared to before the pandemic. Previously, the freight rate from Asia to the United States was about US$1-1.8 /kg, but now it has risen to US$17-18 /kg.

“The increase by 10 times is unbearable for businesses. While logistics costs account for 20-25%, it erodes the profits of exporters," said Mr. Johnathan Hanh Nguyen.

He added currently airlines only focus on bringing goods to Noi Bai and Tan Son Nhat airports, so their goods are concentrated at these ports. The appearance of IPP Air Cargo will create a breakthrough in logistics by bringing goods from abroad into Vietnam, and IPP Air Cargo will deliver goods to all 22 airports in Vietnam. Furthermore, Viettel Post, Vietnam Post and Sasco are strategic partners with the support of logistics companies to bring goods to all provinces and cities, helping e-commerce to spread throughout Vietnam.

“All airlines in the world have commercial rights to carry goods, but under the aviation agreement, we will be allowed to have the same number of flights with them, so the number of flights will double, helping businesses not have to suffer from goods congestion. IPP Air Cargo will create a balance between foreign and Vietnamese airlines,” Mr. Johnathan Hanh Nguyen said.

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On March 29, the Ministry of Transport submitted to the Prime Minister for consideration and granting a business license for air cargo transportation for IPP Air Cargo. Mr. Johnathan Hanh Nguyen hopes that this month, IPP Air Cargo will be launched, contributing to reducing import-export costs for domestic enterprises.