Investing Amid The Pandemic: UPS SCS Deepens Commitment in Vietnam

VN 10/13/20

Ho Chi Minh City

UPS Supply Chain Solutions invests for the future in Vietnam by transitioning to wholly-owned operations, creating 45 new jobs in Ho Chi Minh City (HCMC) and Hanoi.

While the global pandemic continues to run its course and many companies are cutting back costs, UPS is looking to do the opposite in Vietnam: Investing for the future in this part of its smart global logistics network. UPS’s Supply Chain Solutions (SCS) unit in Vietnam is announcing its transition to wholly-owned operations, creating 45 new jobs in HCMC and Hanoi, as well as leasing some 15,000 square meters of storage in the ports of  HCMC, and the northern city of Hai Phong.

From a customer standpoint, the introduction of wholly-owned operations in Vietnam allows UPS SCS greater control over its operations and service standards. This in turn gives local businesses more direct access to UPS’s air cargo network which connects more than 14,000 origins and destinations, in addition to well-established shipping infrastructure which offers service on over 2,300 direct lanes for cargo of nearly any size.

“Back in January of this year, when most of the world was not yet aware of the pandemic that lay ahead, Vietnam looked ready to record another sterling year of growth after its economy expanded 7%[1] in 2019,” explained Sebastian Chan, UPS Asia Pacific president for Global Freight Forwarding and Global Logistics and Distribution. “Fast forward to the present day, and while the pandemic and lockdowns had caused growth projections for the country to be revised downwards, it remains one of the region’s few shining bright spots, in addition to China, in recording positive growth.”

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 its Đổi Mới reform policies in the 1980s that transformed the mostly agricultural country into a manufacturing powerhouse.

Current 2020 GDP projections for the country are 2.7%[2] as Vietnam continues to run ahead of its neighbours. 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.

Combined with a decisive Covid-19 containment strategy that has been largely successful, and notwithstanding an emerging second wave, Vietnam is in a prime position for a quick recovery. These are important contributory factors that have shaped UPS SCS’ decision to ramp up its presence in the country and help businesses ride the eventual upturn. According to a McKinsey survey[3] in May 2020, 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. Its multi-modal transportation offering combines ocean and air freight on some of the world’s longest trade routes; and depending on a variety of factors, it can deliver potential savings up to 35% over air freight while providing up to 55% faster transit times than standard ocean service.

“Enhancing our supply chain solutions presence in the country is a very important milestone for us, and demonstrates UPS’s long-term commitment to Vietnam. We have been in the country since 1994 and we are in for the long haul. We look forward to helping our customers seize new growth opportunities with our innovative end-to-end supply chain solutions,” added Sebastian.

UPS SCS’s transition to wholly-owned operations in Vietnam joins its Small Package business, which has been wholly-owned since 2013[4]. The company most recently introduced new flights to Ho Chi Minh City and Hanoi on its iconic “Browntail” aircraft to boost trade opportunities for Vietnam-based businesses.

[1] General Statistics Office of Vietnam: http://vietnamnews.vn/economy/570467/viet-nams-gdp-jumps-702-per-cent-in-2019.html

[2] International Monetary Fund: https://www.imf.org/en/Countries/VNM

[3] Time for change: How to use the crisis to make fashion sourcing more agile and sustainable, McKinsey: https://www.mckinsey.com/industries/retail/our-insights/time-for-change-how-to-use-the-crisis-to-make-fashion-sourcing-more-agile-and-sustainable

[4] https://www.vir.com.vn/ups-becomes-the-first-100-per-cent-foreign-owned-express-company-in-vietnam-19343.html

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