Hardy Diec, Managing Director of FedEx Express Indochina, predicts greater demand for innovative logistics models to enhance online to offline customer experience and support swift pivot businesses.
What’s the status quo with the logistics industry?
Supply chains have never been more important. More than that, reliability and accuracy in these supply chains have now become even more paramount. During this pandemic, the logistics industry has proven to be vital, whether in delivering critical healthcare shipments including vaccines and medicine, or delivering huge volumes of e-commerce shipments to end consumers.
The pandemic has shifted consumer behavior greatly. The boom in e-commerce will continue to be a powerful engine of the global economy. We’re witnessing how essential supply chains are to business survival, success and growth – they are not just an opportunity to reduce cost.
Businesses are rethinking their supply chains, moving to a “just in case” approach for inventory management to counter unplanned scenarios. Being able to receive products and critical components either by 10:30 a.m. or noon from overseas suppliers means businesses can now improve their competitiveness in the marketplace. In turn, it is driving demand for early-in-the-day delivery of time-sensitive shipments services like FedEx International Priority Express (IPE).
Demand for cross-border e-commerce is expected to grow even post-pandemic in Vietnam and the region. Vietnam’s e-commerce market is forecast to grow by a staggering 300 percent, from $13 billion in 2021 to $39 billion in 2025, with more consumers shopping online. There will be greater demand for innovative logistics models for a seamless online to offline customer experience and to support the swift pivots businesses are taking to sell online, in step with customer demand.
What solutions does FedEx provide, given the above insights?
Firstly, investing in our air network enables us to move quickly to changes in supply chains. When we saw high demand for express air cargo, we were able to add six new flights, starting in August 2021, to enhance connectivity to Europe and the U.S. for customers in Asia Pacific -including Vietnam businesses – adding nearly 2,700 tons in capacity every week.
To cater to different e-commerce shipping needs, we’re offering businesses in Vietnam more options using different modes of transport through our air, sea and road networks. This includes connecting regional and domestic cities through our FedEx Asia Road Network (ARN) – spanning more than 7,000 km – delivering to eight major locations: Hanoi, Guangzhou, Bangkok, Da Nang, Ho Chi Minh City, Penang, Kuala Lumpur and Singapore.
We continue to enhance our regional and global network to enhance connectivity with other competitive markets for our customers to access and we are building solutions that will empower Vietnamese businesses to participate in cross-border trade particularly in the dynamic e-commerce marketplace.
What advice do you have for business owners in Vietnam? What are the opportunities at the moment?
Firstly, take advantage of free-trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam – EU (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement, which can boost investment access and freer trade with these trading partners. These FTAs enable Vietnam businesses to take advantage of reduced tariffs and at the same time attract companies to relocate or expand manufacturing in Vietnam and export to partners. Improved trading access will offer greater opportunities to grow cross-border trade for Vietnam.
E-commerce and digitalization are key opportunities for Vietnam businesses particularly for small and medium-sized enterprises (SMEs) to spur growth. Vietnam has more than 870,000 enterprises, with SMEs accounting for more than 98 percent. While SMEs have been some of the hardest hit during the pandemic, by shifting to online business models and digitalization they have also been the community who stand to benefit the most and stay ahead and boost competitiveness.
A key factor to winning in e-commerce, identified in our FedEx whitepaper “E-commerce Megatrends to watch” is making online shopping a more “connected” experience across platforms. This requires a smooth end-to-end shopping experience from the moment they enter the website or social channels all the way to fulfillment and finally delivery.
To help Vietnam’s businesses, including SMEs, deliver a seamless e-commerce experience from online to offline, we’ve teamed up with more than 20 e-commerce platforms and marketplaces. Enabling customers and e-tailers to select our range of shipping capabilities and easily generate FedEx shipping labels or use additional specialized FedEx features without leaving those e-commerce platforms has become our priority.
Moreover, we’re using digital solutions to make shipping smarter and easier. Our goal in digitization is to give greater control and visibility for businesses to manage e-commerce shipments. For instance, FedEx Delivery Manager International allows e-tailers to offer their customers the freedom to customize their delivery preferences. In addition, we improving easy-to-use online tools like FedEx ship manager, manager, online billing (FedEx Billing Online); FedEx electronic trade documents, helping both e-tailers and consumers save time when preparing shipments and stay competitive.
What is the FedEx vision for the future?
Trade, while being an important driver of Vietnam’s remarkable economic growth over the past two decades, is carbon-intensive – accounting for one-third of the country’s total greenhouse gas emissions. Addressing climate challenge is a very real need today, and an important and collective effort which will impact the future of the country and the health of our communities.
That’s why we’re using our expertise in logistics to build more sustainable transportation solutions. In fact, we’re working our way toward delivering a more sustainable future including our goal of carbon neutral operations by 2040, which will outpace the targets set by the Paris Climate Agreement by a decade. To achieve this ambitious goal, we’re investing US$2 billion into three key areas that matter the most – vehicle electrification, sustainable energy, and carbon sequestration.
At the same time, we’re looking to innovative technologies and Artificial Intelligence, including robotics and unmanned vehicles – to reduce road transportation costs and help tackle traffic congestion in cities. For instance, we’re testing zero-emissions autonomous delivery vehicle in China through collaboration with Neolix and battery powered robotics Roxo™, the SameDay Bot® to explore new ways of delivering to our customers’ door-step more sustainably. We will continue to look at ways to connect the world responsibly and resourcefully.
As one of the world’s largest transportation providers, what role does FedEx play in terms of social responsibility?
Using our network to deliver for good is what we do and who we are. Not only are we connecting trade and moving the world forward every day, but one of our most important roles is delivering critical aid. Since the start of the pandemic, we have transported more than 14,000 Covid-19 humanitarian aid shipments throughout the world including moving vaccines and test kits to support Vietnam’s fight against Covid-19. Most recently, we delivered 76 tons of critical medical aid for Ukrainian refugees to Poland via a FedEx humanitarian relief flight in March.
Fostering future entrepreneurs in Vietnam is important to us because we see small business as a driver to creating new jobs, support their families and contribute to thriving communities. For more than a decade, we’ve been inspiring the next generation of leaders in Vietnam through the FedEx/Junior Achievement International Trade Challenge (FedEx/JA ITC) program. FedEx was founded by an entrepreneur with an innovative business idea, which is why we believe in giving resources to people with great ideas that have the potential to change the world for the better.
Moreover, we support improving healthcare access for remote areas in Vietnam. Through the FedEx delivery heartbeats outreach clinic program, in collaboration with VinaCapital Foundation (VCF), we are bringing free specialty healthcare and medical treatment for congenital heart disease to children in rural areas of the country. We’re proud that our efforts are improving the lives of more than 200,000 children. To add, in May, we’re teaming up with Orbis to train eye care professionals across Vietnam on ways to prevent the worsening of vision loss due to glaucoma in our new virtual Flying Eye Hospital project. By combining online and practical training, we will enable more skilled eye care professionals to offer access to quality eye care for patients particularly in rural areas.
Through collective efforts we will continue to deliver positive changes to help local communities, businesses and economies prosper.