DHL Vietnam happy to make trade happen

DHL Vietnam has maintained market leadership in the air express service, building on the strong national economic growth

[QQ] It has been five years since Roger Pritchard took up his post in this country. During that time the most memorable event for him as country manager of DHL Vietnam has been the signing of the Vietnam-U.S. bilateral trade agreement. "One of my lasting memories will be the ratification of the BTA in December three years ago." As Pritchard puts it, the agreement has not only turned the United States into Vietnam's biggest trading partner only after two years but has also made a big difference to DHL's business in Vietnam.

But DHL did not wait for the BTA to be ratified to start its business in Vietnam. It was in 1988 that DHL became the first international express deliverer to set up an office in Vietnam after 1975. "The market was modest then," Pritchard says. "DHL signed two agency contracts with the Hanoi and HCM City post and telecom offices. At that time, our services involved mainly international document and small parcel deliveries."

DHL Vietnam now has a 400-strong staff compared with 68 at the beginning. It has been handling ever-heavier parcels and shipments. "Earlier this year, we launched the express pallet service, which is actually special packaging for heavier shipments," Pritchard says. Before, the 20kg-50kg weight range was the most popular category of goods to be delivered. But recently, much heavier cargoes have become more regular. As a result, DHL Vietnam has kicked off an express service for cargoes of the 50kg-150kg weight range. The new service helps satisfy the need to send heavier cargoes such as furniture, woodwork and handicrafts to the U.S. or the European Union.

DHL Vietnam has also focused on the garment-textile-fashion apparel industry. "This is the largest segment for us in Vietnam," Pritchard says. To meet the growing demand in this category, DHL Vietnam has launched a service called Fashion First designed for faster deliveries of fashion garments from Vietnam.

Pritchard says DHL is now the only air express company in Vietnam to charter a dedicated cargo plane, a Boeing 737, for daily flights, except on the weekend, from HCM City to Bangkok for connecting flights.

Plans for growth

On average, DHL Vietnam has registered a growth of 30%-40% a year, a rate that is comparable to DHL in China. Therefore, Pritchard looks to 2005 with confidence. "We expect another good year," he says. "With the high gross domestic product growth, the ongoing World Trade Organization access and the reconfirmation of the Vietnam-U.S. trade agreement, Vietnam will attract more investors. With them, business will develop further and markets expand." Pritchard says he anticipates this growth trend of DHL Vietnam will continue beyond 2005 and may last until 2010.

To foster the growth of Vietnam's export sector, DHL has committed itself to providing good service, good value and effective customer solutions. "By doing this, we can obviously facilitate trade between Vietnam and the rest of the world," Pritchard says.

Next year, DHL Vietnam will expand services by introducing new technology. "For example, we will add more software and hardware that help our customers track and trace their goods, and book places from their desks," he says. "In fact, these services have been available already, but the number of customers that have the means of access is limited. We plan to make it available for many more customers."

DHL Vietnam considers its dedicated cargo aircraft a spearhead in the air express service, especially when commercial flights are not available. During peak time, Tet for instance, dedicated cargo aircraft are expected to provide value for customers. "Our freight-only planes allow us to be more flexible and reliable."

As the first-comer, DHL Vietnam easily established its leading position in the market, and has since maintained it. "We have maintained that market leadership not only in Vietnam but in Asia Pacific and the world," Pritchard says. "Vietnam's market for air express has a lot of competition but there is also a lot of business and plenty of room for competitors."

Hanoi and HCM City account for up to 60% of DHL's air express services. However, provincial centers such as Can Tho, Danang, Vung Tau, Nha Trang and even Quy Nhon are quickly gaining speed, offering great potential for growth. As foreign investors get more involved in the provinces, they will create more business for DHL Vietnam. Experience gained by DHL from Asia Pacific countries show that initially strong growth is achieved in regional cities like Hanoi and HCM City, but as the market matures more and more business occurs in provincial cities.

As regards overseas destinations, the air express service used to be within Asia Pacific, but this has changed significantly. "In 1988 when DHL arrived, the majority of business was going intra-Asia, to Vietnam's trading partners like Singapore, Taiwan, Korea, and Japan. But since the BTA was signed and with the WTO accession is forthcoming, we expect a shift from intra-Asia business to Europe, and the U.S. in particular."

DHL's strategy for Vietnam is part of its strategy for Asia Pacific. "We're looking for a faster transit time, more competitive pricing, better service," Pritchard says. "With these, we'll be confident that business will continue successfully."

To make this ambition a reality, the most important thing for DHL is investment in services. The first investment is in its people – DHL staff working in Vietnam and in the global network. "We try to train them to be the most professional service organization in the world – offering everything from computer skills to language skills," Pritchard says.

DHL Vietnam has invested heavily in its infrastructure and facilities. "We believe that our investment will pay off handsomely," he says. DHL also has to make sure that it offers the right products and solutions. "During the past five years, customer requirements have changed a lot. Their demands have become more and more sophisticated. To maintain our market leadership, we have to provide the best solutions."

Pritchard, a Briton from London, says he is pleased with what he has achieved in Vietnam, both in business and in his personal life. "Personally, my most memorable moment during the past five years in Vietnam has been of two of my children being born here. I'm happy to bring them up here." x

DHL is the sponsor of The Saigon Times FDI Top 40 Award co-organized by The Saigon Times and the departments of planning and investment of Ba Ria-Vung Tau, Binh Duong, Dong Nai and HCM City.

"As a service provider for general business, being associated with the high-recognition award program organized by The Saigon Times is a good opportunity for us. We're very happy to sponsor this type of award. It's a good fit for us. We obviously want to encourage foreign investors to come to Vietnam. Foreign companies make up a large proportion of our customers. Any encouragement or recognition for those foreign direct investment companies is welcome. We hope the winners will be good examples to all businesses in Vietnam and overseas."

Roger Pritchard

DHL Vietnam country manager