Falling export activity hits logistics firms

HA NOI —

Pham Quang Thang, a senior executive of FedEx, an express forwarding firm, told Thoi Bao Kinh Te Sai Gon (Saigon Economic Times) that the number of logistic orders had been on the decrease; a drop of 30-40 per cent was seen from garment companies – the biggest client of FedEx. The air transport company mainly carries samples of products foreign companies outsource to Vietnamese companies.

Thang said that his company's turnover kept growing, but the rising rate had clearly slowed down, a common problem of nearly all express forwarding firms. He estimated that the growth of the business had currently decreased to 10-20 per cent from the rate of 30-40 per cent of the previous years.

Bui Anh Duc, a senior executive of Bee Logistics in HCM City, also said that his company order numbers in the first four months of the year was reduced by roughly 30-40 per cent against the same period last year. The decrease was seen not only in the contracts to serve exports, but imports as well.

Duc explained that besides facing market difficulties in the wake of the global economic slowdown, his clients had also faced financial problems. Therefore, they were not making products to export at this moment.

Besides concerns about the sharp fall of orders, logistics firms are also worried about a further increase of freight charges announced by shipping firms. The shipping fees to Europe this year have increased by 100 per cent against last year. Increases in price to the US and China were 50 per cent and 300 per cent, respectively. Shipping fees account for the biggest proportion of door-to-door logistics services. Therefore, the shipping fee increases will certainly influence the logistics firms' service fees.

Meanwhile, Duc said that logistics firms, especially domestic ones, had to compete fiercely with each other to survive. Therefore, some firms would accept modest fee increases to share the difficulties with clients. — VNS