New Air Cargo Capacity and Logistics Real Estate Investment as Vietnam Recovers

Vietnam is poised for a fresh injection of air cargo capacity and logistics property investment as the country’s post-lockdown economic recovery gains momentum.

Today, Alibaba’s logistics unit Cainiao launched a daily charter flight between Ho Chi Minh City and the Chinese city of Nanning to “safeguard” the cross-border logistics stability of Lazada, the Southeast Asian subsidiary of the e-commerce giant.

“The daily three-hour flight serves as an alternative to truck transportation and the current traffic congestion in Vietnam,” Cainiao said.

Indeed, since late December, China’s Covid border controls have created huge delays for Vietnamese road freight exports, especially fresh fruit, with up to 6,000 trucks queuing at the height of the delays. This reportedly prompted Vietnam’s Ministry of Commerce to call the border restrictions “exaggerated”.

On Saturday, there were still 1,000 container trucks waiting to cross Quang Ninh province, according to local media – some having waited in line for up to two months.

Cainiao’s charter flights will carry e-commerce goods and an expected increase in parcel volumes ahead of Tet, Vietnam’s Lunar New Year holiday, which, like China, begins on Tuesday.

Shawn Louis, General Manager APAC of Cainiao Global Export, said, “At the last Lazada 11.11 trade festival, Vietnam achieved approximately double the number of orders and sales compared to the previous year, demonstrating the immense potential growth in the local consumer market.

The boom in e-commerce sales is also behind property manager GLP’s decision to launch a $1.1 billion logistics property fund in Vietnam in a bid to address the shortage of modern logistics facilities. The fund’s initial investments will focus on the surrounding areas of Ho Chi Minh and Hanoi and will include six development sites with a total area of ​​900,000 square meters.

The country’s freight markets continue to show strong growth, despite last year’s long Covid lockdown and the hit to manufacturing, with exports rising 19% last year to $336 billion .

Dutch pension fund manager APG Asset Management is a key investor and Graeme Torre, Asia-Pacific property manager, said: “With the continued shift of the global supply chain to Vietnam, a middle class growing to support economic growth, as well as one of the fastest growing e-commerce markets in Southeast Asia, we believe that Vietnam Logistics is an attractive opportunity for us to enter the region .

Meanwhile, Norman Global Logistics has warned customers of factory closures over the Tet holiday: “Drivers starting the holiday will reduce trucking capacity and increase the costs of any local deliveries that need to be arranged.”

The freight forwarder said sea and air freight operations would continue as normal, but there was “heavy congestion with long delays for deliveries to ports and terminals, and a shortage of equipment from all ports”. .