Mr Marco Civardi, Area Managing Director of Damco Vietnam & Cambodia, spoke with VET's Ha Anh about the company's expansion strategy in Vietnam's logistics market.
With Damco having been in Vietnam for 20 years, what comment would you care to make about the country’s logistics industry?
Vietnam is a strategic market for Damco and the country is attracting more and more manufacturers who sell their goods all around the world. In Asia we’re witnessing rapid economic growth and the demand for high-quality logistics services is also increasing. For instance, cross-border trucking between Vietnam, Cambodia, China and Thailand is driving the need for professional warehousing and distribution services in these promising emerging markets. Being a country with a relatively “fresh” logistics industry but embracing a lot of geographical advantages, such as a long trans-national border and a coastline of over 3,200 km, Vietnam naturally becomes a strategic hub in the region with great potential for warehousing development.
Mr Marco Civardi
Area Managing Director of Damco Vietnam & Cambodia
Aware of the intense international trade competition among Southeast Asian nations, Vietnam, in recent years, has actively focused on infrastructure modernisation. Overland highways and road networks have been constructed. Seaports and deep-water ports have constantly been upgraded. Airports have been renewed or expanded in both scale and scope. These improvements generally facilitate new investments in production, trade and logistics on a national scale.
What transportation and logistics services do Damco offer in Vietnam?
Arriving in Vietnam in 1991, A.P. Moller - Maersk Group was the first 100 per cent foreign-owned logistics company in 2005 under Maersk Vietnam Limited, which consists of Damco, Maersk Line, MCC, APMT and APM Saigon Shipping. Damco offers comprehensive services such as international freight forwarding, warehousing, customs clearance and trucking distribution and overall supply chain management, including specific value-added services. Damco Vietnam transports a substantial number of TEUs annually on an import and export basis and our carrier partners are selected based on the key criteria of always meeting our customers’ expectations, which vary depending on the shipment’s location, delivery time, and service quality. We also offer weekly services from four main ports in Vietnam: Ho Chi Minh City, Hai Phong, Da Nang, and Quy Nhon.
Our growth in airfreight is worth mentioning as it’s been truly substantial over the last year and not only have we been able to increase our critical mass in tonnage handled but also, and most importantly, our growth has been at a much faster rate than the Vietnamese market itself. Our logistics and distribution service is also recording a rapid growth rate. Damco is currently one of the largest third-party logistics providers in Vietnam and based on our customers’ faith in our service quality and their own growth prospects we are optimistic about being able to retain our leading role in the transportation and logistics industry over the medium term. Damco Vietnam is now managing nearly 56,000 square metres of logistics distribution centres at key border gates throughout the country, with centres in Ho Chi Minh City and Binh Duong in the south, Da Nang in the central region, and Hanoi and Hai Phong in the north.
What is Damco’s business strategy over the next few years?
Damco’s business strategy in Vietnam fits well with our global company strategy of building on our strengths in emerging/developing markets. Recognising the opportunity brought by the aforementioned improvements in Vietnam’s road network as well as newly-developed air and seaport systems, Damco has invested in a new facility in Hai Phong to underline our ambition of providing customers with top quality domestic and international transport services. Commercially, we target to increase our commercial presence in key economic areas in Vietnam. At the same time we want to place a strong focus on domestic products such as cross-border trucking and Contract Logistics, chiefly eyeing opportunities in industrial sectors like chemicals and FMCG. Key for us will also be ongoing reciprocal support with our overseas partners, in order to develop volumes on our key trade-lanes and port-pairs in relation to Intra-Asia, Transpacific and Europe.
Damco has invested significantly in state-of-the-art Warehouse Management Systems and Processes to raise productivity and increase efficiency, directly benefiting customers’ supply chains. Customers now are able to view the status of their products as they pass through the consolidation process in the warehouse and when the products are packed into containers and shipped out to port. The new Warehouse will enable Damco to play a dual role as a warehousing and distribution hub on the one hand and on the other hand as a gateway to attract customers who are actively trading via the South China/Northern Vietnam economic corridor. Particularly in northern Vietnam there have been increased manufacturing activities from production being relocated from China to Vietnam as an emerging market, as firms are attracted by labour arbitrage benefits.
Finally, I would like to emphasise that nothing can be achieved without the backbone of our success, which is based on how we attract/retain/grow our local talent. On this note, investments are placed to nurture our already strong talent pool so that Damco Vietnam has the mix of skills that enable us to have an “in-house” leadership team ready for the medium term.
What are the strengths of Damco’s new logistics centre in Hai Phong?
Our new facility is strategically located near National Highway 5B and the Lach Huyen deep sea port; a key logistics hub in northern Vietnam. It is built to very high international and Customs - Trade Partnership against Terrorism (C-TPAT) standards, is well positioned to support increased volumes, and offers modern safety, security and fire-fighting systems. A key focus during construction and operation is the reduction of carbon emissions in accordance with Damco’s environmental policy. Damco plans to continue investing in our facilities here to meet the growing needs of our customers. The Haiphong Warehouse will provide customers with access to key services such as inventory management, order processing, RF scanning, bar coding, and vendor & carrier. It also offers value-added services such as cross-border and inland trucking. In essence, a comprehensive scope of services, an ideal geographic location, and the overall excellent quality of the warehouse itself are key advantages that our present and future clientele will benefit from.