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Development of goods transport by air

(VLR) At the Vietnam Logistics Forum 2020, held in Hanoi on November 26, 2020, with the theme "Reduce Logistics Costs, Strengthen Competitiveness in the Context of International Economic Integration", Vietnam Logistics Business Association (VLA) had a presentation on "Measures to reduce Costs of Logistics Services, Improve the Competitiveness of the Economy", where in certain proposed measures to develop freight by air, opening direct international freight routes. This recommendation has been highly regarded for its feasibility.

Mr Dao Trong Khoa, Deputy President of VLA suggested some solutions to reduce logistics cost at the Forum

Mr Dao Trong Khoa, Deputy President of VLA suggested some solutions to reduce logistics cost at the Forum

The VLA's proposal is also consistent with the direction of the Prime Minister in the official document. No. 7709 / VPCP-CN, dated September 15, 2020 of the Office of the Government to the Ministry of Transport on the study of an airline (Cargo Airlines) with a separate cargo fleet for Vietnamese agricultural products, for separate routes”.

Currently, our country has a great potential for exporting agricultural and aquatic products. In 2019, the total export turnover of Vietnam's agricultural and fishery products reached nearly USD25.5 billion. Vietnam's air freights accounted for about 0.2% of the total volume, but accounted for 25 % of the country's total export value due to high value commodities. Vietnamese agricultural products have been present in many major markets such as the US, China, EU, Japan, South Korea ... however, due to the specific nature of agricultural products, the use cycle is short, easily damaged, and seasonal, so the air transport is an important solution to keep their markets and increase the competitiveness for Vietnamese agricultural produces.

Although the Vietnamese airlines are in the development process, they are still small in scale compared to other airlines in the world and in the region. Air freight is mainly focused on exploiting the belly of the passenger plane but has not yet invested in freighter aircraft. Therefore, to develop air freight transportation in general and agricultural products in particular, we must have an airline with a separate cargo fleet for Vietnamese agricultural products, for separate routes. Thereby, it will contribute to cutting logistics costs.

Stemming from the above situation, a number of the leading VLA Members have established ASEAN CARGO GATEWAY JOINT STOCK COMPANY (ACG), in October 2020, located at 6th Floor, Me Linh Point Tower, No. 2 Ngo Duc Ke Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam. ACG is an air services company, providing loads, initially operating a consolidation service for charter freighters to and from Vietnam, on the Saigon-Narita-Saigon route (SGN-NRT-SGN) by A321CEO aircraft (seats removed).

Cargo capacity: About 6,000kgs on compartments, and about 9,000kg or more in passenger cabins. Cargo volume: about 36 CBM in the cargo compartments and about 55 - 65 CBM in the passenger cabins.

Estimated flight schedule: Ho Chi Minh City (SGN) - Tokyo Narita (NRT) - Departure 23:40 hours - Arrival Narita 07:00 hours. Tokyo Narita-Departure 10:00 AM - Arrival Ho Chi Minh City 15:00 hrs. Flying services are scheduled on weekdays.

The expected selling price is about 25% - 30% lower than the current market price from Japan - Vietnam. Service scheduled is to start flying in early 2021. On the basis of successfully exploiting this route, ACG will exploit other routes.

This is a breakthrough service in face of today's difficult conditions. It is a need of the support from the business community importing and exporting agricultural products and seafood as well as logistics service businesses. “Working Together and Advancing Together”, we will definitely succeed in service of trade promotion for import and export of agricultural products and reducing logistics costs.

Nguyen Tuong

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