Director of Warehousing at U&I Logistics - Mr. Nguyen Thanh Lam: “The bonded warehouse market for wooden furniture exports is booming…”

By Ha Minh|03/07/2024 11:15

In a conversation with us, Mr. Nguyen Thanh Lam, Director of Warehousing at U&I Logistics (U&I Logistics), noted that the bonded warehouse market for wooden furniture exports is flourishing. Our research indicates that this company currently holds the largest bonded warehouse business operation in Southeast Asia.

Goods at U&I Logistics' warehouse are stored under security conditions according to C-TPAT regulations

U&I Logistics has achieved the C-TPAT security standard certification, which is a significant strength in their warehousing and distribution services.

  • Mr. Lam, wood and wood product exports have increased by 25% in the first four months of 2024 compared to the same period last year. Do you think this is a positive signal for the bonded warehouse market in Bình Dương, the “wood furniture capital”?

Mr. Nguyen Thanh Lam: Firstly, this is a positive signal for wood furniture manufacturers and raw material suppliers, followed by logistics service businesses.

Binh Duong, as the wood furniture production hub of Vietnam, will benefit the most from this growth. However, as the leading bonded warehouse business serving the wood furniture sector nationwide with our facilities located in this hub, U&I Logistics perceives that this might not be a fully optimistic signal for the bonded warehouse market here. Most of this growth rate is due to direct exports from factories to overseas markets, and while goods passing through bonded warehouses have grown, it’s at a smaller rate.

Direct export is a common trend among U.S. trade companies to reduce logistics costs, especially given the current high transportation costs and the market’s slow recovery. However, direct export is only a temporary solution as it reduces the flexibility of combining goods from various suppliers, causing inconvenience for orders with multiple types. In the long run, bonded warehouses in Vietnam will remain the optimal choice for storage, combination, and distribution of wooden furniture to U.S. businesses.

According to some of our U.S. customers, the wooden furniture market will see little fluctuation from now until the end of the year. Although there’s growth, it’s slow, as evident from the lackluster results of the High Point Furniture Market exhibition in late April in North Carolina, USA.

  • In your opinion, how do the trade defense measures of major markets like the U.S. affect wood and bonded warehouse businesses? If so, what measures has U&I Logistics taken to respond to this situation?

Mr. Nguyen Thanh Lam: The U.S. is currently Vietnam's largest export market, accounting for nearly 30% of Vietnam's total export turnover worldwide. Wood and wood products alone generated over $7 billion in export revenue in 2023, making up 54% of the total value of the industry’s exports. Therefore, the U.S. trade defense measures concerning furniture-related products such as hardwood plywood, wooden cabinets and vanities, and upholstered seats with wooden frames significantly impact wood and bonded warehouse businesses.

Director of Warehousing at U&I Logistics - Mr. Nguyen Thanh Lam

I believe these impacts are more positive than negative, especially for legitimate, reputable, and professional businesses.

For these companies, the U.S. trade defense measures serve as reminders and warnings. Compliance and full adherence to these measures are welcomed. Any company that is unfairly accused of evading anti-dumping duties should promptly present counterarguments and explanations to the U.S. Department of Commerce (DOC). Quick responses benefit the company by not only clearing its name but also demonstrating good cooperation.

In 2022, U&I Logistics was once listed by the DOC for violating trade defense regulations. We immediately provided evidence and detailed explanations through the DOC’s website. Since then, U&I Logistics has not been mentioned in subsequent violation lists. This incident made us more aware of the U.S. rules and led us to develop a more rigorous and professional working process.

The U.S. is currently Vietnam's largest export market (Source: General Statistics Office)
  • As a large and professional bonded warehouse service provider in the region, does U&I Logistics have any favorable policies or incentives for wood businesses in the U.S. and European markets using your bonded warehouse services in the near future?

Mr. Nguyen Thanh Lam: With many years of experience in providing logistics services for the wood industry, such as customs declaration, transportation, and especially bonded warehousing, U&I Logistics understands the needs and desires of our customers. We always strive to facilitate their operations, turning our bonded warehouse system into reliable distribution centers for them in Asia instead of the U.S. or Europe. To achieve this, we ensure the following factors:

  • Lower logistics costs compared to the U.S. or Europe. By continuously improving processes, enhancing productivity, and applying technology to all activities to reduce costs, U&I Logistics’ service prices meet customers’ expectations.
  • The supply chain is ensured at all stages from the supplier to U&I’s bonded warehouses and from U&I’s bonded warehouses to overseas buyers.
  • Goods are always preserved under the best conditions with a humidity control system below 65% at all times and locations in the warehouse; insects are periodically controlled, and the warehouse is continuously cleaned.
  • Goods are stored under security conditions according to C-TPAT regulations. U&I Logistics’ bonded warehouses have met this standard since 2009 and continue to maintain it. This greatly supports customers in reducing costs and customs clearance time at U.S. ports.
  • Real-time data tracking of inventory and supply chain flow through a self-developed WMS software, meeting the company’s needs and supporting customers in monitoring inventory and the flow of goods in the supply chain anytime, anywhere.

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Director of Warehousing at U&I Logistics - Mr. Nguyen Thanh Lam: “The bonded warehouse market for wooden furniture exports is booming…”