Q4 2015
www.bmiresearch.com

VIETNAM
FREIGHT TRANSPORT REPORT
INCLUDES 5-YEAR FORECASTS TO 2019

ISSN 1750-5364
Published by:BMI Research


Vietnam Freight Transport Report Q4 2015
INCLUDES 5-YEAR FORECASTS TO 2019

Part of BMI’s Industry Report & Forecasts Series
Published by: BMI Research
Copy deadline: August 2015

BMI Research
Senator House
85 Queen Victoria Street
London
EC4V 4AB
United Kingdom
Tel: +44 (0) 20 7248 0468
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© 2015 Business Monitor International Ltd
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DISCLAIMER
All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of
publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor
International Ltd accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the
publication. All information is provided without warranty, and Business Monitor International Ltd makes no representation of warranty of any kind
as to the accuracy or completeness of any information hereto contained.


Vietnam Freight Transport Report Q4 2015
INCLUDES 5-YEAR FORECASTS TO 2019

Part of BMI’s Industry Report & Forecasts Series
Published by: BMI Research
Copy deadline: August 2015

BMI Research
Senator House
85 Queen Victoria Street
London

EC4V 4AB
United Kingdom
Tel: +44 (0) 20 7248 0468
Fax: +44 (0) 20 7248 0467
Email:
Web:

© 2015 Business Monitor International Ltd
All rights reserved.
All information contained in this publication is
copyrighted in the name of Business Monitor
International Ltd, and as such no part of this
publication may be reproduced, repackaged,
redistributed, resold in whole or in any part, or used
in any form or by any means graphic, electronic or
mechanical, including photocopying, recording,
taping, or by information storage or retrieval, or by
any other means, without the express written consent
of the publisher.

DISCLAIMER
All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of
publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor
International Ltd accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the
publication. All information is provided without warranty, and Business Monitor International Ltd makes no representation of warranty of any kind
as to the accuracy or completeness of any information hereto contained.



Vietnam Freight Transport Report Q4 2015


CONTENTS
BMI Industry View ............................................................................................................... 7
SWOT .................................................................................................................................... 9
Freight Transport ...................................................................................................................................... 9
Political ................................................................................................................................................. 11
Economic ............................................................................................................................................... 12
Operational Risk ..................................................................................................................................... 14

Industry Forecast .............................................................................................................. 16
Trade Forecast ........................................................................................................................................ 16
Table: Trade Overview (Vietnam 2012-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table: Key Trade Indicators (Vietnam 2012-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table: Main Import Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table: Main Export Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Road Freight Forecast .............................................................................................................................. 22
Table: Road Freight (Vietnam 2012-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Rail Freight Forecast ............................................................................................................................... 25
Table: Rail Freight (Vietnam 2012-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Air Freight Forecast ................................................................................................................................ 28
Table: Air Freight (Vietnam 2012-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Market Overview ............................................................................................................... 32
Company Profile ................................................................................................................ 34
Vietnam Airlines Cargo ............................................................................................................................ 34

Political Outlook ................................................................................................................ 36

Foreign Policy ........................................................................................................................................ 36
Table: Vietnam Political Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Long-Term Political Outlook ..................................................................................................................... 41

Oil Price Outlook ............................................................................................................... 45
Global - Crude Oil, Refined Fuels And Natural Gas Prices, 10-Year Forecasts ................................................... 45
Table: Energy Price Forecasts (Global 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Table: Energy Price Forecasts (Global 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Macroeconomic Forecasts ............................................................................................... 48
Economic Analysis ................................................................................................................................... 48
Table: Economic Activity (Vietnam 2010-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Demographic Forecast ..................................................................................................... 54
Table: Population Headline Indicators (Vietnam 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Table: Key Population Ratios (Vietnam 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Table: Urban/Rural Population & Life Expectancy (Vietnam 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

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Vietnam Freight Transport Report Q4 2015
Table: Population By Age Group (Vietnam 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Table: Population By Age Group % (Vietnam 1990-2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Methodology ...................................................................................................................... 59
Industry Forecast Methodology ................................................................................................................ 59

Sector-Specific Methodology .................................................................................................................... 60
Sources ................................................................................................................................................ 62

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Vietnam Freight Transport Report Q4 2015

BMI Industry View
BMI View: Strong foreign direct investment (FDI), in addition to steady trade growth and the prospect of
ongoing infrastructure development, both public and private, will impact favourably on the freight industry.
Falling fuel prices will encourage road transport whilst rail transport will be spurred on by new investment
both domestic and foreign. Government approval of the development project of Long Thanh Int'l Airport
signals recognition of the need to strengthen Vietnam's credentials as an air transport hub for the Southeast
Asian region.

We expect export growth in Vietnam to be maintained at a steady level in the medium term, averaging
6.52% y-o-y between 2015 and 2019. In 2015, total trade real growth will come in at 6.65%, with imports
outperforming exports. Of the key trade indicators, agricultural exports will see the biggest year on year
growth in 2015, with fuel exports seeing the smallest growth figures. The signing of a free trade zone
agreement between Eurasian Economic Union (EEU) and Vietnam will drive trade growth between the two
markets.

Strong foreign direct investment, infrastructure development and growing export through 2015 are set to
benefit the road freight sector in Vietnam. This will set y-o-y growth in terms of tonnage transported by
road on an upward curve with a forecast growth of 7.75% in 2015 up from 6.77% in 2014, rising to 8.12%
in 2016. Road freight companies look set to benefit in particular from falling fuel prices and rising

consumer demand, as they strive to offer economical alternatives to air and shipping freight.

Year-on-year tonnage growth of the rail freight industry is set to half in 2015 to 5.07% compared to 10.01 in
2014 with further contraction predicted to the coming years, this despite increased investment in
infrastructure development and the proposed construction of new lines, such as a partnership with Russia.
Access from private investment using the PPP model is likely to facilitate development

Following a spike in 2014, air freight in Vietnam looks set to grow by 6.27% in 2015 with levels expected
to remain similar until 2019, as the country is credited with one of the three fastest growing air freight
industries in the world. Growth will be facilitated by the in-flow of hi-tech manufacturing from China and
India along with government action to restructure the market and increase the role of the industry in key
economic zones and remote areas.

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Vietnam Freight Transport Report Q4 2015

Recent developments
■

Russia and Vietnamese Railways sign co-operation agreement with the construction of a railway line in
the south of Vietnam marking the start of the joint development of infrastructure between the two
countries.

■

The Ministry of Transport approves the restructure of the air freight market by 2020 in order to develop

the cargo transport market and increase the role of airfreight, especially in key economic zones and
remote areas

■

Vietnam Airlines adds Boeing 787-9 Dreamliner and new generation Airbus A350 XWB to fleet, in
addition to securing access from Heathrow Airport.

■

Government approves construction of Long Thanh Int'l Airport, which will begin in 2019.

■

Third-party logistics provider C. H. Robinson Worldwide opens new global forwarding office in Ho Chi
Minh City.

Key BMI Forecasts:
■

We forecast total road freight volumes will rise by 7.75% y-o-y over 2015 to reach 880.14mn tonnes.

■

We forecast total rail freight volumes will grow by 5.07% year on year over 2015 to reach 7.54mn
tonnes.

■

We forecast total air freight volumes will rise by 6.27% year on year over 2015 to reach 214.67 tonnes.


■

We forecast total trade value to increase by 6.65% to reach USD319.27bn in 2015.

■

The top export trade partners will be the US, China, Japan, South Korea and Germany, with imports led
by China, South Korea, Singapore, Japan and China

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Vietnam Freight Transport Report Q4 2015

SWOT
Freight Transport

Vietnam Freight Transport Industry SWOT Analysis

Strengths

■

Vietnam's strong domestic growth rate, coupled with its geography - it stretches for
thousands of kilometres on a north-south axis - creates a need for long-distance
freight haulage.


■

Recent cooperation between Russia and Vietnam signals the beginning of a joint
infrastructure development starting with the construction of a railway line in the south
of the country.

■

Government approval of the restructure of the air freight market by 2020 will see the
development of the cargo transport market and increase the role of airfreight,
particularly in key economic zones and remote areas.

■

High level of foreign direct investment into Vietnam's manufacturing sector continues
to be a strong driver for international transport and logistics services.

Weaknesses

■

The generally poor state of the road network. Despite new highway construction, only
13.5% of the network is considered to be in good condition. Just 26% of the network
has two or more lanes and only 29% is tarred.

■

Traditionally low investment in rail, with the potential for cost-effective bulk rail freight
being underutilised.


■

Despite air freight seeing the third fastest growth in the world, it appears that Vietnam
has struggled to establish a comprehensive logistics chain to take advantage of this
growth. Unresolved business environment issues and lack of significant improvement
in access to infrastructure financing means that we remain very conservative on the
growth potential of Vietnam's freight sector.

■

A slowdown affecting the US economy has a knock-on effect on Vietnam due to it
being the Asian country's largest export partner.

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Vietnam Freight Transport Report Q4 2015

Vietnam Freight Transport Industry SWOT Analysis - Continued

Opportunities

■

The beginnings of local commercial vehicle production, which will help improve the
stock of lorries used by road haulage companies.

■


Chinese investment could bring about much-needed improvements in the rail sector.

■

The World Bank stated at the start of 2014 that improved infrastructure could improve
the country's economy substantially.

■

Increase in hi-tech production moving into Vietnam from China and telecoms from
India will increase demand in transport capacity and particularly air freight.

■

Government approval of the VND336.7 trillion (US$16 billion) construction of Long
Thanh international in the southern Dong Nai Province provides opportunity for new
routes and increased capacity, with the handling of five million tons of cargo by 2050.

■

Vietnam's signing of a free trade deal with Russia-led Eurasian Economic Union (EEU)
will drive trade growth and therefore between the two markets opening up new
opportunity for the freight industry.

Threats

■

Vietnam risks losing out to neighbouring countries if it is unable to develop its

infrastructure to keep up with the pace of demand.

■

Vietnam is vulnerable to any slowdown in Chinese investment and to political risk in
the sensitive South China Sea, subject to competing sovereignty claims.

■

A drop in international demand for exports would negatively affect Vietnam's freight
transport sector.

■

Need for transport services in the country to meet growing customer demand through
rapid modernisation and expansion or competitiveness will be threatened.

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Vietnam Freight Transport Report Q4 2015

Political
SWOT Analysis

Strengths

■


The Communist Party of Vietnam remains committed to market-oriented reforms and
we do not expect major shifts in policy direction over the coming years. The one-party
system is generally conducive to short-term political stability.

■

Relations with the US have witnessed a marked improvement, and Washington sees
Hanoi as a potential geopolitical ally in South East Asia.

Weaknesses

■

Corruption among government officials poses a major threat to the legitimacy of the
ruling Communist Party.

■

There is increasing (albeit still limited) public dissatisfaction with the leadership's tight
control over political dissent.

Opportunities

■

The government recognises the threat corruption poses to its legitimacy, and has
acted to clamp down on graft among party officials.

■


Vietnam has allowed legislators to become more vocal in criticising government
policies. This is opening up opportunities for more checks and balances within the
one-party system.

Threats

■

Although strong domestic control will ensure little change to Vietnam's political scene
in the next few years, over the longer term, the one-party-state will probably be
unsustainable.

■

Relations with China have deteriorated over recent years due to Beijing's more
assertive stance over disputed islands in the South China Sea.

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Vietnam Freight Transport Report Q4 2015

Economic
SWOT Analysis

Strengths


■

Vietnam has been one of the fastest-growing economies in Asia in recent years, with
GDP growth averaging 6.5% annually between 2000 and 2014.

■

The economic boom has lifted many Vietnamese out of poverty, with the official
poverty rate in the country falling from 58% in 1993 to 17.2% in 2012.

■

Vietnam has been strengthening its trade and aid ties in a bid to increase exports and
diversify its export sector.

Weaknesses

■

Vietnam still suffers from fiscal deficits, leaving the economy vulnerable to global
economic uncertainties. The fiscal deficit is dominated by substantial spending on
social subsidies that could be difficult to withdraw.

■

The heavily-managed and weak currency reduces incentives to improve quality of
exports, and also keeps import costs high.

Opportunities


■

WTO membership and the ASEAN economic integration in 2015 should give Vietnam
greater access to both foreign markets and capital, while making Vietnamese
enterprises stronger through increased foreign competition.

■

The government has continued to move forward with market reforms, including
privatisation of state-owned enterprises, addressing the high level of bad loans in the
banking sector as well as liberalising the banking sector.

■

Urbanisation will continue to be a long-term growth driver. The UN forecasts the
urban population rising from 32% of the population in 2013 to more than 50% by the
early 2040s.

Threats

■

Although inflation has subsided in 2014, complacency by the State Bank of Vietnam
on this front could result in a decline in investment.

■

The potential for an escalation of political tensions with China over sovereign claims
to parts of the South China Sea could have a negative impact on the economy.


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Vietnam Freight Transport Report Q4 2015

SWOT Analysis - Continued
■

Market reforms could progress at a much slower pace as the government remains
cautious about ceding ownership to foreign investors.

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Vietnam Freight Transport Report Q4 2015

Operational Risk

SWOT Analysis

Strengths

■

Vietnam has a high number of university graduates with skilled degrees and a high
literacy rate for its income level.


• In addition to a number of regional and international flight options, Vietnam has an
extensive inland waterway system.
• Growing levels of foreign investment encourage further trade and spin-off industries.
• Vietnam's rate of violent crime is generally low, and foreigners are unlikely to be
targeted.
Weaknesses

■

High labour costs increase overall operating costs, and difficulty in hiring foreigners
creates shortages of skilled labour.

• Underdeveloped rail capacity overburdens the road network.
• An underdeveloped banking sector decreases the options for keeping money in the
state.
• Vietnam's military forces are only a quarter the size of China's, meaning that Beijing
would probably prevail in any naval battle over maritime disputes in the South China
Sea.
Opportunities

■

Explosive growth in demand for tertiary education will increase the number of highly
skilled graduates in the medium term.

• Vietnam is easily accessible from the main shipping routes, and growth in the number
of port facilities will provide adequate capacity.
• Increased foreign participation in the banking sector will increase the availability of
funds for loans.

Threats

■

Dysfunctional labour-management relations increase the risk of disruption and strike
action.

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Vietnam Freight Transport Report Q4 2015

SWOT Analysis - Continued

• Vietnam's reliance on imported oil poses risks in the form of energy and fuel
shortages.
• Corruption and inefficiency in the legal system.
• Anti-Chinese violence, as seen in May 2014, could be a harbinger of wider political
and social unrest.

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Vietnam Freight Transport Report Q4 2015

Industry Forecast

Trade Forecast
BMI View: 2015 will see export growth of 5.8% just down from 2014's 5.92%, though this is expected to
rise over the following three years. That said, exports will likely underperform the 8.92% nominal growth
pace set in 2014, settling at 6.66% in 2015, with rice exports in the first half of 2015 down 6.2 percent from
the same period last year to 3.05 million tonnes, according to the Agriculture Ministry. Import growth is
likely to remain steady in 2015, with dipping only slightly by 2019.

In terms of geographical breakdown, we believe the US market will be the key to sustaining robust export
growth in Vietnam over the coming quarters amid ongoing regional headwinds. Indeed, the US remains the
largest destination for Vietnamese exports, receiving 19.8% of the total in the first four months of 2015.
While there was a poor run of economic data from the US in the month of April, we nevertheless expect the
US economy to continue its recovery amid a healing labour market and weak global oil prices. Recovering
US consumer confidence will in turn provide a boost to demand for Vietnamese goods, particularly for
textiles and garments. In Q1 2015, the 'textiles and garments' category grew by 7.8% y-o-y to USD4.8bn,
which is, by extension, welcome news to the air freight mode as it will be via air, as well as sea, that these
exports are transported. The US accounted for 17.6% of all exports out of Vietnam in 2013 (latest available
data), which underlines the importance of the US market to Vietnamese freight modes.

While the US economy appears to be back on its feet, the regional economic slowdown in Vietnam's other
key trading partners, particularly China, Japan and South Korea, will act as a drag on Vietnamese export
growth, thus resulting in export growth in 2015 dipping slightly on 2014's 5.92% y-o-y gains. Indeed,
China, Japan and South Korea received a combined 23.8% of the total for the first four months of 2015.
Growth in exports to these major trading partners will likely be negatively impacted by ongoing general
weakness in these economies. In China, ongoing economic rebalancing efforts by the Chinese government
will continue to slow growth in the world's second largest economy. Import growth in China contracted by
12.3% y-o-y in March, reflecting the economic slowdown in recent quarters. Meanwhile, attempts to revive
the Japanese economy appear to have fallen short, with real household income and industrial production
growth remaining rather lacklustre.

The ability to attract strong foreign direct investment (FDI) inflows to the manufacturing sector is another

factor that will keep the Vietnamese export sector vibrant. The exports of manufactured goods are set to
grow by 7.08% in 2015. Well-known multinational companies like Samsung (one of the largest foreign
investors in Vietnam) and Procter and Gamble are increasing their investment in the country, which will

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Vietnam Freight Transport Report Q4 2015

only benefit the freight industry, in particular air freight as goods are flown out to more developed
countries. In particular, Samsung (through its various subsidiaries) is running several large scale projects in
Vietnam, including the construction of a second smartphone factory worth USD3.0bn in the northern
province of Thai Nguyen and a USD1.0bn production plant in the province of Bac Ninh to manufacture
LCD screens. According to the Ministry of Planning and Investment, registered capital investment from the
South Korean giant is estimated to hit USD20.0bn by 2017. The total investment from Samsung in the
country currently stands at around USD11.0bn.

Trade Sees Steady Growth Through To 2019
Imports and Exports Value (2013-2019)
600

400

200

Vietnam - Imports, USDbn

2019f


2018f

2017f

2016f

2015f

2014

2013

0

Vietnam - Exports, USDbn

f = BMI forecast. Source: ADB, General Statistics Office of Vietnam, BMI

Medium Term

In welcome news for the Vietnamese freight industry, Vietnam and South Korea have concluded
negotiations for a bilateral free trade agreement (FTA) during a meeting between Vietnamese Prime
Minister Nguyen Tan Dung and South Korean President Park Geun-hye on the sidelines of the ASEANKorea Commemorative Summit. The FTA seeks to triple bilateral trade turnover to USD70bn by 2020. The
FTA covers 17 areas, including products, services and investment and intellectual property; however, it

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Vietnam Freight Transport Report Q4 2015

excludes rice, a sensitive product for Korean farmers, as reported by the Korea Times. The two Asian
nations have held nine rounds of FTA talks since August 2012, reported Thanh Nien News. If Vietnam and
South Korea can appease farmers in the latter country, the former is set to benefit from its large rice exports.
The anticipated bounce from the FTA is one of the key reasons why we see export growth in Vietnam
performing strongly over our medium term forecast period, growing by an average 6.52% y-o-y between
2015 and 2019.

Long Term

Coal production will remain the overwhelming power source of choice, most notably in China and India,
and with Vietnam exporting significant amounts of coal, it is well placed to benefit from growing demand
over the long term. Not only is coal the cheapest option, but it is relatively abundant, scalable and has a
faster turnaround than other fuel sources. We forecast that despite rising environmental concerns, by 2024,
coal will still account for approximately 70.0% of China's energy mix, down only marginally from about
73.0% currently. Although coal will remain the power source of choice, we do expect policy changes to
boost growth in nuclear and renewable energy sources over the next decade.

With Europe being the second largest export destination for Vietnamese goods (receiving 18.8% of the total
for the first four months of 2015), weakness in the euro will undoubtedly weigh on European demand for
Vietnam's exports going forward, a situation that has occurred in the first half of 2015. The euro has
depreciated against the Vietnamese dong by about 20% since May 2014, making Vietnamese goods more
expensive in euro terms and this is a scenario that could worsen in future, affecting demand for Vietnamese
goods and thus having a detrimental effect on the country's freight modes, in particular air freight.

Table: Trade Overview (Vietnam 2012-2019)

2012


2013

2014

2015f

2016f

2017f

2018f

2019f

Imports, real growth, % y-o-y

9.09

7.90

7.50

7.50

7.30

7.20

7.00


7.00

Exports, real growth, % y-o-y

15.71

6.00

5.92

5.80

6.20

6.60

6.80

7.20

Total Trade, real growth, % y-o-y

12.40

6.95

6.71

6.65


6.75

6.90

6.90

7.10

118.98

133.50

147.57

159.94

178.12

202.18

229.09

259.36

5.86

12.20

10.54


8.38

11.37

13.51

13.31

13.21

124.43

137.15

149.38

159.34

175.63

198.25

224.21

254.31

16.46

10.22


8.92

6.66

10.23

12.88

13.10

13.42

243.41

270.65

296.96

319.27

353.75

400.43

453.30

513.67

Imports, USDbn

Import growth, % y-o-y
Exports, USDbn
Export growth, % y-o-y
Total trade, USDbn

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Vietnam Freight Transport Report Q4 2015

Trade Overview (Vietnam 2012-2019) - Continued

Total trade growth, % y-o-y

2012

2013

2014

2015f

2016f

2017f

2018f


2019f

11.03

11.19

9.72

7.51

10.80

13.20

13.20

13.32

f = BMI forecast. Source: ADB, General Statistics Office of Vietnam, BMI

Table: Key Trade Indicators (Vietnam 2012-2019)

2012

2013

2014e

2015f


2016f

2017f

2018f

2019f

3,882

4,482

4,864

5,301

6,246

6,883

8,144

9,026

-8.0

15.4

8.5


9.0

17.8

10.2

18.3

10.8

3,767

3,363

4,677

4,982

5,205

6,095

6,599

7,702

Agricultural raw materials, imports, % y-oy

-9.0


-10.7

39.1

6.5

4.5

17.1

8.3

16.7

Ores and metals, exports, USDmn

729

1,055

1,102

1,179

1,276

1,472

1,639


1,892

Ores and metals, exports, % y-o-y

-9.8

44.8

4.5

7.0

8.2

15.3

11.4

15.5

Ores and metals, imports, USDmn

4,759

4,369

5,779

6,289


6,769

7,953

8,788

10,204

Ores and metals, imports, % y-o-y

4.8

-8.2

32.3

8.8

7.6

17.5

10.5

16.1

Iron and steel, exports, USDmn

2,395


2,589

2,930

3,150

3,576

4,031

4,663

5,295

Iron and steel, exports, % y-o-y

7.2

8.1

13.2

7.5

13.5

12.7

15.7


13.6

Iron and steel, imports, USDmn

6,959

8,172

10,167

11,012

11,048

13,542

14,172

16,967

Iron and steel, imports, % y-o-y

-3.7

17.4

24.4

8.3


0.3

22.6

4.7

19.7

78,489 89,452

91,874

Agricultural raw materials, exports,
USDmn
Agricultural raw materials, exports, % y-oy
Agricultural raw materials, imports,
USDmn

Manufactured goods, exports, USDmn
Manufactured goods, exports, % y-o-y
Manufactured goods, imports, USDmn
Manufactured goods, imports, % y-o-y
Fuels, exports, USDmn
Fuels, exports, % y-o-y
Fuels, imports, USDmn
Fuels, imports, % y-o-y

26.2

14.0


2.7

98,383 112,654 124,875 145,703 163,012
7.1

14.5

10.8

16.7

11.9

83,710 97,013 102,206 110,872 125,294 140,987 161,530 181,741
13.2

15.9

5.4

8.5

13.0

12.5

14.6

12.5


11,353 14,709

16,092

17,012

16,959

20,155

21,003

24,731

29.6

9.4

5.7

-0.3

18.8

4.2

17.8

11,452 15,978


16,687

18,087

19,677

22,731

25,355

29,031

4.4

8.4

8.8

15.5

11.5

14.5

3.1

-8.6

39.5


e/f = BMI estimate/forecast. Source: UNCTAD, BMI

© Business Monitor International Ltd

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Vietnam Freight Transport Report Q4 2015

Table: Main Import Partners

2006

2007

2008

2009

2010

2011

2012

2013

7,391


12,710

15,974

16,441

20,019

24,594

28,786

53,458

16.5

20.3

19.8

23.5

24.0

23.5

25.8

31.9


3,908

5,340

7,255

6,976

9,761

13,176

15,536

23,196

8.7

8.5

9.0

10.0

11.7

12.6

13.9


13.8

6,274

7,614

9,378

4,248

4,101

6,391

6,690

11,978

14.0

12.1

11.6

6.1

4.9

6.1


6.0

7.1

4,702

6,189

8,240

7,468

9,016

10,400

11,603

11,575

10.5

9.9

10.2

10.7

10.8


10.0

10.4

6.9

1,441

1,951

2,633

826

860

970

970

8,315

3.2

3.1

3.3

1.2


1.0

0.9

0.9

5.0

TOTAL

44,891

62,765

80,714

69,949

83,365 104,510

111,640

167,791

TOTAL, top 5 countries, USDm

23,717

33,804


43,480

35,960

43,758

55,530

63,584

108,521

52.8

53.9

53.9

51.4

52.5

53.1

57.0

64.7

China, Mainland, USDmn
China, Mainland, USDmn, % of

total
Korea, Republic Of, USDmn
Korea, Republic Of, USDmn, % of
total
Singapore, USDmn
Singapore, USDmn, % of total
Japan, USDmn
Japan, USDmn, % of total
China,P.R.:Hong Kong, USDmn
China,P.R.:Hong Kong, USDmn, %
of total

% from top 5 trade partners

Source: IMF. N.B. Total exports is from Direction of Trade Statistics, consequently there may be some discrepancy with
data used elsewhere in this report.

Table: Main Export Partners

2006

2007

2008

2009

2010

2011


2012

2013

7,845

10,105

11,887

11,356

14,238

16,928

19,668

22,930

19.7

20.8

19.0

19.9

20.4


18.2

17.8

17.6

3,243

3,646

4,850

4,909

7,309

11,125

12,388

15,351

8.1

7.5

7.7

8.6


10.5

12.0

11.2

11.8

5,240

6,090

8,468

6,292

7,728

10,781

13,060

12,917

Japan, USDmn, % of total

13.2

12.5


13.5

11.0

11.1

11.6

11.8

9.9

Korea, Republic Of, USDmn

843

1,243

1,794

2,065

3,092

4,715

5,580

6,523


Korea, Republic Of, USDmn, %
of total

2.1

2.6

2.9

3.6

4.4

5.1

5.0

5.0

1,445

1,855

2,073

1,885

2,373


3,367

4,095

5,683

3.6

3.8

3.3

3.3

3.4

3.6

3.7

4.4

39,826

48,561

62,685

57,196


69,820

92,881

110,795

130,551

United States, USDmn
United States, USDmn, % of
total
China, Mainland, USDmn
China, Mainland, USDmn, % of
total
Japan, USDmn

Germany, USDmn
Germany, USDmn, % of total
TOTAL

© Business Monitor International Ltd

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Vietnam Freight Transport Report Q4 2015

Main Export Partners - Continued

TOTAL, top 5 countries, USDm


2006

2007

2008

2009

2010

2011

2012

2013

18,616

22,939

29,072

26,507

34,740

46,916

54,792


63,403

46.7

47.2

46.4

46.3

49.8

50.5

49.5

48.6

% from top 5 trade partners

Source: IMF. N.B. Total exports is from Direction of Trade Statistics, consequently there may be some discrepancy with
data used elsewhere in this report

© Business Monitor International Ltd

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Vietnam Freight Transport Report Q4 2015


Road Freight Forecast
BMI View: Strong foreign direct investment, infrastructure development and growing exports through 2015
are set to benefit the road freight sector in Vietnam. This will set y-o-y growth in terms of tonnage
transported by road on an upward curve with a forecast growth of 7.75% in 2015 up from 6.77% in 2014,
rising to 8.12% in 2016. Road freight companies look set to benefit in particular from falling fuel prices and
rising consumer demand, as they strive to offer economical alternatives to air and shipping freight.

Short Term

Vietnam will see private consumption remain broadly the same in 2015, which is why our road freight
tonnage handled forecast for the year does not differ so much from 2014. The rise in this mode will
predominantly occur due to lower fuel prices for truckers.

The Vietnamese economy is currently resting on a growth-inflation sweet spot, with consumer price
inflation (CPI) coming in at just 0.9% y-o-y in March (in part owing to the slump in global oil prices) versus
the peak of 23.0% in August 2011. Price stability and positive economic growth prospects will lend support
to the Vietnamese dong, while a richer domestic consumer continues to benefit the road freight sector,
hence our healthy growth forecast over the short term. The confluence of these factors will restore and shore
up investor confidence, enhancing Vietnam's attractiveness as a place to invest and do business in, which
should have a knock on effect on infrastructure, which could mean enhanced facilities for truckers and,
therefore, a boost for the road freight sector.

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Vietnam Freight Transport Report Q4 2015


Glowing Consumer Picture Impacts On Road Transport
GDP Per Capita (2013-2024)
6,000

12.5

4,000

10

2,000

7.5

2024f

2023f

2022f

2021f

2020f

2019f

2018f

2017f


2016f

2015f

2014

5
2013

0

Vietnam - GDP per capita, USD (LHS)
Vietnam - GDP per capita, USD, % y-o-y (RHS)

f = BMI forecast. Source: General Statistics Office, Asian Development Bank, BMI

Medium Term

Over our forecast period to 2019, we expect to see y-o-y average growth to come in at a healthy 7.79%, as
the sector goes from strength to strength. This is predicated on a glowing consumer picture, as well as
Vietnam's rising stature as an attractive place for investment. Looking ahead, we expect the economy to
continue growing robustly, on the back of greater foreign direct investment (FDI) inflows and ongoing
efforts by the government to improve the country's business conditions, which will all boost the road freight
sector as demand grows and increased investment improves Vietnam's reputation as a place to do business
in Asia.

Long Term

Vietnamese President Trưưng Tưn Sang stated on March 20 that his country values the growing relationship
with Thailand, which he believes will flourish in the coming years. Thailand is not currently one of

Vietnam's top five trade partners, but stronger links could change this over the long term, benefitting the

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Vietnam Freight Transport Report Q4 2015

latter's road freight industry as a result. Speaking at a reception hosted for Thai Deputy Prime Minister and
Foreign Minister Thanasak Patimapragorn in Vietnamese capital city Hanoi, Sang lauded the outcome of
the meeting of the Joint Committee on bilateral cooperation. Sang also expressed his gratitude to Thailand
for paying attention to the needs of the Vietnamese community in Thailand, saying that he hopes a bilateral
labour deal will be signed soon. Sang noted that the economic ties between the two nations were developing
strongly with many large Thai firms investing in the country, reported Intellasia/Vietnamnet.

Over the longer term, the Vietnamese government's decision to introduce tighter regulation to clamp down
on overloaded trucks, which will now result in firms having to procure additional vehicles to transport their
cargo, should promote driver safety and make the road freight sector more attractive as a direct
consequence. The decision by Vietnam's Ministry of Transport (MOT) to increase control and oversight of
overloaded vehicles so as to ensure driver safety is a positive development for the commercial vehicle (CV)
sector.

Table: Road Freight (Vietnam 2012-2019)

2012
Road Freight Tonnes (000)

2016f


2017f

2018f

2019f

722,156 765,070 816,857 880,142 951,611

1,026,523

1,105,191

1,188,832

Road freight tonnes, % y-o-y
Road freight tonnes-km (mn ton
km)

2013

2014

2015f

10.4

5.9

6.8


7.7

8.1

7.9

7.7

7.6

43,902

46,790

48,146

50,399

52,546

54,648

57,260

59,935

9.4

6.6


2.9

4.7

4.3

4.0

4.8

4.7

Road freight tonnes-km, % y-o-y

f = BMI forecast. Source: General Statistics Office of Vietnam, BMI

© Business Monitor International Ltd

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