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Logistics answers in questioning times
It has taken 13 years for Panalpina to change from a representative office into a fully registered entity in Vietnam. Matthew Mahoney, Managing Director of Panalpina Vietnam and Panalpina Group CEO Monika Ribar tell VIR about the enormous market opportunities.
What does the group CEO’s first visit to Vietnam mean about Panalpina’s strategies in Asia?
Mahoney: Our CEO’s first visit signifies that Vietnam is extremely important in Panalpina Group’s growth plans in Asia. Since 1995 our company has had a presence in the Vietnamese market and in fact in December last year Panalpina was granted a licence to operate as a fully registered entity in Vietnam. This has allowed Panalpina Vietnam to be fully integrated into the Panalpina network and the subsequent benefits have flown onto our customers.
Vietnam has seen extraordinary periods of growth and our company has been fortunate enough to participate in this exciting period. As we see more and more companies moving their production into Vietnam from surrounding Asian countries, it is important to leverage our expertise to add value to customers in the local market.
We have a very strong market presence in all emerging markets and Vietnam is no exception. As a global company we will continue to support and improve our presence in Vietnam for our customers.
What opportunities do you see for Panalpina and the logistics service sector as a whole in Vietnam during this tough time?
Ribar: We believe the long term outlook for Vietnam is very positive. Since Vietnam joined the World Trade Organization in 2007, there have been significant amounts of direct foreign investment pumped into the economy and as a logistics company we see enormous opportunities in this market.
Vietnam like many other emerging markets looks to companies like Panalpina for supply chain solutions that will provide them with a market advantage. Fortunately Panalpina has a diverse cross section of customers and our focus in addition to our core freight forwarding business will be in areas such as supply chain management, projects and oil and gas.
How has the Vietnam’s forwarding and logistics industry been affected by the global turmoil?
Ribar: Our industry like most others has been affected by the turmoil. When the orders from the consumer markets of the world slowed, the manufacturing countries like Vietnam are also affected. In these times customers look for improved value and optimal solutions in their supply chain. Logistics is not one solution fits all and this is where a good logistics company provides their invaluable worth.
On the positive side, we are seeing more and more projects coming on line in Vietnam in areas such as telecommunications, energy and industrial sectors. The activities in these areas have somewhat softened the impact in the slowdown of the traditional Vietnamese export market.
What makes Panalpina different from others in Vietnam?
Ribar: Vietnam is one of the manufacturing engines of the world, consequently logistics providers are critical to Vietnam’s success. Panalpina is somewhat different to its competitors with its “asset light model” we do not own large warehouse sites or trucking fleets, rather we use our skill base of selecting and managing best-in-class local providers to enhance our services and to reduce our cost base.
Our local providers are critical in helping provide our customers with end-to-end solutions. During economic down and up swings we can adapt quickly without such fixed assets.
Panalpina is one of the world’s leading providers of forwarding and logistics services, this allows us to leverage our buying power with our partners to ensure our core services are competitively priced. We believe our strength is our people and this is very much a cliché. The Panalpina Vietnam staff turnover since the start of 2007 is lower than 5 per cent.
How can the Vietnamese government leverage the logistics sector?
Ribar: Vietnam has been growing at such a rapid pace that a slowdown for a short period could be a blessing in disguise. Perhaps it in fact gives the government an opportunity to review and focus on the massive infrastructure projects and reforms in a better light than an economy that at times was growing at plus 20 per cent.
We certainly agree with the government reforms for ports, airports, roads and rail infrastructure. Reforms, particularly in areas such as customs, ports, airports and other related areas connected to the logistics industry needs to have priority as trade is a major part of Vietnam’s future.
vietnamnet, vir
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