In the ever-evolving global commerce landscape, Vietnamese enterprises are finding themselves at the heart of a new wave of opportunities. The world of international trade is characterised by its dynamism – constant changes in consumer behaviours, technological advancements, global economic shifts, and regulatory updates. Now more than ever, the ability to adapt and excel in this environment is vital for businesses seeking to thrive.
International shipping holds immense potential for the evolution of Vietnam's economic and industrial development, as evident from its burgeoning trade partnerships. Beyond expanding trade volumes and attracting investment, strategic benefits are also being realised as Vietnam transitions from low-tech manufacturing and primary goods exports to more complex high-tech goods like electronics, machinery, vehicles, and medical devices.
Growth Enablers: Vietnam’s Free Trade Agreements
Recent Free Trade Agreements (FTA) like the EVFTA and the Regional Comprehensive Economic Partnership (RCEP) play a key role in this shift. By diversifying sourcing partners through expansive trade networks and leveraging cost-efficient imports of intermediate goods from partner countries, Vietnam is boosting its export competitiveness. Recent data points to these strategic partnerships as integral drivers of Vietnam's economic development.
For instance, last year, the trade turnover between Vietnam and the European Union (EU) reached an impressive $76.3 billion, marking a year-on-year increase of 5.1%, as reported by the European-American Market Department under the Ministry of Industry and Trade (MoIT) and covered by Vietnam+. Such growth not only signals Vietnam's resilience and economic vigor but also cements its position as a key trading partner of the EU.
Likewise, the rapport between Vietnam and the United States (US) has seen substantial growth, the General Statistics Office (GSO) revealed. From a modest bilateral trade of US$450 million in 1994, the figure surged to US$77 billion in 2019, solidifying the U.S. as Vietnam's largest export market. Adding to this, Vietnam's trading relationship with China is on an upward trajectory. As of last year, Vietnam Trade Promotion Agency reported that bilateral trade between the two countries rose to a remarkable US$234.9 billion, making Vietnam China's primary trading partner within ASEAN and the sixth largest globally.
These partnerships not only facilitate increased trade and make Vietnam an attractive investment destination for exporters and importers, but they also enable the nation's continued transition from a low-tech manufacturing hub to a producer of complex high-tech goods. Examples of this transition are seen in companies like Vinfast, a Vietnamese conglomerate that is leveraging partnerships with global MNCs for technology transfer and know-how to produce advanced products like electric cars.
With these compelling benefits in mind, Vietnamese enterprises need to ensure their logistics and international shipping plans are well-equipped to support their global market expansion. The following are five essential tips to ensure your global shipping process is as efficient and smooth as possible.
1. Start by deciding on the right market for your products
Creating a successful international shipping strategy begins with a well-defined market plan. Consider this example: Suppose you are a Vietnamese enterprise planning to sell fashion accessories to the US. In this scenario, you'd need to conduct thorough research into various factors. Is your target market composed of direct consumers or business partners? If your focus is individual buyers, understanding demographics and purchasing habits becomes critical. Questions such as, are your buyers predominantly male or female? Are they adolescents, adults, or in the senior demographic? Do they lean towards online shopping or do they have a preference for physical, brick-and-mortar stores? These details play a significant role in shaping your business strategy.
Next, you'd have to understand the competitive landscape. How many competitors are operating in the same space, and what are their market shares? Do you know the distribution systems, logistics, and delivery models your competitors are using? Knowing this information can give you a better idea of the level of competition you're facing.
Potential barriers to entry are another aspect to consider. For instance, challenges faced by fashion accessories businesses could include maintaining product quality that meets the expectations of American consumers, competitive pricing in a saturated market, sufficient investment capital, or understanding and complying with local customs clearance as well as regulations.
Yet, as important as these specifics are, it's paramount to remember that the landscape of international trade is ever-changing and unpredictable. This was highlighted by the recent disruptions in the global supply chain due to the COVID-19 pandemic, which illustrated how external changes can suddenly make your primary target market less viable or even inaccessible. Therefore, a crucial part of your strategy should be adaptability and readiness for change. Developing contingency plans, such as considering alternative markets, will help your business remain resilient and agile in the face of unexpected shifts in the global market. This kind of forward-thinking can be the difference between succumbing to these challenges or using them as stepping stones for growth.
2. Select shipping modes
For instance, international express delivery, typically taking two to four working days of transit times, depending on the specific destination. This shipping option offers a swift and efficient solution that businesses can leverage as a unique selling point to meet consumer demands. It's particularly relevant for shipments that are critical, time-sensitive, high-value, or urgently needed.
Let's consider a real-world scenario: imagine a company that relies on a specific imported electronic component to keep their production line operational. If that component suddenly fails and a replacement is urgently required to prevent costly production downtime, international express delivery becomes a critical solution. This service ensures the quick delivery of the crucial part, thereby minimising disruptions and potential losses.
There's no universal answer when it comes to devising cross-border shipping strategies for your business. Your chosen shipping mode should align with your delivery timeframes and business goals, as well as your customers' expectations and competitive landscape.
3. Plan your delivery frequency
The frequency of your deliveries plays a pivotal role in your shipping strategy. Regular shipments can help maintain a consistent presence in your chosen markets, even during periods of low demand. For instance, sending product samples, prototypes, or promotional materials to overseas partners during off-peak seasons can keep your brand front-of-mind and pave the way for future business opportunities.
After familiarising yourself with your business's regular shipping schedules, you can discuss various pricing solutions with your international delivery partner and establish the most suitable and convenient shipment pickup plan. This includes specifying when and where the courier company will collect your shipments. International express shipping companies like DHL Express Vietnam offer their business customers a shipping account, which comes with multiple benefits, such as preferential rates, a dedicated account manager, and customised shipping solutions.
On the other hand, it's crucial to be mindful of the demands of your operational capacity.our delivery schedule should also consider factors such as your production capacity, inventory management, and workforce availability. It might be beneficial to conduct an operational audit to understand the maximum frequency of shipments that can be handled without overstretching your resources.
A well-balanced delivery schedule is one that satisfies customer demands while remaining within the operational capabilities of your business. As such, we recommend businesses to constantly review and adjust their global shipping schedule in response to changing market conditions and customer preferences. This adaptability ensures your shipping strategy remains effective and relevant in the ever-changing landscape of international trade.
4. Pay attention to changes in international shipping policies and procedures
Staying abreast of changes in international shipping policies and procedures is essential for smooth operations. Customs authorities worldwide are increasingly stringent about compliance. However, these requirements are subject to change due to various factors such as political shifts, trade agreements, and regulatory updates. For example, according to the United Kingdom (UK) Parliament, traders are required to submit customs declarations for all imports and exports from as well as into the UK.
Being aware of changes in international shipping policies and procedures can prevent costly setbacks during the customs clearance process. Non-compliance can lead to significant issues such as shipment delays, penalties, or even confiscation of goods. Therefore, it is crucial for businesses to consistently update their knowledge of these requirements, focusing specifically on critical documents and forms which include:
- Air Waybills (AWB)
- Licences and Permits
- Commercial Invoices
- Certificate of Origin (COO)
- Export Declarations
- Insurance Certificates
