It cannot be denied that international shipping is always a huge challenge to anyone who is going to transport goods across international borders from Vietnam. With an upward trend in Vietnam sourcing nowadays, having an in-depth knowledge of common transportation methods has become more important than ever before. For this reason, this blog post aims to provide you with useful information about popular transportation modes in Vietnam and help you make a right decision in choosing the most suitable method for your freight.
Check out our main points in this post here:
1. 3 Most Common Ways for International Shipping in Vietnam
There are 3 main methods of Transportation in Vietnam, including Sea Freight, Air Freight and Overland (by Truck or Rail).
Sea Freight
Sea Freight is a form of transporting a large amount of goods by using carrier vessels. With huge competitive advantages like large transport scope, high transport capacity, and low cost, Sea Freight has become a go-to option for many businesses in Vietnam these days.
Nevertheless, there are still a number of downsides when shipping by sea. Particularly, this mode takes more time to reach the destination compared to other methods, making it less attractive to suppliers of time-sensitive products.
Sea transport is a favorable option for global shipping from Vietnam
In Vietnam, Sea Freight is the most used transportation mode thanks to its great advantages. According to the Representative of Vietnam Maritime Administration, ocean transport has performed more than 90% of international shipping in Vietnam, playing a pivotal role in Vietnam transport.
Furthermore, with a long coastline of 3,260 km and the well-evaluated system of international sea ports, Vietnam has successfully handled 107 million tons of export cargo and 121 million tons of import cargo in 2018, according to Vietnam Seaports Association.
Air Freight
Air Freight is a mode of shipping goods worldwide quickly by flying the plane loaded goods to another country. Despite the fact that Air Freight is the fastest shipping method, it definitely costs you a lot more than other modes do. However, it offers a variety of benefits for which the other ones cannot compete such as great speed, high level of security or reduced costs of warehousing, packaging.
Compared to sea freight, shipping by air is not really a favorable option for most people due to its too high price in Vietnam. Nevertheless, according to Mr. Do Xuan Quang, Director of Vietjet Cargo, in years to come, Vietnam air cargo exports have a lot of opportunities to develop due to the government’s tax reduction policies which will strongly promote the growth of air cargo.
Overland (By Truck/Rail)
In the aspect of international shipping, Road freight is not used as much as sea or air freight are in Vietnam. Instead, this method is mostly used in transporting goods to ports of export. However, if the distance is less than 1,000km across borders, it would be better to take advantage of road shipping due to its competitive prices.
Vietnam’s road system has been newly built and maintained regularly
In the latest report of Vietnam logistics in 2019, Vietnam has 154 national highways with the total length of 24,866 km. This road system has been newly built, repaired and maintained regularly, which increases the efficiency of national transport as well as global transport.
Concerning railway network, despite the fact that this type of transport has the national route (Hanoi-Ho Chi Minh route), which is called Thong Nhat, it is not much used since it is considered relatively backward and weak.
These are 3 main ways to transport goods in Vietnam. Each one has its own upsides and downsides, but you can combine these types of transportation to have the most efficient route for the shipping, which is called multimodal transport. Based on a number of factors, you can have a right choice for your coming freight when sourcing from Vietnam. Check out the following section to make your own decision.
2. How to choose an appropriate method for your international transport from Vietnam?
There are many elements for you to evaluate which transport mode is the most suitable one for your international shipping. Nevertheless, in this section, we will go through 4 key elements which need to be carefully considered when choosing methods of dispatch:
Type of goods
It is apparent that we cannot apply one transportation mode to all kinds of products. For example, perishable goods, which are easily going to decay in a short amount of time, should be delivered by air.
Another good example is dangerous goods, such as insecticides, flammable liquids or toxic substances and so on, should be shipped by sea or surface.
Geographical Location
Depending on the distance between the origins and destinations, we can have a different choice of dispatch mode.
Distance, Modal Choice, and Transport Cost. Source: The Geography of Transport Systems
The chart above illustrates the relationship among the distance, the cost and the modes of transportation. In detail, while shipping by road doesn’t cost you much in short distances, its cost, however, increases significantly when it comes to long distances. In contrast, from the distance D2, ocean freight could be considered as an optimal solution.
Cost
Costs always put a heavy pressure on exporters/importers’ shoulders. Therefore, constant consideration among dispatch modes is highly necessary. For instance, if you are going to ship goods with a small or medium-sized scale, there is a chance that the cost of shipping by air is the same as the one of road transport due to its added transhipment or forwarding cost. Therefore, it is highly recommended that you should group small orders for joint shipment and ship it in one dispatch.
Safety
As has been mentioned above, security is always considered when making choices among transportation modes. There is no doubt that air freight is the most secure method and it should, therefore, be applied into fragile products.
The main aim of shipping is to help the goods be received at the right time, right place and especially in the best condition. Consequently, despite the fact that the cost of shipping air is relatively higher than the others, you would be more relieved when receiving your goods in the safest condition.
It is apparent that the challenges of international shipping could be hit by anyone who has a tendency to import/export globally. With all the necessary information provided above, I believe that you already had your own decision on which transport way is your best option when sourcing from Vietnam.
Have a look at Vietnam – A Promising Land for Sourcing to have an overview of Vietnam sourcing market.
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