Vietnam Air Freight Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2024-2032)

Vietnam Air Freight Market Growth

In 2022, the volume of air cargo traffic between Southeast Asian nations recorded a year-on-year growth of 17%, rising from the annual average of 15% over the past 30 years. As an increasing number of global companies shift their manufacturing operations from China to Vietnam, the nation is expected to become a leading producer of textiles, consumer electronics, and other products.

In 2019, Vietnam’s air cargo industry accounted for 25% of the overall value of international exports of agricultural products, which generated a turnover of USD 25.5 billion. In 2022-2023, the government of Vietnam introduced a socio-economic plan for socio-economic recovery and development under which aviation enterprises were entitled to enjoy a 2% rate of interest on loans provided by commercial banks and a reduction of 50% in environmental protection tax. This further bolstered economic recovery and is expected to drive the market growth over the forecast period.

Vietnam’s aviation industry has generated over 2.2 million jobs and contributed nearly USD 12.5 billion to its domestic GDP. In 2021, Vietnam’s total exports recorded a year-on-year surge of 20% to reach USD 336 billion. This led to a 21.3% increase in the volume of international air freight from Vietnam, as per the CAAV (Civil Aviation Authority of Vietnam). As the volume of trade between the United States and Vietnam soars, the demand for air freight services is expected to rise steadily over the forecast period.

Key Trends and Developments

Influence of Large Foreign Players; Upgradation of Airport Infrastructure; Benefits Gained from Regional Initiatives; and Increasing Volume of Trade with the USA are the Major Trends Impacting the Vietnam Air Freight Market Growth

July, 2024

Amidst the global recall by PW (Pratt & Whitney) engines integrated with A321 NEO and Airbus A320 aircraft, the Civil Aviation Authority of Vietnam urged domestic airline operators to boost their capacities to handle rising passenger traffic.

May, 2023

Government agencies report that the construction of phase one of Vietnam’s largest international airport (known as the Long Thanh International Airport) is expected to be over by 2026. The airport is expected to handle 1.2 million tons of cargo annually upon completion.

February, 2023

Vietnam is making significant investments in the expansion of its road infrastructure, with the Van Phong-Nha Trang Expressway Project, Khanh Hoa-Buon Ma Thuot Expressway Project-Phase 1, and the Nha Trang-Cam Lam Expressway Project expected to be completed by 2025.

June, 2021

Imex Pan Pacific Group (IPPG) announced its plans to invest VND 2.4 trillion to launch Vietnam’s first domestic cargo airline. This is expected to reduce air freight charges and ensure even competition with foreign players. The company expects to transport 115,000 tonnes of cargo in its first year to generate a revenue of USD 71 million.

Influence of Large Foreign Players

Nearly 88% of Vietnam’s air freight industry is dominated by foreign multinational companies like FedEx, DHL, and Cathay Pacific Cargo.

Upgradation of Airport Infrastructure

The international airports of Noi Bai and Tan Son Nhat possess highly automated warehousing infrastructure to handle large volumes of cargo. As major companies bolster their investments in synchronising warehousing infrastructure, the market is expected to grow significantly over the forecast period.

Benefits Gained from Regional Initiatives

As per Vietnam’s Ministry of Transport, the ASEAN Open Skies agreement has favoured the growth of the domestic air freight industry by eliminating fare control, ensuring capacity restriction, and limiting the frequency of regional flights.

Increasing Volume of Trade with the USA

In 2022, the volume of trade between the United States and Vietnam reached a size of $142.1 billion. The former imported nearly $128.4 billion of goods and services while exporting $13.8 billion.

Vietnam Air Freight Market Trends

The US exports of goods to Vietnam recorded a year-on-year surge of 3.0%, reaching around $11.4 billion in 2022. During the same period, Vietnam exported $127.5 billion worth of goods to the USA, recording a year-on-year surge of 25.1%. The export and import of services from Vietnam surged by 26.1% and 88.0% respectively, indicating the rising importance of Vietnam as a crucial trade partner of the USA. This is expected to drive the volume of air freight between the two nations over the forecast period, thereby favouring the market growth.

Vietnam Air Freight Industry Segmentation

Vietnam Air Freight Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Market Breakup by Service

• Freight
• Express
• Mail
• Others

Market Breakup by Destination

• Domestic
• International

Market Breakup by End Use

• Private
• Commercial

Vietnam Air Freight Market Share

Based on service, the market is segmented into freight, express, and mail, among others. Freight dominated the market, representing 64% of the overall market share in 2023. Over the forecast period of 2024-2032, freight is projected to grow at a CAGR of 7.1% due to its increasing demand for commercial purposes.

Leading Companies in the Vietnam Air Freight Market

Since foreign players dominate over 80% of the domestic air freight industry, local airline companies are expected to enhance their cargo handling capacities to beat rising air freight fares and break the monopoly of foreign players. This is expected to drive the demand for air freight in Vietnam over the forecast period.

• Deutsche Post AG
• DB SCHENKER
• FedEx Corporation
• Kuehne + Nagel Management AG
• Transimex Corporation
• APT International Co. Ltd.
• Aviation Logistics Corporation
• Bee Logistics Corporation.
• Alphatrans Co., Ltd.
• Nissin Logistics VN Co., Ltd.
• Others

The comprehensive report looks into the macro and micro aspects of the market. The EMR report gives an in-depth insight into the market by providing a SWOT analysis as well as an analysis of Porter’s Five Forces model.