Monday 11 September, 2017

Logistics was introduced to Vietnam around 20 years ago. Although logistics revenue remains relatively low at around 2-4% of GDP per year (while approximately 80% of the market is held by foreign multinational companies), the sector has grown rapidly at 20-25% per year. Logistics plays an indispensable role in production, circulation and distribution worldwide. It also supports the harmonious and sustainable development of seaports and the marine economy, contributing to a country’s socioeconomic efficiency. Logistics activities account for around 10-15% of annual GDP in developed countries in Europe, North America and the Asia-Pacific region.
The logistics development trend in this century is globalization based on modern information technology and e-commerce, together with widespread use of pull-based logistics management to gradually replace the traditional push method. The objective is to create added value, reduce transportation costs and expand outsourcing to professional logistics companies. In the context of global economic difficulties and domestic macroeconomic pressure, opportunities and challenges must be carefully considered before decisions are made regarding development of this emerging economic sector.

Container traffic is expected to grow by 17% per year and national export turnover is projected to reach USD 500 billion in the coming years. Sea freight costs are expected to move closer to global levels; transportation currently accounts for around 40-60% of Vietnam’s total logistics costs. The aim is to stabilize and develop logistics into an important industry contributing around 15% of national GDP annually. Challenges remain. Although Vietnam has around 1,000-1,200 logistics enterprises—more than Singapore and Thailand—about 80% have registered capital of only VND 1-1.5 billion. This limited capital base helps explain why Vietnamese companies hold only around 20-25% of the domestic logistics market. Vietnam’s logistics activities therefore remain fragmented, small-scale and insufficiently connected or professional, often limited to services such as forwarding, warehousing, tallying, customs clearance and short-haul transportation—in other words, subcontracted 3PL work for foreign companies. Transport infrastructure has only recently been upgraded or newly developed and still does not fully meet demand, while mechanisms, policies and the legal framework require further improvement at the macro level. These factors create implementation difficulties even though the market’s potential remains substantial and not yet fully exploited.