DEVELOPING LOGISTICS SERVICE IN VIETNAM
Vietnam’s logistics services – freight forwarding, transportation, and inventory services – began to develop in the 1990s. Logistics has now become an important economic sector in Vietnam. In the next decade Vietnam could reach an export-import turnover of 200 billion USD per year.
Vietnam earns US$22 billion a year from logistics services. The sector’s annual growth rate has been 16 to 20% in recent years. According to World Bank rankings, Vietnam ranks 64th out of 160 countries in logistics development and fourth in ASEAN after Singapore, Malaysia, and Thailand.
Logistics is one of Vietnam’s fastest growing and most stable services. Recent statistics from the Vietnam Logistics Association show that more than 1,300 logistics enterprises are now operating in Vietnam, including foreign-invested firms.
Most logistics service providers in Vietnam are small or medium-sized enterprises. Major firms like Transimex Saigon Corporation, Sai Gon Newport Corporation, Gemadept Corporation, and Transport and Chartering Corporation (VIETFRACHT) specialize in freight forwarding, loading, and uploading mainly in Ho Chi Minh City and Hanoi. There are 25 multinational enterprises operating in these areas. The rest are domestic small and medium-size enterprises and mainly work for international companies.
Logistics service providers in Vietnam have set up business relations with the US, the EU, ASEAN, Japan, China, and the Republic of Korea. In recent years, logistics has played an increasingly important role in economic development and international economic integration.
Phuong Lan, General Director of the Amerasian Shipping Logistics Corporation (ASL), said “Logistics is a support pision of the import and exports sector. When an economy grows, with an increasing volume of imports and exports, the workload of the logistics industry will also rise. Most logistics companies in Vietnam are small or medium-sized enterprises. But since Vietnam joined the WTO, the majority of Vietnamese logistic enterprises, which are mostly young, dynamic, and quickly adaptable companies, have grown.”
According to the Vietnam Maritime Administration, shipping is the most important area of logistics. But Vietnamese enterprises handle just 18% of the total import/export volume. The rest is done by foreign businesses.
Tran Thanh Hai, deputy head of the Import-Export Department of the Ministry of Industry and Trade, said Vietnam is poised for a logistics breakthrough.
“First, we need to improve the legal framework in line with the state management mechanism and adopt policies that support the industry’s growth. Second, it’s important to develop transportation infrastructure – bridges, roads, railway stations, ports, warehouses, and logistics centers,” Hai emphasized.
The government recently approved an action plan to enhance the competitiveness and growth of logistics services in Vietnam by 2025.