Vietnam’s logistics sector seizes opportunities for further development
Logistics is a service industry likened to the “blood vessels” of the economy. It plays an important role in connecting and supporting businesses and production facilities, reducing costs and product prices, enhancing competitiveness and promoting socio-economic development.
An order of the green trend
Vietnam is located in a dynamically developing region where strong flows of goods converge. The economy has a high degree of openness (over 200%), with 17 free trade agreements (FTAs) signed and implemented with nearly 70 countries and territories, including most of the world's major economies.
This helps the country’s import-export turnover and e-commerce grow at double-digit rates every year, creating favourable conditions for logistics development.
The Vietnam Logistics Business Association (VLA) reported that the growth rate of Vietnam's logistics industry averages about 14% to 16%, with a scale of about 40-42 billion USD/year, one of the fastest and most stable growing service industries in recent years.
According to the World Bank's rankings, Vietnam currently ranks 43rd out of 155 countries in terms of logistics efficiency. It is among the top five countries in ASEAN (after Singapore, Malaysia, Thailand, and tied with the Philippines).
Notably, in 2024, Vietnam was recognised by international organisations in the top ten emerging logistics markets, top four globally for the Logistics Opportunity Index, and top 43 for the Logistics Performance Index.
However, Vietnam's logistics industry has not yet developed in proportion to the country's potential and advantages. Logistics costs are still high, and competitiveness is low.
The shortage of human resources, especially high-quality human resources, and the lack of infrastructure connectivity are also major "bottlenecks" hindering the development of logistics services.
In addition, changes in geopolitics and new business trends (such as supply chain shifts, cross-border e-commerce, green and sustainable development standards) and increasingly fierce strategic competition between major countries pose many challenges for developing the economy and logistics services.
The increasing requirements for green logistics and sustainable development bring both an opportunity and a challenge for Vietnam's logistics service industry.
According to Tran Thanh Hai, Deputy Director of the Import-Export Department under the Ministry of Industry and Trade, the trend of green supply chains and logistics is not only a need but has become an order for future development.
Green transport and green warehouses will help save energy, reduce emissions, and improve transport efficiency. Green packaging helps save raw materials, reduce production costs, and minimise negative impacts on the environment.
The technologies of the logistics industry are changing every day, and without taking action, businesses will fall behind. The technologies involve the application of blockchain to trace the origin, transparency of supply chains and smart contracts; automating service chains with self-driving cars, delivery robots, loading and unloading, or using big data to control inventory, optimise routes, forecast and assess risks.
Striving to become a regional logistics centre
To turn logistics into a high value-added service industry, Deputy Director Tran Thanh Hai asserted that it is necessary to improve the system of policies, laws, and institutions in a way that facilitates logistics development.
At the same time, it is essential to improve the competitiveness of logistics enterprises and encourage them to promote the application of technology and green logistics.
Most importantly, it is necessary to devise a strategy for developing logistics human resources, considering technology and human resources as the keys to creating breakthroughs for the industry in the future.
Dang Vu Thanh, Vice President of VLA, suggested that the Government should develop appropriate mechanisms to encourage investment in logistics infrastructure, support logistics businesses to invest in specialised warehouses and cold storage, develop inland waterway transport, and work out preferential policies for enterprises taking the lead in digital transformation and logistics.
A longer-term vision is needed to develop a communication plan, establishing Vietnam as a new centre of the Asian logistics service industry, along with building a mechanism to encourage the world's leading logistics service and distribution enterprises to invest in Vietnam.
The National Assembly approved a pilot free trade zone in Da Nang City in June 2024, which is the basis for researching new policies and laying the foundation for legalising regulations on free trade zones for the whole country.
The research, establishment, and development of free trade zone models need to be carried out soon to help the Vietnamese logistics industry further develop and deepen participation in the global logistics supply chain.
Vietnam is actively researching free trade zones around the world. Minister of Industry and Trade Nguyen Hong Dien said that free trade zones are one of the important competitive advantages and an effective tool for countries to maximise the benefits of the integration process.
In recent years, the free trade zone model has been successfully applied by many countries such as Singapore, China, the Republic of Korea, and the UAE, helping to reduce costs, increase product competitiveness, and optimise the flow of goods, improve logistics capacity, and attract foreign investment.
With a strategic geographical location and available potential, advantages in developing deep-sea port infrastructure, international airports, and road and rail transport hubs with countries in the region and the world, Vietnam has all the favourable conditions to develop large-scale and modern free trade zones.
