Vietnam has many opportunities to participate more deeply in the global supply logistics value chain. In particular, the current transportation system has been stretched and spread across all regions of the country.
As an essential service industry contributing to the circulation of goods from production to final consumers, Vietnam's average annual logistics growth rate is 14-16%, making an important contribution to promoting Vietnam's import and export activities.
However, Vietnam's logistics costs are still high, the connection of service industries is still inadequate... This requires synchronous solutions to clear bottlenecks, help improve competitiveness for the import and export sector.
Logistics cots are stil high
According to the assessment of the Vietnam Logistics Services Association (VLA), the growth rate of the logistics industry in Vietnam in recent years has reached about 14%-16%, with a scale of about 40-42 billion USD/year.
With an annual growth rate of double digits, this is one of the fastest and most stable growing service industries in Vietnam in recent times.
Ms. Nguyen Thi Mai Linh, Head of Trade Facilitation Department, Import-Export Department (Ministry of Industry and Trade) said that according to data from the General Department of Customs, in 2023, Vietnam's import-export turnover reached 681 billion USD, equal to 158% of the country's GDP, and in the first 10 months of 2024, Vietnam's import-export turnover reached 648 billion USD, an increase of 15.9% over the same period last year.
According to Standard Chartered’s latest forecast, Vietnam will be one of the main contributors to global trade growth, with export turnover expected to reach US$618 billion by 2030, growing at an annual rate of 7%. Import turnover by 2030 is expected to reach US$578 billion, increasing at an average rate of 6.9% per year.
“To achieve the above results, we cannot fail to mention the important multi-dimensional role, including both direct and indirect impacts of logistics activities on import and export turnover. Therefore, it can be affirmed that logistics is the lifeblood of the national economy and its subject is goods, which is an extremely important factor in trade and import and export activities,” said Ms. Nguyen Thi Mai Linh.
Mr. Nguyen Xuan Hung, Head of Logistics for E-commerce (Vietnam Logistics Service Enterprises Association) acknowledged that logistics enterprises are having a strong transformation in connecting, connecting, sharing and this is a new thing in the past 3 years.
Proof of this is that more and more Vietnamese enterprises are deeply involved in the import-export supply chain and more and more Vietnamese enterprises are demonstrating their capacity in providing logistics services in the domestic market.
“This is one of the results of the efforts from the Government level in creating a legal corridor as well as creating conditions for businesses; the efforts and determination of domestic enterprises themselves when investing and participating in this field,” said Mr. Nguyen Xuan Hung.
However, the VLA representative also pointed out a number of challenges, including that although infrastructure has been improved, the infrastructure to help businesses deploy logistics services and deploy goods circulation is still a huge challenge.
“We have many provinces and cities and are connected through many modes of transport. However, the connectivity between these modes is low. This is also one of the reasons for high logistics costs. Regarding services, it takes up to 7 days to transport a container of goods to the border. Enterprises have optimized the domestic stage, however, the problem is the service stage at both ends of the border,” Mr. Hung emphasized.
To clarify, from a local perspective, Mr. Pham Tuan Hai, Deputy Director of the Hai Phong Department of Industry and Trade, shared that Hai Phong's logistics services have achieved encouraging results in recent times. However, building Hai Phong into a regional and international logistics service center still faces some difficulties.
Specifically, the system of roads and intersections in the port area is still narrow, leading to traffic congestion. The waterway system has not yet fully promoted its supporting role for the road system. The railway system is still backward, not connecting with the ports in Dinh Vu area as well as the deep-water port area in Lach Huyen.
Furthermore, the system of warehouses and logistics centers in Hai Phong is still fragmented and small, and there is no large-scale logistics service area to support the exploitation of the seaport system.
“In Hai Phong city, there are over 250 enterprises registered to provide logistics services, of which about 30 logistics companies of multinational corporations such as DHL, UPS, FedEX… account for 70-80% of the logistics market share in Hai Phong. Domestic enterprises only play the role of secondary carriers or agents for foreign companies such as customs clearance, freight transport, and warehouse leasing. These are stages that create little added value in the logistics service supply chain. Moreover, there is still a lack of high-quality logistics human resources to serve the logistics industry in Hai Phong city,” said Mr. Pham Tuan Hai.
Clear the bottleneck
According to experts, Vietnam has many opportunities to participate more deeply in the global logistics supply chain. In particular, with the current transportation system that has been spread across all regions of the country, including all 5 transportation systems (railway, road, air, inland waterway, sea).
Along with that, logistics infrastructure including warehouses and logistics centers are constantly expanding in scale and are also widespread in all regions. The accompanying services of logistics enterprises today have been adapting very promptly and fully meeting the increasing demands of the market.
In addition, from the Government's perspective, in the 2022-2024 period, hundreds of thousands of billions of VND from the economic recovery and development program have been invested in important projects, key projects and especially, a significant part of which has been put into the transport infrastructure system. These are the lifeblood systems of the economy as well as the lifeblood of the logistics service industry.
Mr. Nguyen Xuan Hung said that logistics activities are the most obvious way to feel the activities of the economy. Whichever area is developing, which area has many factories, which area has a lot of goods circulation, logistics enterprises will immediately appear and build solutions to adapt.
To create "leverage" for this field, Mr. Pham Tuan Hai informed that Hai Phong city identified logistics services along with seaports as one of the three breakthroughs in the city's growth model.
In the immediate future, by 2025, Hai Phong will invest in building 1-3 more national-level logistics service zones with a logistics service growth rate of 30-35%/year, a contribution rate to the city's GDP of 20-25%, the rate of outsourced logistics services of about 60%, and the output of goods passing through the port of 300 million tons.
By 2030, Hai Phong strives to become a modern international logistics service center with all 5 transportation systems, prioritizing land funds to build logistics service centers of national and international stature, and basically completing the network of logistics centers in the area.
“The Department of Industry and Trade has advised the Hai Phong City People's Committee to submit to the Government for approval the Project to build and develop Hai Phong City into a modern international logistics center associated with international seaports, connecting with economic belt corridors. In addition, the Department of Industry and Trade is also promoting digital transformation and digitization of logistics services in Hai Phong City...,” said Mr. Pham Tuan Hai.
Meanwhile, Ms. Nguyen Thi Mai Linh said that the Ministry of Industry and Trade is expected to submit to the Government for consideration and signing of the Vietnam Logistics Services Development Strategy to 2030, with a vision to 2050 in the fourth quarter of 2024. After the Strategy is issued, the Ministry of Industry and Trade will issue an Action Program for implementation, in which it is expected that there will be 60 groups of solutions revolving around the issues that we are seeing regarding limitations and challenges. From there, it is possible to minimize the shortcomings, difficulties and obstacles in the recent past.
In addition to developing the Strategy framework, the Ministry of Industry and Trade also plans to complete the relevant legal framework, specifically the 2005 Commercial Law; Decree No. 163/2017/ND-CP of the Government regulating logistics services business.
These institutional frameworks need to be promptly revised to respond to the current context, thereby creating favorable conditions for businesses in implementing the Strategy to meet both domestic requirements and the increasingly high demands of the region and the world.
“With the participation of the entire political system, the determined efforts of businesses and associations, it is hoped that the development of the logistics service industry in the coming time will contribute to clearing the way for trade and import and export of goods,” said Ms. Linh./.
