Discussing the latest insights into Vietnam's logistics market

October 04, 2023 | 18:19
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Vietnam's logistics industry is seeing significant growth due to the country's expanding manufacturing and e-commerce sectors. Edwin Chee, COO of SEA Logistics Partners (SLP) Vietnam, shared with Thanh Van his insights into the domestic logistics market and the company's plan to tap into this growth.
Uncovering the latest insights into Vietnam's logistics market

What are SLP's insights for the logistics industry to adapt and adopt global best practices?

Our parent company, GLP, is a renowned global entity engaged in the creation, development, and operation of logistics real estate, spanning 17 countries across the globe. As such, we have gleaned several insights from our global operational experience that GLP-SLP believes Vietnam should prioritise.

Firstly, Vietnam should focus on enhancing logistics infrastructure, including transportation networks encompassing road, rail, air, and sea connections. Investments in smart warehouses, distribution centres, and modern intermodal facilities will streamline operations and enable more efficient movement of goods.

In addition, technologies such as the Internet of Things (IoT), AI, data analytics, and automation can significantly boost operational efficiency, inventory management, route optimisation, and customer service. Therefore, Vietnam should encourage and facilitate the application of these technologies, backed by investments in modern infrastructure to enable effective logistics operations.

It is also vital to invest in training and educational programmes, both technical and managerial. This will cultivate a pool of professionals equipped with the knowledge and expertise required to manage modern logistics operations.

Another trend in the logistics sector is sustainable development. Embracing environmentally friendly practices and investing in green technology contributes to environmental conservation and enhances cost efficiency and competitiveness. This involves optimising transport routes, reducing emissions, adopting alternative energy sources, and promoting the principles of a circular economy.

Moreover, Vietnam can consider offering investment incentives and tax reduction policies to entice more domestic and foreign investment in the logistics sector. This may include establishing special economic zones or industrial areas with preferential rates for technology adoption, research and development, and more.

Regarding industry collaboration and integration, encouraging partnerships, alliances, and the exchange of information among logistics service providers, government entities, and other relevant organisations should promote cohesion within the ecosystem. Industry associations play a pivotal role in facilitating cooperation and knowledge-sharing.

Lastly, Vietnam needs to prioritise regulatory reform to streamline procedures, reduce barriers, and create a favourable business environment for logistics companies. Clear and transparent regulations will draw in more investment, foster increased growth in the logistics industry, and facilitate cross-border trade.

Could you shed some light on SLP's plans for the future?

Since opening in Vietnam in 2020, SLP has rapidly expanded its operations to encompass over one million square metres of modern, high-quality warehouse space across nine projects strategically located in industrial parks around Hanoi and Ho Chi Minh City. These locations include Bac Ninh, Haiphong, Long An, and Vinh Long. We remain committed to further enlarging our portfolio of modern warehouse projects in key areas, which may involve acquiring or developing new assets in pivotal logistics hubs to meet the escalating demand for state-of-the-art logistics facilities and advanced technologies.

In addition to our investments in developing warehouses, we can construct and advance various other types of factory and logistics infrastructure tailored to meet market and customer-specific requirements. SLP boasts significant advantages in scale and network, enabling us to provide robust support to our customers as they expand their operations.

Furthermore, in response to mounting environmental concerns, we have already initiated investments in various initiatives to reduce carbon emissions, conserve non-renewable resources, and harness renewable energy sources to minimise our impact on the environment and the communities in which we operate. Our focus is on nurturing relationships with environmentally conscious partners and suppliers while delivering sustainable solutions.

Additionally, we will leverage the knowledge and experience of our global partners to facilitate connections between international customers and our business network in Vietnam. Our unwavering commitment is to provide international customers with an exceptional experience and to meet their specific business requirements within the Vietnamese market.

Discussing the latest insights into Vietnam's logistics market

Last year, SLP Vietnam established the largest logistics development fund of over $1.1 billion. What are the primary purposes of this fund?

The GLP Vietnam Development Partners I fund stands as one of the most substantial logistics development funds in Southeast Asia. The primary focus of the fund is centred on the continued expansion and advancement of logistics projects in Vietnam.

The fund's objectives encompass investment in existing asset acquisitions, the inception of new projects from the ground up, and the application of cutting-edge technologies to modernise logistics facilities. This modernisation aims to enhance product quality and provide comprehensive solutions for the logistics industry.

SLP expects the fund to play a pivotal role in supporting our strategic endeavours to broaden our presence in new geographical regions and penetrate deeper into markets characterised by high demand, particularly those with robust growth potential in the logistics sector.

What does SLP Vietnam offer to clients in sectors poised for robust growth in the near future who may require adaptable and scalable services?

Currently, SLP accommodates clients in both the e-commerce and retail sectors, our pivotal strategic customer segments. To address the dynamic requirements of these groups, SLP stands prepared with a range of well-suited and flexible solutions as follows:

First is our modern pre-built logistics facilities. SLP's state-of-the-art logistics facilities are meticulously designed and constructed to align with the specific demands of retail and e-commerce enterprises. These facilities adhere to rigorous standards, feature adaptable layouts, and can be expanded as needed. SLP's warehouse projects are strategically situated at key logistics hubs, optimising supply chain efficiency and seamless goods circulation.

Second is our custom-tailored solutions. Recognising the unique operational needs of each e-commerce and retail tenant, SLP Vietnam offers tailored warehouse solutions. These solutions involve the custom design and construction of facilities to match individual tenants' requirements precisely.

Third is technology and innovation. Backed by the global GLP network, SLP possesses expertise and advantages in implementing technology and innovation to enhance the operational capabilities of its logistics facilities. Smart warehouse solutions, bolstered by IoT devices, robotics, and automation systems, facilitate inventory management more efficiently, along with order fulfilment and door-to-door deliveries.

Fourth is flexibility and scalability. Whether tenants require short-term or long-term leases, SLP offers flexible lease terms and adaptable spaces that align with their growth and expansion strategies. This scalability enables tenants to align their operations with market demands and seasonal fluctuations.

SLP and GLP focus on ESG integration SLP and GLP focus on ESG integration

SEA Logistic Partners (SLP) and its joint venture partner GLP have incorporated strict environmental, social, and governance criteria in their strategies and due diligence to ensure sustainable development across their operations in Vietnam.

SLP commences construction of its third project in Vietnam SLP commences construction of its third project in Vietnam

SLP has officially commenced construction of the first phase of the SLP Park Xuyen A in My Hanh Bac commune in Long An province's Duc Hoa district on February 24.

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Kent Yang, founding managing partner of SLP– an industry and logistics development and operation platform backed by GLP – spoke with VIR’s Van Ngoc about the logistics facilities and technology-led solutions that they provide in the Vietnamese market.

By Thanh Van

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