Vietnam becoming key market for big-thinking logistics groups

Logistics groups say that a successful pandemic vaccination strategy will help them expand operations, Photo: Le Toan

Kevin Burrell, managing director of Maersk for Vietnam, Cambodia, and Myanmar, expects current market conditions to continue into the second quarter, leading to a strong first half of the year with normalisation to occur early in the second half.

“It is highly uncertain whether goods consumption will continue to drive the demand for logistics and container flows, especially as the demand for services normalises. The 2022 outlook for freight rates mainly rests on when market disruptions will normalise,” Burrell said. “The government is aiming to open the country calmly and steadily. As Vietnam has achieved an excellent vaccination level, this will create a good stimulus to the already strong economy.”

Maersk will continue to invest in its logistics services to facilitate its vision of becoming a global integrator for logistics. This is approached from the two angles of organic expansion and acquisitions. The acquisition of Senator International, for instance, will strengthen its air freight capabilities, with strong uplift from Hanoi and Ho Chi Minh City to European destinations.

Also, the recent announcement of the intended acquisition of LF Logistics will strengthen its omnichannel fulfilment and bonded warehousing solutions with infrastructure in Hanoi and Ho Chi Minh City. These capabilities add to the already strong international supply chain management and domestic warehousing and distribution capabilities that exist today.

Further, Maersk also expects to make investments in the future in line with its organic expansion of services, to meet customers’ expectations for end-to-end services in Vietnam.

Meanwhile, CapitaLand Development (CLD), the development arm of CapitaLand Group, has inked an MoU with Bac Giang People’s Committee to develop its first industrial and logistics park with township development. The complex is expected to cost over $1 billion in total.

Jason Leow, CEO of CLD, said, “Vietnam is one of our core markets, and we aim to accelerate our investment in the country over the next five years, deepening our presence. We continue to see opportunities to scale up our investments in township developments, especially in the fast-growing secondary cities, and further expand our interests in data centres, logistics, and industrial and business zones.”

Meanwhile, SEA Logistic Partners has commenced construction of SLP Park Xuyen A to supply warehouses to the Mekong Delta province of Long An. The project, which will cover an area of 84,000 square metres, is slated to be completed in the first quarter of 2023.

Lineage Logistics, one of the world’s top providers of temperature-controlled supply chain and logistics solutions, has announced that it is more than doubling the capacity of its Vietnam facility in the northern region. The facility will be extended from 8,000 to 20,000 pallet positions to satisfy rising demand from companies serving Vietnam’s burgeoning perishable food sector.

Over the last two years, nearly $3 billion has been poured into Vietnam’s logistics industry. The large influx of capital into the industry reflects the potential of Vietnam to become a logistics centre in the region and wider world, according to a report by the Ministry of Industry and Trade.

Jan Segers, general manager of Noatum Logistics Vietnam, said, “We do not see any problem in the supply chain of our customers. This year, we believe that Vietnam, which is still a growing market for outsourcing, will reach its expected GDP goals, and increases in foreign investment will help support Vietnam's recovery.”