Vietnam develops logistics services for exports

Logistics in Vietnam is gradually improving, helping domestic exporters and importers cut costs and increase their competitiveness against foreign rivals.

Vietnam now has more than 1,300 logistics firms including foreign companies. The domestic logistics market is estimated at US$22 billion per year, accounting for almost 21% of the national GDP.

The annual World Economic Forum’s Global Competitiveness Report shows that Vietnam is ranked below many other regional countries because of lagging transportation services.

According to the World Bank, Vietnam’s logistics ranks 64th of 160 countries around the world and 4th within ASEAN after Singapore, Malaysia, and Thailand. Vietnamese logistic companies are mostly small or medium-sized, scattered in different areas and lacking connectivity.

“A lower transportation volume makes logistic costs in Vietnam more expensive than many other countries. It costs about US$40,000 for logistics services in a populated area in the UK but the figure in Vietnam can reach US$140,000,” said Tran Anh Vuong, Secretary General of the Vietnam Private Economic Forum.

Tran Thanh Hai, Deputy Director of the Export-Import Department of the Ministry of Industry and Trade, said Vietnam has sufficient conditions to develop its logistics industry thanks to its bustling export-import market whose revenues exceeded US$300 billion last year. Improving domestic logistic services will create a major breakthrough for exports.

“First, a legal framework for the logistics sector should be completed along with more policies to support its growth. Second, we’ll upgrade transportation infrastructure ranging from bridges, roads, stations, and ports to warehouses and logistics centers,” Hai said.

The Prime Minister recently issued a decision to boost the competitiveness of Vietnam’s logistics service by 2025, under which logistics will contribute 8-10% of GDP to make Vietnam one of the world’s 50 leading logistics services providers.

“We hope that logistics companies will receive the most favorable conditions to operate efficiently, including access to preferential loans. This is the foundation for SMEs to run well,” said Chairman of the Vietnam Logistics Association (VLA) Le Huy Hiep.