Vietnam maintains third rank in international logistics opportunities

The six most promising logistics markets remained unchanged over year

The 2020 Agility Emerging Markets Logistics Index indicates that the group of six markets identified by survey respondents as having the most promising logistics markets was unchanged in 2020. India and China maintain a marked lead in this ranking as they do in the data-driven Index. Vietnam remains third as confidence matches the progress it has made in improving its infrastructure and domestic market in recent years, in addition to the export growth it has seen as trade shifts from China.

If businesses are going to relocate from China, Vietnam and India are the most likely investment destinations, according to 48 per cent of those surveyed. Mexico and Cambodia were the lowest-rated relocation options amongst survey respondents.

In addition, Vietnam also ranked 11th overall in the 2020 Agility Emerging Markets Logistics Index, down one spot against last year. In Southeast Asia, Vietnam ranked fourth, trailing behind Indonesia, Malaysia, and Thailand.

In line with survey respondents’ assertions, Vietnam currently appears to be the "winner" of the trade war as both air and sea imports to the US are forecast to increase 23 and 25 per cent, respectively, in 2019.

China’s largest export items (in terms of volume) to the US by sea via container was furniture, bedding, and lamps in 2018. This accounted for 14 per cent of sea freight volumes exported to the US. Goods from this product category were hit in the tranche of tariffs applied on $200 billion worth of goods, initially 10 per cent in September 2018 before rising to 25 per cent in May 2019.

As Chinese exports of these products to the US have fallen, Vietnam has benefitted, exporting 333 million kilogrammes more furniture to the US over the same period. Projecting the whole year at this level, Vietnam could export over 2.1 billion kg of furniture to the US. This would be the highest growth rate over this time period and comfortably the largest increase in absolute terms, according to the report.