Vietnam’s logistics market is ranked highly

Mr. Tran Thanh Hai – Deputy Director of the Import-Export Department (Ministry of Industry and Trade) said that despite facing many challenges in 2023, the logistics industry is still making continuous efforts to regain growth momentum.

In 2023, the United States will continuously increase interest rates, which will have a negative impact on the USD exchange rate, global inflation, and strong fluctuations in energy and essential food prices. High USD interest rates along with competition between major economies also affect the movement of FDI capital flows and lead to major changes in the financial and monetary policies of major economies in the world. gender.

Mr. Tran Thanh Hai commented that the above factors all affect the development of Vietnam’s logistics service industry. However, Vietnam’s logistics service industry still strives to overcome difficulties to maintain stable growth and high rankings in the global logistics performance index rankings.

According to a World Bank report published in 2023, Vietnam ranks 43rd in the logistics performance index (LPI – Logistics Performance Index), among the top 5 countries in ASEAN, after Singapore, Malaysia, Thailand and the same location as the Philippines. The average annual growth rate of Vietnam’s logistics market is 14-16%, the proportion of businesses outsourcing logistics services is about 60-70%, contributing about 4-5% of GDP.

Vietnam’s logistics industry is expected to grow quite well by 2024

In 2024, it is forecast that the world economy will gradually recover, although the pace is still slow. Even in the last months of 2023, Vietnam’s import and export scale is increasing again, higher than the first months of the year. This is an opportunity for logistics service businesses to find orders and restore business.

Mr. Tran Thanh Hai also said that the trend of shifting investment, especially from China to other countries, including Vietnam, will create new impetus for industrial production, creating more supply of goods for Services of Logistics. In particular, the attention of the Government, ministries, branches and localities to logistics services is contributing to improving infrastructure conditions and business environment, helping our businesses have favorable business conditions. more beneficial.

In 2023, the Vietnam Logistics Services Business Association (VLA) announced a set of provincial logistics competitiveness indexes. Accordingly, City. Ho Chi Minh is the locality with the highest logistics competitiveness in the country. This is also an advantage because the city. Ho Chi Minh is home to many businesses in this field.

According to the most recent business survey data, Vietnam has 34,476 logistics service businesses with a total of 563,354 employees. The logistics market has the participation of more than 5,000 businesses providing 3PL logistics services, including 100% foreign-owned enterprises providing cross-border logistics services, with big names in the list of 50 The world’s largest logistics companies such as DHL, Kuehne + Nagel, DSV, DB Schenker…

However, Vietnamese businesses are mainly small, limited in scale in both capital and human resources as well as international operating experience, and there is no connection between stages in the logistics supply chain and between logistics service businesses. with import and export businesses. Vietnamese logistics businesses provide mainly domestic logistics services such as: Domestic transportation, forwarding, warehousing, customs declaration, goods inspection, space rental services on ships… .

However, compared to foreign businesses, Vietnamese businesses currently hold a lot of infrastructure and assets serving logistics activities (logistics centers, warehouses, seaports, inland ports, airports, etc.). railway, rolling stock, truck…). At the same time, it has the advantage of understanding domestic business practices and customers, but operates alone, has limited financial and administrative capacity, only serves certain segments, and lacks connection. throughout to provide integrated logistics services.

Logistics businesses need to proactively shift towards “going green”

However, commenting on the logistics market in 2024, Mr. Tran Thanh Hai said that competition to obtain orders in the logistics industry becomes more fierce. In addition to competitive pressure on services, new international and domestic standards on the environment, traffic safety, and labor safety also put logistics service businesses in front of innovation requirements.

_{Vietnamese logistics businesses need to proactively invest and transform production and business models towards “greening” to improve competitiveness.}

Global logistics businesses when outsourcing services require emission standards. This requires logistics businesses to proactively invest and transform production and business models towards “greening”, improve competitiveness, and ensure sustainable development. In addition, it is necessary to strengthen links between logistics business associations and industry associations, between logistics enterprises and production and business enterprises…