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LOGISTICS IN VIETNAM

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LOGISTICS IN VIETNAM

Currently, logistics services in Vietnam have a scale of about 20-22 billion USD/year, accounting for 20.9% of GDP of the whole country.

The average growth rate of the logistics service industry in recent years is from 16 to 20% per year. Recent statistics from the Vietnam Logistics Business Association show that there are more than 1,300 logistics enterprises operating in the country, including enterprises with foreign capital.

SMES

Enterprises providing logistics services in Vietnam are mostly small and medium enterprises (SMEs). The logistics industry is currently facing many challenges, especially in the context that Vietnam is signing many new-generation free trade agreements (FTAs).

Most only provide services for small supply chains in the territory of Vietnam such as: forwarding services, warehouse leasing, customs clearance, retail consolidation, and market share at ports…

Meanwhile, international transportation activities are undertaken by a minority of multinational companies and corporations.

What is Logistics?

Logistics and Supply Chain Management is a chain activity, it is a connected network of many activities that are involved in the production and supply of goods and services to consumers. In a word, it ensures the most efficient life cycle of a product and business operations.

Thus, it can be seen that the basic activities of Logistics include: receipt of goods, transportation, storage, warehousing, customs clearance, other paperwork, customer consultation, packaging, recording, marking, delivery, or other services related to the goods.

And by trading in these services, logistics businesses will receive remuneration from import-export businesses and individuals using the service.

Logistics in Vietnam will be improved

According to the Vietnam Logistics Service Enterprise Association, in 2022, Vietnam’s logistics industry has many positive signs of development, however, difficulties and potential risks remain.

Accordingly, the congestion of road transport, the shortage of containers, the lack of space, and the “escalating” price of sea transport as well as the explosive growth of air transport will be gradually solved, and the modes of transport will be gradually solved.

Transport will return to the right value when the COVID-19 epidemic is gradually controlled in 2022.
Logistics is an important service industry in the overall structure of the national economy, playing the role of supporting, connecting, and promoting the socio-economic development of the whole country as well as each locality, contributing to improving the competitiveness of the economy.

ABOUT VIETNAM SITUATION

Vietnam is considered a potential and attractive market for the development of the logistics service industry.
Regarding the development prospects of the industry in 2022, the Vietnam Logistics Business Association (VLA) assessed that the prospect of Vietnam’s economic development in the coming time will create impetus for the logistics service industry to develop based on two important factors:

One is that the world economy and Vietnam have a strong recovery supported by policies to stimulate growth.
Second, Resolution 128/NQ-CP on “safely adapting, flexibly and effectively controlling the COVID-19 epidemic” is the driving force for economic recovery and sustainable development.

In order to take advantage of opportunities for development, logistics businesses need to actively engage, effectively coordinate with each other, and find solutions from a policy and practical perspective to optimize all solutions within the scope of their potential body.

Enterprises need to be dynamic in choosing the right direction and response plan; promote digital transformation; strengthen links and cooperation with each other; calculate cooperation with large companies to be able to adapt flexibly, take advantage of advantages and development opportunities.