Factors Contributing to the Effective Development of the Logistics and Supply Chain Management Sector in Vietnam

DNHN - Logistics and supply chain management companies. In light of the country's economic growth and industrialisation trends, the logistics sector in Vietnam is developing strongly and creating many opportunities for businesses in the industry.

The rapid growth of the logistics sector in Vietnam

Currently, Vietnam is becoming one of the fastest-growing economies in the Southeast Asian region. This growth means increased export and import activities, creating a growing demand for logistics services.

Logistics is one of the fastest-growing sectors in Vietnam in recent years. The driving force behind this growth is the stable economic growth, the boost in manufacturing activities, and the boom in e-commerce.

The goal of developing the country based on an export-based economy is another reason why the logistics system plays an important role in supporting economic growth and facilitating trade. As evidence, Vietnam’s total import and export turnover of goods in the first 9 months of 2023 nearly reached the 500 billion USD mark.

The air, sea, and road networks are the main contributors to the freight transport picture. In 2022, Vietnam’s seaport system handled approximately 733.18 million tons of cargo, an increase of 4% compared to 2021. Container throughput through the seaport system reached approximately 25.09 million TEUs, an increase of 5% compared to 2021. Previously, in 2021, the volume of goods transported by road reached 1.2 billion tons.

The Vietnamese logistics market has the participation of some small and medium-sized enterprises providing low-value services. Domestic enterprises compete fiercely with each other, but overall, the Vietnamese logistics market is leaning towards foreign enterprises (accounting for up to 3/4 of the total revenue of the whole industry).

More than 30 companies providing international logistics services such as DHL, FedEx, Maersk, etc. have a presence in Vietnam. On the domestic enterprise side, there are Vinalines, Petrovietnam Transport, Viettel Post, etc. These enterprises provide some services such as express delivery and warehouse leasing.

Accordingly, the Government has been promoting investment in transport infrastructure, including seaports, roads, railways, and aviation. This helps improve transportation capacity and reduce logistics costs.

In addition, Vietnam has signed many free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and the EVFTA with the European Union. This opens up great opportunities for logistics businesses to take advantage of the international market and expand their business operations.

Focus on using technology in Vietnam's supply chain management

It is necessary to promote technological innovation, logistics enterprises in Vietnam focus on applying information technology and artificial intelligence to supply chain management. The use of warehouse management systems, transportation tracking, and online services helps improve efficiency and optimise operations.

Which, environmental management and promoting sustainable development have become an important trend in the logistics sector. Businesses are looking for ways to reduce emissions, use renewable energy, and use environmentally friendly means of transportation.

In addition, despite significant development, the logistics and supply chain management market in Vietnam still needs to overcome some challenges. Issues such as traffic congestion, lack of competitiveness, lack of high-quality human resources, and complex customs procedures still need to be addressed to improve the efficiency and competitiveness of the industry.

Opportunities and directions for development

Vietnam is a country with great potential to develop various logistics services such as agricultural logistics, food logistics, medical logistics, and e-logistics. This opens up opportunities for businesses to focus on specific areas to meet the diverse needs of the market.

Integration into the global supply chain is an important trend. Logistics businesses in Vietnam can take advantage of their favourable geographical location and transportation capabilities to become an important link in the regional supply chain.

To meet the development of the logistics industry, it is necessary to strengthen the training and development of high-quality human resources. This helps improve the capacity of high quality. This will help improve management capacity and expertise in the industry. In particular, new technologies such as artificial intelligence, blockchain, and the Internet of Things have the potential to transform the logistics industry. Many businesses invest in researching and applying these technologies to improve management and operation processes.

Thus, the logistics and supply chain management market in Vietnam is developing strongly and has great potential. Economic growth, infrastructure investment, international cooperation, and technological innovation play an important role in promoting the development of this industry. However, many challenges still need to be overcome and development opportunities need to be seized. To achieve sustainable development, it is necessary to strengthen cooperation between the Government, businesses, and other stakeholders to build an effective and competitive logistics and supply chain management system.

Nghe Nhan