Wednesday, 24 Jul 2019
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ECONOMY

Vietnam logistics market likely to hit US$87 billion in 2022

Updated at Wednesday, 10 Jul 2019, 14:34
The Hanoitimes - The development will be backed by increasing industrial activities, growing e-commerce, and stronger investment in logistics infrastructure.
Vietnam logistics and warehousing market is likely to reach US$86.7 billion by 2022 thanks to expanding industrial activities, growing e-commerce industry, continuous investment in infrastructure and logistics facilities, and consistent economic growth.
 
A port
A port
The logistics and warehousing market is expected to register a positive compound annual growth rate (CAGR) of 13.3% in the 2018-2022 period, according to Ken Research – a market research and consulting company based in India and the US.

Vietnam’s logistics sector is expected to escalate its way thanks to the following reasons. 

First of all, a good connection amongst the urban cities where a huge share of traffic is coming from the tier 2 and tier 3 cities. 

Modern technologies like enterprise resource planning, electronic data interchange, customs and accounting software, GPS, bar code system, radio frequency identification (RFID), automatic retrieval system, robotics, drones, among others are anticipated to improve the logistics services in near future. 

Macroeconomics has supported the sector’s growth with various free trade agreements (FTAs) signed between Vietnam and single economies or economic blocs which will boost the country’s trade relations in the long term.

Additionally, foreign investments are estimated to rise strongly in Vietnam as many logistics enterprises in ASEAN countries are keen to invest and have a better understanding of the laws, customs and culture of Vietnam. 

The country will focus on attracting investment in logistics infrastructure development, constructing regional and international logistics service centers, improving the efficiency of connection between Vietnam and other countries, thereby becoming a modern logistics hub in upcoming years, Ken Research said.

An overview on Vietnam’s logistics sector

Vietnam’s logistics and warehousing sector provides mix services including freight forwarding, warehousing, cold chain, express delivery, e-commerce logistics, and third party logistics for end users like foods and beverages, engineering equipment, retail, electronic devices, textile and footwear, wooden products and others in Red River Delta, Da Nang, Ho Chi Minh City, and other regions.

Vietnam’s freight forwarding market covers both normal and express delivery with freight movement like sea freight, road freight, air freight, and rail freight participated by international and domestic freight forwarding in flow corridors namely Asian Countries, European Countries, America and African Countries. 

Vietnam’s express market is formed by international and domestic express by air and ground express, and by market structure like B2C, B2B and B2C.

Meanwhile, Vietnam e-commerce market is formed by speed of delivery with two-day delivery, one-day delivery, same day delivery, within 2 hours, and others; by area of delivery such as intercity, and same region; and by payment method like cash on delivery and others.

Major players include DHL Express Vietnam, FedEx Vietnam, GHN, Damco Vietnam, Sotrans Vietnam, Vinafco, Kerry Logistics Vietnam, Bac Ky Logistics Vietnam, Nippon Express Vietnam, Vietnam Airlines, Transimex Saigon Corporation, Sea and Air Freight International, Vinalink Logistics, PetroVietnam Transport Corporation, Noi Bai Cargo Terminal Services, and others.
Linh Pham
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