Vietnam’s existing logistics market is valued at about US$50 billion. There are around 1,300 logistics firms, 5% of which are foreign-invested companies dominating the market with a share of approximately 75%. Most local firms are small-scale companies with limited capital and human resources.
“Realising the growing and increasingly liberal logistics market, many global logistics companies have strengthened their presence in Vietnam,” said a recently released Seiko report on Vietnam’s logistics industry.
For instance, Hong Kong’s Kerry Integrated Logistics bought Vietnamese Tin Thanh’s stakes to set up Kerry TTC. DHL Vietnam offers comprehensive shipping and e-commerce solutions to support the expansion of domestic and cross-border online trade.
Gefco Sotrans, a joint venture of the European leader in automotive logistics Gefco Group, and one of well-known local logistics firms, Sotrans, has officially received its investment certificate.
The company will offer a comprehensive logistics service for the car and two-wheeler industry, covering warehousing, the supply of components, vehicle and spare parts distribution, and the custom clearance of imported cars.
Le Hoang Oanh, vice president of local Avina Logistics JSC, told VIR that many the Republic of Korean and Japanese firms currently wanted to buy Avina, which had a network of partners from 60 nations worldwide, and which grew 20% last year.
“In addition to our firm, many other local firms are also on the radar for foreign firms,” Oanh said. “I believe that in the near future, Vietnam’s logistics market will be totally controlled by foreign firms.”
Beketzhan Zhumakhanov, Kazakshtani Ambassador to Vietnam, said that in the months to come a delegation of transport firms from his nation would come to Vietnam in search of investment opportunities.
“Vietnam’s economy is strongly growing, with a population of more than 90 million people. This has pushed up the demand for transport and created opportunities for Kazakshtani firms,” Zhumakhanov said.
Yerzhan Zhakishev, vice president of United Transport Logistics Company – a joint venture between the three largest railway firms from Russia, Belarus, and Kazakshtan, also said that this firm wanted to co-operate with Vietnam Railways to expand its operation in Vietnam.
According to Oanh, many logistics joint venture companies in Vietnam will likely become wholly foreign-invested in the future. Initially, foreign firms want to establish joint ventures with local companies as a way to gradually control the local market, before growing into a wholly foreign-invested company.
For example, a joint venture between Japan’s Nippon Express and Vietnam’s Transimex will end its operation in 2018. At this point, the joint venture is expected to become a wholly Japanese invested firm.
To expand its logistics business in Vietnam, Nippon Express has established Nippon Engineering-Vietnam, which also operates in logistics, in addition to construction, design, and consultancy.
In Vietnam, the market access barriers for logistics are almost all removed. According to Vietnam’s World Trade Organization (WTO) service sector commitments, as of January, 11, 2014, foreign investors are permitted to provide most types of logistics services in the country subject to proper licensing requirements.
Still, the problem is that foreign investors suffer differences in the understanding and application of local investment licensing agencies.
In September 2015, the Ministry of Industry and Trade issued Dispatch No.9911/BCT-KH on creating a roadmap to open up the market for foreign logistics investors.
It clearly states that the local authorities should directly apply related provisions under Vietnam’s WTO commitments, which use the United Nations’ Central Product Classification (CPC) codes.
For example, the following sectors are now open to wholly foreign-invested enterprises: storage and warehousing services (CPC 742), and freight transport agency services (CPC 748).
In addition, a number of sectors require joint ventures with Vietnamese partners, such as freight transport services by sea-going vessel (CPC 7212), freight transport services by non-sea-going vessel (CPC 7222), and freight transport services by railway (CPC 7112).
“Realising the growing and increasingly liberal logistics market, many global logistics companies have strengthened their presence in Vietnam,” said a recently released Seiko report on Vietnam’s logistics industry.
For instance, Hong Kong’s Kerry Integrated Logistics bought Vietnamese Tin Thanh’s stakes to set up Kerry TTC. DHL Vietnam offers comprehensive shipping and e-commerce solutions to support the expansion of domestic and cross-border online trade.
Gefco Sotrans, a joint venture of the European leader in automotive logistics Gefco Group, and one of well-known local logistics firms, Sotrans, has officially received its investment certificate.
The company will offer a comprehensive logistics service for the car and two-wheeler industry, covering warehousing, the supply of components, vehicle and spare parts distribution, and the custom clearance of imported cars.
Le Hoang Oanh, vice president of local Avina Logistics JSC, told VIR that many the Republic of Korean and Japanese firms currently wanted to buy Avina, which had a network of partners from 60 nations worldwide, and which grew 20% last year.
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Beketzhan Zhumakhanov, Kazakshtani Ambassador to Vietnam, said that in the months to come a delegation of transport firms from his nation would come to Vietnam in search of investment opportunities.
“Vietnam’s economy is strongly growing, with a population of more than 90 million people. This has pushed up the demand for transport and created opportunities for Kazakshtani firms,” Zhumakhanov said.
Yerzhan Zhakishev, vice president of United Transport Logistics Company – a joint venture between the three largest railway firms from Russia, Belarus, and Kazakshtan, also said that this firm wanted to co-operate with Vietnam Railways to expand its operation in Vietnam.
According to Oanh, many logistics joint venture companies in Vietnam will likely become wholly foreign-invested in the future. Initially, foreign firms want to establish joint ventures with local companies as a way to gradually control the local market, before growing into a wholly foreign-invested company.
For example, a joint venture between Japan’s Nippon Express and Vietnam’s Transimex will end its operation in 2018. At this point, the joint venture is expected to become a wholly Japanese invested firm.
To expand its logistics business in Vietnam, Nippon Express has established Nippon Engineering-Vietnam, which also operates in logistics, in addition to construction, design, and consultancy.
In Vietnam, the market access barriers for logistics are almost all removed. According to Vietnam’s World Trade Organization (WTO) service sector commitments, as of January, 11, 2014, foreign investors are permitted to provide most types of logistics services in the country subject to proper licensing requirements.
Still, the problem is that foreign investors suffer differences in the understanding and application of local investment licensing agencies.
In September 2015, the Ministry of Industry and Trade issued Dispatch No.9911/BCT-KH on creating a roadmap to open up the market for foreign logistics investors.
It clearly states that the local authorities should directly apply related provisions under Vietnam’s WTO commitments, which use the United Nations’ Central Product Classification (CPC) codes.
For example, the following sectors are now open to wholly foreign-invested enterprises: storage and warehousing services (CPC 742), and freight transport agency services (CPC 748).
In addition, a number of sectors require joint ventures with Vietnamese partners, such as freight transport services by sea-going vessel (CPC 7212), freight transport services by non-sea-going vessel (CPC 7222), and freight transport services by railway (CPC 7112).
