The logistics industry in Vietnam is poised for significant advancements and transformations in the coming years, particularly in 2025. This sector has emerged as a key economic driver, contributing substantially to the nation’s growth and global trade engagement. As infrastructure improves and technology advances, Vietnam is set to become a regional logistics hub, attracting more investment and enhancing its competitiveness on the global stage. This evolution will not only boost the economy but also create numerous job opportunities, fostering sustainable development across the country.
Status of Vietnam’s Logistics Industry
Vietnam’s logistics sector has emerged as a vital component of the economy, showcasing an impressive annual growth rate of 14-16%. This significant expansion highlights the logistics market’s essential role in enhancing Vietnam’s export and import turnover. According to the Ministry of Industry and Trade, Vietnam ranks 43rd globally in the Logistics Performance Index (LPI), placing it among the top five ASEAN nations in logistics, alongside Singapore, Malaysia, and Thailand.
A notable example of this growth can be seen in the export of FIBC (Flexible Intermediate Bulk Containers) bags, which are increasingly in demand from major trading partners like the U.S., EU, and China. This demand has contributed to a significant 20% rise in cargo volume at seaports compared to the previous year. The overall import-export activities surged by 17%, reaching 511 billion USD in the first eight months of 2024, with FIBC bags playing a crucial role in this upward trend.
Recent analysis from Agriseco Securities Corporation predicts an astonishing profit increase of 1,620% for the logistics sector in Q3 2024. This growth mirrors the success of other flourishing sectors, such as fertilizers, retail, livestock, and banking. In Q3 2024, the logistics industry reported a remarkable 22% year-on-year profit increase, amounting to approximately 8,100 billion VND. For the first nine months of 2024, total profits in Vietnam’s logistics sector are projected to reach 24,400 billion VND, reflecting an 18% increase compared to the same period in 2023.
This robust performance underscores the logistics industry’s critical role in facilitating international trade and supporting Vietnam’s economic growth, particularly in sectors like FIBC bag production and export.
Creating a Breakthrough in Vietnam’s Logistics Industry
On May 20, the Ministry of Industry and Trade convened to discuss the Draft Strategy for Developing Vietnam’s Logistics Services. Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department, emphasized the need for a comprehensive approach to enhance the logistics sector’s alignment with Vietnam’s economic potential from 2025 to 2035.
The Draft Strategy envisions logistics industry contributing between 5% and 7% to the nation’s GDP, with an average annual growth rate set at 12% to 15%. It also aims for 70% to 80% of logistics services to be outsourced, thus streamlining operations and reducing costs to 12% to 15% of GDP. In addition, an ambitious goal is set to improve Vietnam’s position in the Logistics Performance Index (LPI) to 40th place or higher globally.
In the context of global economic recovery and rapid advancements in digital transformation and e-commerce, the strategy outlines six key orientations to drive progress:
- Legal Framework: Enhancing legal institutions and the overall business environment will be essential to encourage both domestic and foreign investment in logistics industry.
- Market Development: Strengthening business competitiveness and fostering regional connectivity will facilitate sustainable growth in the logistics sector, allowing Vietnam to better integrate into global supply chains.
- Human Resources: Investing in the development of high-quality logistics personnel is vital to improving service delivery and operational effectiveness across the industry.
- Innovation: Promoting technological advancements and digital transformation within logistics services will enhance operational efficiency and customer satisfaction.
- Industry Collaboration: Supporting industry associations and leading logistics companies will help create modern supply chains, positioning Vietnam as a key global logistics hub.
- Infrastructure Investment: Developing modern infrastructure is crucial for supporting logistics growth, ensuring that Vietnam can handle increasing trade volumes efficiently.
This strategic framework aims not only to address current challenges but also to leverage opportunities arising from Vietnam’s growing integration into the global economy, ensuring that the logistics sector becomes a cornerstone of national economic development.
Remaining Problems That May Affect the Logistics Industry
Global political instability is viewed as the most significant challenge by 82.4% of logistics companies, disrupting the global supply chain. Geopolitical conflicts, such as the Russia-Ukraine war, US-China trade tensions, and economic protectionism from major economies, have adversely impacted international trade flows and freight transport.
Additionally, economic sanctions, port closures in conflict zones, and exchange rate volatility are driving up operating costs for logistics companies. These fluctuations not only decrease operational efficiency but also prolong delivery times, undermining the reliability of supply chains.
Concerns about a slowing global economy are also prevalent, with 58.8% of businesses citing this as a significant barrier to demand for freight transport. The decline in global GDP growth has resulted in reduced trade volumes, directly impacting industry revenue. The IMF’s October 2024 report forecasted a modest global growth rate of 3.2% for 2024 and 2025, down from 3.3% in 2023. With global growth stagnant, Vietnam’s export turnover is unlikely to see substantial annual increases.
In 2024, leadership transitions in major economies, particularly following the US elections, are generating uncertainty, with the world watching closely for potential ceasefires. Conversely, the trade war may escalate further due to anticipated policies from the White House.
Conclusion
The logistics industry in Vietnam is on the verge of a groundbreaking year in 2025, driven by significant growth rates, strategic government initiatives, and a dynamic market environment. While challenges remain, the potential for future growth is substantial. As Vietnam continues to enhance its logistics infrastructure and embrace technological advancements, the sector is well-positioned to become a cornerstone of the country’s economy.
For businesses looking to navigate the complexities of the logistics industry, understanding these trends and challenges is essential. By staying informed and adapting to the evolving landscape, companies can leverage the opportunities presented by Vietnam’s burgeoning logistics sector, ensuring continued success and competitiveness in the global market.
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