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Vietnamese logistics market: Domestic and foreign enterprises 'race' to invest

The logistics market is having an investment "race" between businesses. The recent strong participation and investment of domestic enterprises is expected to change the landscape of a market in which foreign-invested enterprises hold a large market share.

Thị trường logistics Việt Nam

Domestic enterprises increase investment and expand operations

Viettel Post previously only participated in the logistics market in the last-mile delivery segment. However, with the strong development of e-commerce, Viettel Post is implementing a plan to participate more strongly - building national logistics infrastructure.

Last January, Viettel Post put into operation a smart sorting technology complex (similar to what China Post and Amazon use). At this complex, Viettel Post has put 200 robots into operation to sort and sort - helping to bring processing capacity up to 1,400,000 parcels/day, an increase of 40% compared to before, helping to increase the load capacity. Viettel Post's entire system increased to 4,000,000 parcels/day - equivalent to meeting 50% of e-commerce capacity in Vietnam.

This complex comes into operation, helping to shorten Viettel Post's entire delivery time from 8 to 10 hours, increasing output by 3.5 times. Thanks to automation, the complex also helps optimize 60% of personnel costs. At the opening ceremony of the above complex, Mr. Tao Duc Thang, Chairman and General Director of Viettel Group, said that putting this complex into operation is the first step in the process of building a smart logistics infrastructure.

Also at the above event, Mr. Hoang Trung Thanh, General Director of Viettel Post, said that this business wants to build a cross-border logistics infrastructure to boost revenue in the next 5 years by 10 times compared to 2023. Viettel Post is investigating plans to build a customs warehouse system at international border gates by land, sea, rail, and air. In particular, the warehouse control operation system, ICD dry port, and intermodal cargo transshipment center... will help Viettel Post play a key role in creating national logistics infrastructure, contributing to making Vietnam become a Logistics connection point of Southeast Asia with China...

Bee Logistics is also a domestic logistics enterprise that is implementing a revenue target plan of 20,000 billion VND by 2027. Bee Logistics provides all logistics solutions, from sea, road, air to services. customs, multimodal transportation services... One of Bee's strengths is the ability to find points in the world and know how to connect between those points, connecting between types of transport to create suitable solutions for customers.

Bee currently has 23 offices in Vietnam and has opened 17 offices in 10 countries around the world with a total of more than 800 employees. By 2025, Bee will open offices in 15 countries and achieve revenue of 700 million USD (about 17,000 billion VND, 1.6 times higher than in 2021). By 2027, Bee sets a revenue target of 20,000 billion VND.

In addition to the above two businesses, 5 months ago, Transimex Company inaugurated a cold storage facility in Ben Luc (Long An) that met international standards after putting into operation a logistics center in Ho Chi Minh City and Binh Duong. Previously, Thaco invested in a logistics service chain in Chu Lai (Quang Nam); T&T Group cooperates with YCH (Singapore) to invest in ICD Vinh Phuc logistics center...

Foreign enterprises also increased investment

Not only domestic businesses, foreign-invested companies also see opportunities in the logistics market and increase investment in Vietnam.

Vietnam - Singapore Industrial Park Limited Joint Venture Company (VSIP) has just invested and completed a logistics center in Quang Ngai province with an investment of more than 17 million USD.

Sembcorp is a Singaporean enterprise, entering Vietnam in 1996 through a joint venture with Becamex IDC Group to establish Vietnam - Singapore Industrial Park Limited Joint Venture Company (VSIP). To date, VSIP has developed more than ten industrial parks in many provinces and cities and continues to expand.

At the press conference announcing Sembcorp Logistics Park Quang Ngai, Mr. Charles Chong, Director of Sembcorp Vietnam, said that this project is located at a strategic gateway in Dung Quat Economic Zone, bringing attractive value to businesses. manufacturing units and logistics businesses – helping them diversify their businesses and enhance their supply chain capabilities, creating favorable conditions for businesses to move and transport goods.

It is known that Sembcorp continuously promotes ready-built warehouse business activities in Vietnam. This unit has developed ready-built warehouse projects in Hai Phong, Hai Duong...

FM Logistic Group (France) also put into operation the FM Logistic Distribution Center in Bac Tan Uyen (Binh Duong) a few months ago with a total investment of 25 million USD. At the same time, SPX from Singapore put into operation an automatic goods classification center in Bac Ninh with an investment of tens of millions of US dollars. Best Express Vietnam 2022 invests 20 million USD to build goods classification centers in Bac Ninh and Ho Chi Minh City...

In addition to already invested projects, recently the investment attraction in logistics projects continues to increase. In August 2023, the Dong Nai Provincial People's Committee approved the detailed planning of the BW Logistics Center in Long Thanh district. In this province, the Cainiao logistics center project (Trang Bom) of China's Alibaba Group was approved in 2022. Also this year, Cainiao Network put into operation a logistics center of more than 100,000 square meters in the province. Ben Luc district (Long An). In addition, a few months ago, representatives of AP Moller Maersk Group (Denmark) came to work with Binh Duong province on investing in a large-scale logistics center here.

There are still many shortcomings that need to be resolved

According to Agility's 2022 assessment, Vietnam is ranked 11th in the group of 50 global emerging logistics markets. According to the World Bank's rankings, Vietnam currently ranks 64/160 countries in terms of logistics development and ranks 4th in the ASEAN region after Singapore, Malaysia, and Thailand.

According to data from the Ministry of Planning and Investment, Vietnam has 34,476 logistics service enterprises, of which 89% are domestic enterprises but only account for 30% of the market share, the rest belong to foreign enterprises.

At the conference "Logistics in the Red River Delta" held 2 months ago, Mr. Bui Tat Thang, former Director of the Institute of Development Strategy, Ministry of Planning and Investment, said that service quality is not high but costs are high. Logistics costs in Vietnam are still high - contributing to the low competitiveness of Vietnamese goods. Logistics costs in Vietnam are equivalent to about 16.8% of GDP (by 2022), while in developed countries are only equivalent to 7-9% of GDP.

At the recently held conference "Vietnam Logistics - The Road Ahead", Mr. Tran Duy Dong, Deputy Minister of Planning and Investment, said that businesses providing logistics services in Vietnam are mostly Small and medium-sized enterprises, fragmented operations, lacking experience and professionalism, providing basic services, or providing individual services, mainly competing on price, with little added value. Therefore, they often only act as subcontractors or agents for foreign companies.

Also pointing out the above fact, at a recent seminar organized by the Vietnam Logistics Service Business Association, Mr. Cap Trong Cuong, General Director of Vietnam Container Group Joint Stock Company, said that this company must work for foreign partners.

According to Mr. Cuong, in the market, there are many large capitalization companies with good networks, but the mutuality between businesses is not high, causing Vietnamese logistics to not develop properly. Businesses compete with each other to serve foreign customers, offering low prices to win customers but offering Vietnamese businesses higher domestic logistics prices... He believes that businesses must link together. each other to come up with the most reasonable problems, support each other so that we can all reduce costs...

At a recent seminar on logistics organized by the Ministry of Industry and Trade, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department, Ministry of Industry and Trade, assessed that Vietnam's logistics industry still has many weaknesses such as high logistics costs; Lack of connection between logistics service businesses with each other and with manufacturing, trading, import-export businesses. In addition, the scale and financial potential of Vietnamese logistics enterprises are weak, and their progress into foreign markets is not significant...

Reality shows that domestic logistics enterprises have recently increased investment, but at the same time, foreign enterprises have also made similar moves. Therefore, experts recognize that to change the market share of the logistics market, domestic businesses need to change and increase investment. Besides, we also need to strengthen mutual support and join forces to develop the market...



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