Vietnam Ranks Top 5 in ASEAN for Logistics

1. Encouraging Results

The Vietnam Logistics Forum is an annual event, initiated in 2013, aimed at promoting the development of logistics services, strengthening links between logistics and manufacturing/import-export industries, and serving as a platform for dialogue and updates on domestic and international logistics.

According to the forum's report, the logistics sector has achieved many encouraging results:

• Growth Rate: The logistics service growth rate has been fast and stable, averaging 14-16% per year.
• GDP Contribution: Logistics directly contributes 4.5-5% to the annual GDP.
• International Ranking: According to the World Bank’s 2023 Logistics Performance Index (LPI), Vietnam ranks 43rd out of 139 countries and is one of the Top 5 nations in ASEAN, alongside Singapore, Malaysia, Thailand, and Indonesia.
• Cost Reduction: Logistics costs have been reduced to approximately 16% of GDP (down from over 20% in 2014), saving billions of USD annually for import-export businesses.
• Infrastructure: Logistics infrastructure, particularly the network of seaports, airports, highways, and logistics centers in key economic zones (like Ho Chi Minh City, Hai Phong, Quang Ninh, Da Nang, and Can Tho), has been synchronously invested.
• Businesses: The logistics business community continues to grow, with over 34,000 enterprises. Many have deeply integrated into the global supply chain and are applying high technology in operational management.
• Global Integration: Free trade agreements (FTAs) have created a favorable environment for Vietnam's logistics to integrate deeply, expanding the international service market across various aspects: Market access, infrastructure (meeting international standards), supply chains, cooperation, investment, human resources, and international technical standards.

Vietnam Ranks Top 5 in ASEAN for Logistics

These achievements have directly contributed to enhancing the competitiveness of Vietnamese goods, reducing import-export costs, and promoting international trade growth and domestic goods circulation, with the international trade scale expected to reach approximately 900 billion USD in 2025.

2. Addressing Six Bottlenecks

Despite the positive results, the logistics sector still faces limitations, summarized into six key bottlenecks:

• High Costs: Logistics costs in Vietnam remain high compared to other countries in the region (Singapore is about 8%, Malaysia 12%, and the global average is around 11%).
• Infrastructure Linkages: Regional connectivity and infrastructure synchronization are inadequate, making the system vulnerable to natural disasters.
• Enterprise Scale: The majority of logistics companies are small-scale, possess weak competitiveness, and a lack of large, leading enterprises persists.
• National Centers: National-level logistics centers for international transshipment have not yet been formed.
• Human Resources: There is a shortage of high-quality, professionally trained human resources suitable for the international working environment.
• Institutional Framework: The logistics legal framework has not yet specifically regulated new types of services such as e-commerce logistics, green logistics, and specialized cargo logistics.
• Digital/Green Transformation: Digital and green transformation efforts lack a common database and unified measurement standards.

The Prime Minister emphasized that these limitations require a shift in development thinking, moving strongly from "fragmented logistics support" to "modern, smart logistics development" as a vital economic sector. This new approach aims to maximize local capacity, promote regional and international economic linkages, and view logistics services as an essential driver for socio-economic development.

3. Future Goals

Moving forward, the logistics sector aims to achieve an average growth rate 1.5 times the GDP growth. Specifically, the goals include:

• The proportion of logistics service value-added in the total GDP must reach 6-7%.
• The average annual growth rate must reach 15-16%.
• Logistics costs as a percentage of GDP must be reduced to the world average, approximately 11-12%.