Logistics groups vow to partner up locally
Logistics groups vow to partner up locally
The growth of exports to important overseas markets is sustaining the growth momentum of Vietnam’s logistics sector.
In early September, International Cargo Logistics (ICL) announced that it has opened a new office in Ho Chi Minh City as a continuation of its global growth plan. The UK-based forwarder aims to develop its multimodal offering in the region, capitalising on Vietnam’s proximity to major shipping routes and the country’s burgeoning e-commerce exports.
“Our new office will be integral in driving operations in Southeast Asia, with a particular focus on supporting our clients in the e-commerce sector,” said Yoav Izhari, CEO of ICL. “Vietnam’s position facilitates easy access to the South China Sea route, which is integral to our operations between Asia and Europe. This new office presents an exciting opportunity to strengthen our working relationships with existing clients and to build new connections with players in the region.”
Likewise, transport and logistics services group GEODIS is committed as a trusted logistics partner for many Vietnamese exporters.
Chandler So, managing director of GEODIS Vietnam, said as exports continue to recover and expand, the company is in a strong position to use its global network and expertise to tap into the country’s logistics market across various sectors, such as high-tech, retail fashion, automotive, industrial materials, and pharmaceuticals. This is reflected in the double-digit annual growth the company is achieving in volume.
“With the increasing complexity of global supply chains, Vietnamese exporters are seeking professional guidance to manage international logistics effectively,” So said. “Vietnam’s logistics market is one of the fastest-growing in Asia, and it offers many opportunities for us to support our multinational customers.”
The increase in export activity requires efficient logistics, enabling logistics companies to expand their operations and offer comprehensive transport solutions to clients in Vietnam. The growth in exports also heightens the demand for related services, such as customs brokerage, contract logistics, and material imports.
According to Modor Intelligence, Vietnam’s freight and logistics market is expected to reach $48.57 billion in 2024 and grow at a compound annual growth rate of 6.75 per cent to reach $71.88 billion by 2030. Vietnam’s Logistic Performance Index surged to 3.3 points in 2023, driven by the logistics sector and export growth.
Truong Bui, partner and general manager of Roland Berger Vietnam, said Vietnam’s rapidly growing export sector had significantly bolstered the development of its logistics industry, with tangible impacts across key areas such as port expansion, transportation, and warehousing. The increase in exports, which rose over 16 per cent to $578.47 billion in the first nine months of 2024, has driven major investments in infrastructure.
“For instance, Vietnam’s Cai Mep-Thi Vai and Lach Huyen deepwater port complexes have become one of Southeast Asia’s busiest, connecting Vietnamese goods to major markets in the US and Europe. This has also attracted substantial foreign direct investment into logistics, with international companies like DHL and Kerry Logistics expanding their presence to support the increasing export volume,” Bui said.
Additionally, the demand for modern warehousing and transportation services has surged, spurring growth for leading local companies such as Vietnam Maritime Corporation and Gemadept Corp, which have seen substantial improvement in their logistics operations. Export growth also opens up opportunities in logistics real estate, such as ready-built warehouses. Firms like BW Industrial are expanding their portfolio to meet the growing needs of exporters.
“With more goods flowing in and out of the country, logistics companies now have more motive than ever to adopt advanced technologies, such as supply chain management software and warehouse automation, to streamline processes and boost efficiency. This trend is improving companies’ competitiveness and raising the digital capability of Vietnam’s logistics industry,” Bui said.
The outlook for Vietnam’s logistics sector continues to improve due to resilient demand for export orders in the near term. The General Statistics Office claims that there is an increasing number of enterprises that predict positive growth in export orders in the fourth quarter of 2024. A total of 83.6 per cent of enterprises forecast an increase in export orders or remain the same compared to the third quarter of 2024.
