Key Statistics from 2022
According to the Vietnam Logistics Association, the logistics and warehousing industry is one of the top-performing sectors in the country, with a growth rate of 12.3% in 2022. The industry's total revenue was estimated at USD 47 billion, accounting for 9.5% of Vietnam's total GDP. Moreover, the sector employed over 3.5 million workers in 2022, making it one of the largest employers in the country.
Factors Contributing to its Growth and Success
The Vietnamese government has been actively promoting the development of the logistics and warehousing industry through various initiatives. One such initiative is the establishment of logistics and transport associations, which have helped to promote the industry's development and provide a framework for its operation. The government has also invested heavily in infrastructure, including the construction of ports, airports, and highways, which has facilitated the transportation of goods and reduced logistics costs.
In addition, Vietnam has a large population with increasing disposable income, making it a potentially lucrative market for goods and services. The country also has a favorable investment climate, with a stable political environment and a low-cost labor market.
Industry Growth and Comparison to Previous Years
The logistics and warehousing industry in Vietnam has experienced significant growth over the past decade. In 2010, the sector's total revenue was only USD 12 billion, while in 2022, it reached USD 47 billion, a more than fourfold increase. The industry's growth rate has also been impressive, with an average annual growth rate of 18.7% between 2010 and 2022.
Key Trends
One of the key trends in the logistics and warehousing industry in Vietnam is the adoption of new technologies, such as data analytics, automation, and the Internet of Things (IoT). These technologies have enabled companies to increase efficiency, reduce costs, and improve customer experience. In addition, the industry is witnessing a shift towards more sustainable practices, with companies investing in renewable energy sources and reducing their carbon footprint.
Another trend is the increasing importance of e-commerce, which has led to the development of new logistics and warehousing models, such as last-mile delivery and omni-channel distribution. The rise of e-commerce has also increased demand for warehousing space and improved supply chain visibility.
Challenges
Despite its growth and success, the logistics and warehousing industry in Vietnam faces several challenges. One of the main challenges is the lack of a skilled workforce in some areas, such as data analytics and supply chain management. In addition, the country's infrastructure is still developing, and logistics costs remain high compared to other countries in the region.
Another challenge is the increasing competition from other countries, such as China and Singapore, which are also investing heavily in the logistics and warehousing industry. Vietnam will need to continue to improve its investment climate, infrastructure, and workforce to remain competitive.
Future Outlook
The future outlook for the logistics and warehousing industry in Vietnam is positive, with continued growth expected in the coming years. The Vietnamese government has set a target of USD 87 billion in logistics and warehousing revenue by 2025, which would require an average annual growth rate of 13.1% between 2022 and 2025.
To achieve this goal, the government is focusing on developing the country's infrastructure, promoting innovation and technology adoption, and enhancing the competitiveness of Vietnamese logistics and warehousing companies. The government has also signed several free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), which are expected to boost the industry by increasing trade and investment.
In addition, the industry is likely to benefit from the increasing demand for e-commerce and online shopping, which has accelerated during the COVID-19 pandemic. The rise of digitalization and the Internet of Things is also expected to drive demand for logistics and warehousing services, particularly for smart logistics and smart warehousing solutions.
The industry is also likely to face new challenges and opportunities in the future, including the adoption of new technologies, the need for sustainable practices, and increasing competition from other countries. Companies that can adapt to these changes and leverage new technologies are likely to succeed in the future.
Conclusion
The logistics and warehousing industry in Vietnam has become an important sector of the country's economy, with significant growth and potential for the future. The industry has benefited from favorable government initiatives, a growing economy, and increasing demand for goods and services. However, the industry also faces several challenges, including the shortage of skilled workers, high logistics costs, and increasing competition.
The industry is expected to continue to grow in the future, driven by new technologies, increasing demand, and government initiatives. To remain competitive, companies will need to invest in research and development, promote innovation, and adopt sustainable practices. With the right strategies and investments, the logistics and warehousing industry in Vietnam can continue to thrive and contribute to the country's economic development.