Participants at the forum (Photo: VNA) HCM City (VNA) - Despite its great potential forgrowth, poor transport infrastructure and high costs are holding back thelogistics industry, insiders said at the Vietnam LogisticsTransformation forum held in HCM City on October 19.
Ayoung and growing population of around 100 million people, stable andsupportive Government policies, extensive trade agreements with othercountries, and favourable trends in manufacturing, exports and domesticconsumption are driving logistics services, Chih Cheung, founding managingpartner at SLP Vietnam, said.
Butat the same time there were a lot of inefficiencies in the industry, he said,adding that logistics costs represent 20% of GDP in Vietnam while it is 7-9% inmature markets.
Vietnamranks 11th out of 50 countries in the 2022 Emerging Market Logistics Indexreleased by logistics and freight provider Agility.
Thecountry’s freight and logistics market is expected to grow at a compoundedannual growth rate of 5.5% in 2022 – 2027. Its economy has posted a strongrecovery this year, growing at 8.93% in the first nine months.
Vietnam’sforeign trade was worth 557 billion USD in the period, representing a largefreight and logistics market.
DaoTrong Khoa, deputy chairman of the Vietnam Logistics Business Association, saidthe logistics industry is benefiting from free trade agreements and the rapidgrowth of e-commerce.
E-Logisticshas leveraged the efficiency of logistics services, he said.
However,the country’s logistics landscape is still fragmented and a master plan toattract investment and develop infrastructure to fully tap its potential isurgently required, he said.
Most domesticbusinesses are small or medium-sized with limited capital, technology andautomation, and face fierce competition from foreign companies.
Theyonly have a 30% market share with the remaining 70% held by foreign businesses,he said.
Butdomestic businesses are increasingly investing in infrastructure, modernwarehousing and technology to increase their market share, he added./.
