Vietnam's logistics costs are among the most expensive in the region: Where are the bottlenecks?

Vietnam's logistics costs are higher than the average for many countries in the region. This reality reflects systemic bottlenecks in infrastructure, transportation organization, and supply chain operational capabilities.

A working scene at a sorting center spanning over 45,000m² in Vietnam, invested in by a major logistics group from China - Photo: BONG MAI

Vietnam Report has just released a lot of important data, revealing a business landscape with great potential but also many challenges in the logistics industry in Vietnam.

A surge in logistics businesses is emerging, capitalizing on the booming e-commerce market.

In 2025, Vietnam's economy is projected to grow impressively with an estimated GDP of 8%, laying the foundation for a 10% target the following year. In this context, logistics continues to play a vital role in the economy.

According to Vietnam Report, the logistics market continues to expand strongly and deeply, with a rapidly growing network of businesses ranging from transportation, warehousing, and forwarding to integrated logistics and e-commerce logistics.

According to the General Statistics Office, in the first 11 months of 2025, nearly 10,300 new businesses were established in the transportation and warehousing sector, an increase of over 29% compared to the same period last year. This corresponds to a total registered capital of over 95,300 billion VND, creating jobs for approximately 49,100 workers.

Import and export activities continue to be an important pillar for the industry, with Vietnam's total import and export turnover continuing to reach record highs, projected to exceed 910 billion USD.

Notably, the boom in e-commerce and the digital economy is reshaping the logistics market. Live streaming on e-commerce platforms also demands near-instantaneous order processing, leading to the development of micro-fulfillment models in major cities, reducing delivery times from several days to just hours.

Regarding the financial picture, a survey by Vietnam Report shows that although the revenue of most logistics businesses increased in the first three quarters of 2025, profits were highly differentiated due to escalating costs. While half of the businesses reported increased profits, a large proportion experienced a significant decline compared to the same period last year.

High shipping costs, foreign companies stand out with many advantages.

According to information from Vietnam Report, alongside many advantages and great potential, there are still quite a few challenges in the market.

Logistics costs in Vietnam are consistently higher than the regional average, highlighting systemic bottlenecks in infrastructure, transportation organization, and supply chain operations. While significant investment has been made in transportation infrastructure, there is still a lack of synergy between road, rail, waterway, seaport, and air transport. Regional and international connectivity is not yet optimal, resulting in longer transit times and higher transshipment costs.

Furthermore, domestic logistics businesses are mostly small and medium-sized, with limited financial capacity, technological expertise, and service integration, resulting in low competitiveness compared to multinational logistics corporations.

Vietnam's low competitiveness compared to multinational logistics corporations has resulted in a continuous trade deficit in transportation services over the years during Vietnam Report's research period from 2010-2025.

Data shows that imports of transportation services consistently exceed exports, reflecting the significant reliance of import and export activities on foreign shipping companies, carriers, and logistics businesses. In recent years, the trade balance has continued to decline sharply, with the deficit being long-term and difficult to reverse in the short term.

Compared to other service sectors, transportation services have the largest trade deficit, reaching $7.1 billion in 2024, far exceeding other service groups such as insurance ($868 million) and tourism ($520 million). This confirms that Vietnam's trade deficit in services mainly stems from the transportation and logistics sector.

The root cause stems from significant limitations in the capacity of the domestic shipping fleet and the weakness of domestic logistics businesses in terms of capital, technology, and international networks. High-value logistics services such as ocean shipping, integrated logistics, and global supply chain management are still dominated by FDI enterprises. High domestic logistics costs reduce the competitiveness of Vietnamese businesses.

"As a result, although import and export turnover is increasing rapidly and the logistics market is vibrant, the benefits from transportation services have not been retained domestically, reducing the spillover effect of trade on economic growth," Vietnam Report stated.

According to experts, Vietnam needs to strengthen multimodal infrastructure, enhance the role of railways and waterways, develop inland container depots (ICDs), promote digital transformation, and green logistics... in order to reduce costs and increase the competitiveness of the supply chain.

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Source: https://tuoitre.vn/chi-phi-logistics-cua-viet-nam-lot-top-dat-do-trong-khu-vuc-diem-nghen-o-dau-20251211190945899.htm