Wide open opportunities for the logistics industry

Currently, Vietnam's road network is limited, the seaport system has not been modernized, and railways and inland waterways have not been used effectively. However, the Government has focused on continuous infrastructure investment for many years, creating opportunities for the logistics industry to develop.

Currently, Vietnam's road network is limited, the seaport system has not been modernized, and railways and inland waterways have not been used effectively. However, the Government has focused on continuous infrastructure investment for many years, creating opportunities for the logistics industry to develop.

Investing in infrastructure and strongly developing digital transformation will help enhance Vietnam's position as an important logistics center.

Focus on developing infrastructure

Major infrastructure projects such as the plan to complete 3,000 km of expressway by 2025, the construction of a freight railway connecting Lao Cai with the ports of Hanoi and Hai Phong, the North-South high-speed railway, Terminal 3 (Tan Son Nhat International Airport) and the construction of Long Thanh International Airport, will contribute significantly to boosting Vietnam's economic activities.

In addition to these plans, the Government’s ongoing reforms to streamline administrative procedures, improve the quality of regulation issuance and enforcement, and support sustainable industries will be crucial in creating a more favorable environment for both domestic and foreign enterprises to do business.

Vietnam’s current logistics system is characterized by the participation of many different economic sectors operating independently, leading to limited optimization and inefficient route planning. This fragmentation leads to higher operating costs and reduced competitiveness of enterprises.

While challenges persist, Vietnam’s logistics sector is poised for transformational growth.

To take full advantage of this core infrastructure development, logistics operators should adopt multimodal transport solutions that seamlessly integrate road, sea and rail networks to optimize efficiency. Increasing supply chain integration by promoting collaboration between stakeholders will help reduce costs and improve operational efficiency.

Vietnam’s logistics costs remain significantly higher than those of its regional peers due to fragmented supply chains, bureaucracy and reliance on outdated processes. Document processing delays and administrative bottlenecks further add to operating costs for businesses.

However, the ongoing digital transformation in Vietnam presents an opportunity to streamline these processes. The adoption of digital technologies has revolutionized logistics operations. These technologies can enhance real-time tracking, optimize supply chain management, and improve transaction transparency.

Eurocham’s Transport and Logistics Subcommittee (TLSC) has been at the forefront of pushing for the simplification and efficiency of customs procedures. A notable achievement is that the TLSC has contributed to the process of promoting the issuance of the EUR.1, the EU-Vietnam Free Trade Agreement (EVFTA) certificate of origin by early 2024.

Through the EuroCham Business Confidence Index in Vietnam, EuroCham members have raised concerns about delays caused by shortages of goods. TLSC has worked closely with the authorities to expedite the issuance of additional forms to remove bottlenecks. Furthermore, TLSC is also working with policymakers to encourage the issuance of electronic Certificates of Origin for EU exports. This will be one of the potential solutions to simplify customs procedures and reduce complex and impractical rules and processes.

Improving sustainability

As Vietnam strives for economic growth, sustainability must remain a core priority. Green initiatives and digital transformation will ensure that economic growth is both environmentally sound and future-ready. A holistic approach – combining infrastructure development, regulatory reform, sustainable practices and increased supply chain integration – will position Vietnam as one of the region’s leading economies with long-term stability and prosperity.

The logistics sector is a significant contributor to carbon emissions, making environmental sustainability a growing concern. Vietnam’s carbon neutrality commitments and global regulations such as the EU’s Carbon Border Adjustment Mechanism highlight the urgent need for greener supply chain solutions. Green logistics initiatives such as the use of electric vehicles, energy-efficient warehouses and optimized delivery routes offer viable solutions.

TLSC plays an important role in this transition, by facilitating dialogue between businesses and policymakers.

To ensure that Vietnam’s regulatory framework supports sustainable logistics operations, TLSC helps all businesses comply with global standards while remaining profitable. Through ongoing collaboration with the Government, TLSC advocates for incentives and policies that encourage investment in environmentally friendly transport and logistics infrastructure.

The rapid expansion of e-commerce and cross-border trade is changing Vietnam's logistics landscape.

The rise of online shopping has led to an increasing demand for faster integrated logistics solutions, upgraded and increased warehousing capacity, last-mile delivery capabilities and efficient cross-border customs.

Vietnam’s growing digital economy presents opportunities for logistics providers to leverage AI-driven route optimization, real-time tracking, and smart warehouses. These technologies improve delivery speeds, reduce costs, and enhance customer satisfaction.

TLSC continues to work with the authorities to support the development of a legal framework for cross-border e-commerce. By advocating streamlined customs clearance procedures and harmonized trade policies, TLSC helps businesses capitalize on Vietnam’s growing role as a regional e-commerce hub.

One of the most pressing challenges in Vietnam's logistics sector is the shortage of highly skilled human resources.

As logistics operations become increasingly digitized and complex, the need for expertise in supply chain management, data analytics, and automation is growing. This opens up opportunities to foster stronger collaboration between businesses and educational institutions to bridge the skills, talent, and capabilities gaps within businesses themselves.

Increasing capacity building workshops and public-private partnerships will be important. Furthermore, engaging actively in dialogues with government agencies can help businesses keep abreast of regulatory changes, understand policies and contribute to the overall development of the logistics industry.

TLSC has taken proactive steps in this regard. In September 2024, TLSC organized a major training and dialogue session with the Ho Chi Minh City Customs Department. The event brought together business leaders and customs officials to discuss how to best implement regulations and procedures. These dialogues are an important platform for knowledge exchange, ensuring that both businesses and authorities are informed and prepared for future challenges.

While challenges persist, Vietnam’s logistics sector is poised for transformational growth.

By addressing infrastructure gaps, promoting digital transformation, integrating sustainability, adapting to e-commerce trends, and investing in workforce development, businesses can open up new opportunities and enhance Vietnam’s position as an important logistics hub in Southeast Asia in the future.

(*) Chairman of Eurocham Transport and Logistics Subcommittee

Source: https://baodautu.vn/co-hoi-rong-mo-voi-nganh-logistics-d250404.html