Logistics firms zoom in on Vietnam as competitive production base
Both domestic and foreign companies are seeking to make greater inroads into Vietnam’s freight and logistics market as the country emerges as a major Asia-Pacific manufacturing base.
Industry observers have noted that the logistics market in Vietnam is becoming more liberalized, creating opportunities for companies to cash in on rising demand.
Over the next 10 years, Vietnam is expected to become one of the most competitive manufacturing bases in the Asia-Pacific region, according to a report released November 11 by the Yicai Research Institute. The institute is a think-tank affiliate of Yicai Global - the English-language news arm of Yicai Media Group, China’s leading financial news group.
The report, which used surveys of Chinese businesses that operate in Vietnam, says that in addition to low labor and land costs, Vietnam also has advantages in terms of market thresholds and tariffs as it has joined several free trade agreements. Furthermore, its capital market can meet corporate financing needs.
Following firms from Europe and the U.S., several Chinese companies have also started operating in Vietnam amidst the China-U.S. trade frictions.
“In the short and medium term, Vietnam is an ideal place for China to relocate parts of its industrial chain in areas such as electronics manufacturing, textiles, footwear, apparel and furniture,” the report says.
Cashing in on the surging freight demand, many companies like Vietnamese firm An Binh has decided to increase its marine transport capacity.
Local logistics firm buys tanker
Vietnam’s An Binh Logistics has spent $7.1 million buying a 2008-built chemical and cargo tanker, Ho Chi Minh City-based Pioneer Shipbrokers Company Ltd. said in a market report released earlier this month. The 13,300-DWT RF Alice will become the Vung Tau-headquartered company’s second addition to its fledgling fleet.
An Binh Logistics, one of Vietnam's new generation of private shipowners, was established December 2020 by former executives of Vietnamese companies PvTrans, PTSC of Petrovietnam, and Au Lac. It currently operates a single vessel - the 12,927-DWT AB Paloma.
The RF Alice, which has been operating as part of the fleet for Netherlands-based Tune Tankers, will be renamed AB Serena upon handover to its new owner, according to online market observing platform Vessels Value.
New DHL facility amidst fiercer competition
DHL Express, the world’s leading international express service provider, inaugurated its latest service center at a November 1 opening ceremony in Hanoi. Located in the capital’s Bac Tu Liem district, the new West Hanoi Service Center represents an investment of around EUR2 million and covers almost 2,600 square meters, about three times the size of its previous site.
“According to the DHL Trade Growth Atlas, Vietnam will continue to be one of the top 10 countries for trade volume growth in the next five years,” said Bernardo Bautista, CEO and country manager of DHL Express Vietnam.

The DHL Express West Hanoi Service Center, inaugurated November 1 in the capital city’s Bac Tu Liem district. Photo courtesy of DHL.
The new center is also the company’s 100th facility in the Asia Pacific region (excluding China) to achieve TAPA “A” certification from the Transported Asset Protection Association (TAPA). This class-A certification is the highest level of security standard handed out by TAPA.
The much sought TAPA certification is regarded as having one of the most stringent independent security standards in the logistics and supply chain sectors.
Before launching the new center, DHL Express had announced 7.9% price increase over 2022 that will take effect January 1, 2023.
Prices are adjusted on an annual basis by DHL Express, taking into consideration inflation and currency dynamics as well as administrative costs related to regulatory and security measures, the company said.
Best Inc., a Chinese logistics services provider that is listed on the New York Stock Exchange as BEST, is providing direct logistics service to ship parcels from China to Vietnam, Cambodia, and Thailand via its partnership with Cainiao, Alibaba Group’s logistics arm.
For Cainiao, the Alibaba subsidiary announced on September 22 a partnership with Singapore-based e-commerce specialist Shopline to provide end-to-end cross-border logistics services. Under the partnership, Shopline merchants are provided with logistical services across 130 countries.
Cainiao operates the Cainiao P.A.T. Logistics Park which covers 110,000 square meters in Long An province; and is building Cainiao Dong Nai Smart Logistics Park on a 168,000-square meter site in Dong Nai. Both provinces border HCMC.
The new site also has immediate proximity to vital transportation facilities such as the upcoming Long Thanh International Airport and two operational major seaports - Cat Lai in HCMC and the Cai Mep-Thi Vai cluster of seaports in the province of Ba Ria-Vung Tau.

A port in the Cai Mep-Thi Vai cluster of seaports in Ba Ria-Vung Tau, southern Vietnam. Photo courtesy of the province’s portal.
At present, SEA Logistics Partners (SLP), an industrial and logistics facility developer backed by warehouse giant GLP, is constructing a nine-hectare warehouse, its second in Bac Ninh province, a manufacturing hub in northern Vietnam.
The project, with a total leasable area of more than 90,000 square meters, would be completed in the second quarter of 2023, featuring modern-standard, Grade A warehouses.
In Vinh Phuc which borders Hanoi like Bac Ninh, Singapore logistics facility developer and its Hanoi-headquartered Vietnamese partner T&T Group are developing the Vietnam SuperPort project as an integrated dry port and advanced supply chain center. The 83-hectare facility will cost about $300 million to build.
Proximity to China
“With favorable geographical features, coupled with strong investment in infrastructure and a series of policies to promote investment from the Vietnamese government, it can be said that the north has what it takes for ‘queen bees’ to nest and further contribute to Vietnam’s GDP,” Trang Bui, CEO of property services firm Cushman & Wakefield Vietnam, said Tuesday.
Adjacent to northern Vietnam is the Southern Economic Corridor of China, with prominent cities and regions like Shanghai, Hong Kong, Shenzhen, Fujian, and Guangdong. The economic region serves as the base for giants in manufacturing, biochemistry, commerce, and electronic technology. According to estimates by Cushman & Wakefield, the region accounted for more than 30% of China's total GDP in 2021. Among the names, Shenzhen is considered China’s Silicon Valley.
According to Cushman & Wakefield’s Q3 2022 report, the total supply of industrial land in northern Vietnam reached 13,600 hectares; with the average rent per square meter per rental cycle in Hanoi being $139, $130 in Bac Ninh, $121 for Hai Phong, $113 for Vinh Phuc, $112 in Hung Yen, $98 for Hai Duong, and $90 in Quang Ninh.
With initiatives to establish new economic zones and industrial parks nationwide, the Vietnamese government has been encouraging manufacturing businesses, both local and foreign, to expand in Vietnam, and is attracting more investments in the sector.
Akhil Nair, senior vice president of products, Asia Pacific for U.S.-based Seko Logistics, was quoted by CNBC on October 20 as saying that “a quick ramp up in clients hedging their sourcing geographies, especially with countries like Vietnam” resulted from the compounding impact of Covid lockdowns in China (Shenzhen, Ningbo, etc.) and the disruptions in global supply chains.
Seko has seen an increase in intra-Asia trade for raw material flows and subsequent finished goods exports rising from Vietnam and other Southeast Asian countries, Nair said.
Seko launched its subsidiary Seko Logistics (Vietnam) LLC this March to meet the rapid growth in demand for transport and logistics services from global producers and suppliers in the Vietnamese market.
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