Vietnam needs large, specialized logistics centers to compete better: official

Vietnam needs large-scale, specialized logistics centers that will enable greater competitiveness of local economies and enterprises, says Tran Thanh Hai, deputy head of the Ministry of Industry and Trade's agency of foreign trade.

He stressed the task’s urgency at a logistics conference in Ho Chi Minh City on Thursday.

The recent influx of e-commerce platforms such as Temu, Shein and Taobao, along with a surge of goods imported from China, has raised critical questions about the logistics industry’s preparedness in Vietnam, Hai said.

“These products are arriving at unprecedented speeds and often at ‘free’ prices, prompting many organizations, businesses and consumers to wonder: ‘How is China able to do this?’"

Hai explained that China has developed an effective strategy for industrial growth, including the logistics industry. Support from the Chinese government has played a vital role in regulating the market and facilitating businesses’ access to foreign markets.

"This support enhances the competitiveness of Chinese companies in general and their logistics sector in particular. Over time, these businesses have grown into large, global entities capable of competing fairly in the international market. As a result, when they enter the Vietnamese market, they come equipped with numerous advantages," he said.

Hai noted that many products ordered by Vietnamese consumers through cross-border e-commerce platforms, particularly from China, are items that Vietnam is capable of producing.

However, imported goods are often available at much lower prices due to reduced logistics costs. This raises a pressing question for Vietnamese enterprises: How can they close this price gap? If they fail to do so, the viability of domestic manufacturing industries could be in jeopardy.

Hai said logistics centers were a critical component of the broader logistics infrastructure, serving as connections to transport systems like seaports, airports, highways and railways. However, the development of such centers in Vietnam has been “relatively fragmented and uncoordinated.”

Existing logistics centers primarily cater to the domestic market and typically feature basic infrastructure. There is a notable lack of large-scale, specialized centers with modern operations that can effectively connect localities and logistics enterprises, such as extensive agricultural logistics centers and large cold storage facilities for storing and distributing goods to supermarkets and retail systems. These centers are essential for adding value to exported goods, he noted.

“Domestic enterprises often lack the strength necessary to compete, but we are starting to see new models introduced by foreign investors that aim to modernize logistics centers in Vietnam. We hope to see the establishment of large-scale, modern, multifunctional logistics centers in the near future, which would enhance the capacity of Vietnamese enterprises to learn and adapt.”

Yap Kwong Weng, CEO of Vietnam SuperPort, said that China has prioritized logistics development since 2000, employing three key strategies: accelerating growth of logistics enterprises in Southeast Asia; increasing technological investments in logistics, focusing on both hardware and software; and extensive replication efforts, supported by vast resources.