Vietnam sees continued robust investment in logistics

Vietnam's logistics market is looking vibrant, with big firms such as FM Logistic and Transimex JSC opening new facilities in September.

SPX - a delivery service provider with a freight forwarding network spanning 63 provinces and cities across Vietnam - held the inauguration ceremony of its 100,000 m2 automatic goods sorting center in VSIP Industrial Park, the northern province of Bac Ninh on September 8.

This is SPX's largest and most modern sorting center in Southeast Asia. The center is mostly automated and able to handle up to 2.5 million parcels per day after phase 1, and is expected to reach five million parcels per day in phase 2. The sorting capacity of the center has an accuracy of up to 99.97% thanks to the automated system.

On September 28, French logistics giant FM Logistic inaugurated its second Vietnam distribution center in the southern province of Binh Duong. The contract logistics provider said it was strengthening its omnichannel capabilities in Vietnam with the opening of the new distribution center at the VSIP II Industrial Park.

The $25 million facility, located 43 km from downtown Ho Chi Minh City, provides cutting-edge warehousing, handling, co-packing, distribution, and e-commerce services. It will serve multiple customers simultaneously while utilizing space and resources to meet demand fluctuations.

Spreading across 20,000 square meters with the potential to expand to 50,000 square meters, FM Logistic Vietnam’s new warehousing facility is equipped with 78 docks and furnished with best-in-class safety and security features, providing cost-efficient, quality storage, handling, and distribution services.

On September 29, two subsidiaries of Transimex JSC - Long An Investment One Member Limited Liability Company and Long An Logistics JSC - held the inauguration ceremony of phase 1 of Long An cold storage at Vinh Loc 2 Industrial Park in Ben Luc district, Long An province. The investment for Long An storage is VND1 trillion ($41 million).

Long An cold storage has a total area of 29,000 m2 and a capacity of 56,000 pallets. Warehouse system with deep freezing area, goods preparation area, 46 dock doors, and yard capacity for trucks and tractors to enter, exit, and export goods, suitable for all types of goods requiring temperature preservation.

Previously, on March 23, Lazada Logistics Vietnam officially inaugurated Lazada Logistics Park, with the focus of the most modern high-tech goods sorting center, at Song Than 1 Industrial Park, Binh Duong province. With a total area of nearly 20,000 square meters, the new sorting center is capable of handling up to 1 million parcels per day, and the level of automation is up to 99% thanks to modern technology, including artificial intelligence (AI) and machine learning.

Full of potential

According to Thomas Rooney, senior manager, Real Estate Consulting Services, Savills Hanoi, with strong developments, logistics in Vietnam is still concentrated mostly in large markets. This is an opportunity for investors in this segment to provide supply to meet the growing needs of the sector.

Rooney added that the current logistics market has not yet fully exploited its potential. Supply has not really met demand, requiring investors to flexibly come up with new models and optimize available warehouse space.

“Vietnam is becoming one of the world's prominent manufacturing centers with an increasingly improved investment environment and major trade agreements being signed. This has created more attraction in Vietnam's industrial market for the investment portfolios of large and reputable international enterprises. Investment in infrastructure and logistics systems will also strengthen the supply chain for manufacturing businesses.

"Along with that, the positive outlook of the e-commerce industry and the continued increase in demand for fast delivery promise to be a premise for the logistics market to further develop in the near future with effective operating models,” Rooney commented.

Assessing the prospects of logistics in Vietnam, Stephane Graber, general director of the International Federation of Freight Forwarders Associations (FIATA), said he had just had a survey trip to Vietnam in the summer to prepare for the FIATA World Congress held in Vietnam in the next two years.

After Covid-19, certain activities are being reallocated to Asia, and one destination for logistics activities is Vietnam. As more and more manufacturing activities are carried out in Vietnam, the country has many opportunities to develop its logistics industry, Graber noted.

Vietnam not only benefits from all modes of air, maritime, and rail transport, but also river transport, which are advantages to building a regional logistics center, he added.

At the Vietnam Logistics Conference 2023, with the theme "Vietnam Logistics: The Road Ahead," on October 5, Deputy Minister of Planning and Investment Tran Duy Dong said that in recent years, Vietnam has actively directed the improvement of mechanisms, policies, and infrastructure to develop the logistics field. Thanks to that, the capacity and ranking of Vietnam's logistics industry are improving and tending to expand.

Citing the World Bank's ranking, he said that Vietnam currently ranks 64th out of 160 countries in terms of logistics development and ranks 4th in the ASEAN region after Singapore, Malaysia, and Thailand.