Vietnam’s emergence as regional manufacturing hub a significant logistics opportunity: SuperPort exec

Southeast Asia’s rise as a vital logistics hub with Vietnam positioned as a key manufacturing center presents a significant business opportunity, says Yap Kwong Weng, CEO of Vietnam SuperPort.

He presented his assessment at a logistics conference in Ho Chi Minh City on Thursday.

Weng compared the logistics industry to the circulatory system of every economy. He said the Vietnamese economy was experiencing growth, with foreign direct investment (FDI) on the rise. Vietnamese and ASEAN businesses were advancing robustly and seeking innovative pathways.

However, disruptions, adverse weather and geopolitical instability were impacting business operations worldwide, including in Vietnam.

Despite these challenges, e-commerce continued to flourish as demand for goods remained high. Vietnam was playing a big role in this as a primary manufacturing center.

Some Vietnamese products made up 50% of Southeast Asia's exports. In 2023, Vietnam's exports reached $440 billion, with an annual compound growth rate of 8%, driven largely by FDI and the electronics sector, Weng noted.

He emphasized the need for Vietnam to upgrade its infrastructure and improve connectivity with regional logistics networks to lower transportation costs.

Other speakers at the conference spoke of several unfavorable factors affecting the global logistics industry, including uncertain economic recovery, rising geopolitical tensions, ongoing risks of supply chain disruptions, decreasing consumer demand and natural disasters like super typhoon Yagi.

Despite these challenges, overall forecasts indicate significant potential for development, several experts said.

The free trade agreements Vietnam was part of, its strategic location in international trade routes, and the increasingly attractive investment environment were factors fostering the Vietnamese logistics industry's growth, they told the conference.

The government’s commitment to advancing major infrastructure projects including roads, airways, seaports and railways, along with a strong emphasis on digital and green transformation, was creating unprecedented opportunities for the country's logistics industry, they added.

According to Precedence Research, the global logistics market could be worth $21.91 trillion by 2033, with a compound annual growth rate of 9.35% from 2024 to 2033.

In Vietnam, the logistics market was valued at approximately $40 billion in 2023 and expected to grow at a rate of 14-15% annually until 2025. The nation’s logistics sector currently contributes about 4-5% to the GDP and provides jobs for over one million direct workers.

Deputy Minister of Planning and Investment Do Thanh Trung pointed out several shortcomings and limitations despite positive developments in Vietnam's logistics industry.

He said policies and institutions governing the sector remained insufficient and unsynchronized; and lacked a comprehensive legal framework.

Additionally, transportation and logistics infrastructure, such as warehouses, yards, and logistics centers, was still limited and not well integrated. Smooth multimodal transport corridors have yet to be established and there was a lack of logistics centers in strategic locations connected to ports, airports, roads, and production facilities, the deputy minister noted.