Vietnam’s logistics sector charms foreign investors

International firms are being lured to invest in Vietnam’s logistics industry, which is booming as a result of the country’s rising status as a manufacturing hub.

This was exemplified by agreements reached at the Vietnam Logistics Forum 2022 held in the northern port city of Hai Phong last week. One of them was a memorandum of understanding signed by the T&Y SuperPort Vinh Phuc and Vietnam Maritime Corpration (VIMC) to develop a multimodal smart logistics center named Vietnam SuperPort in Vinh Phuc province near Hanoi.

T&Y SuperPort Vinh Phuc is a joint venture between Singaporean supply chain group YCH and Vietnamese conglomerate T&T Group. The joint venture had signed in August two MoUs with Vietnam Airlines and Vietnam Railways Corporation for air and railroad connectivity.

VIMC owns and operates a fleet of 60 vessels that operates out of 16 ports in the country.

The Vietnam SuperPort hub, which will span over 83 hectares in Vinh Phuc, is the first project to be launched for the ASEAN Smart Logistics Network (ASLN) in line with the ASEAN Connectivity Master Plan 2025.

Chan Yoke Ping, CEO of T&Y SuperPort Vinh Phuc, said the joint venture and VIMC expected to jointly develop synergistic products and services for the inland container depot and the container freight station to meet the growing sea-traffic volumes in the industrial hinterland surrounding the Vinh Phuc logistics hub.

They are also looking to jointly develop new business opportunities to leverage the project as a trans-shipment hub to enhance multimodal cargo transportation within Vietnam and across the region, he added.

Early this November, DHL Express, the world’s leading international express service provider, inaugurated its latest service center in Vietnam. Located in Hanoi’s Bac Tu Liem district, the West Hanoi Service Center represents an investment of around two million euros and covers almost 2,600 square meters, about three times the size of its previous site.

FedEx Express, a subsidiary of FedEx Corp, said late September in its “What’s Next in E-Commerce” study that small- and medium-sized enterprises (SMEs) in India, Malaysia, the Philippines and Vietnam were among the most optimistic about their future e-commerce growth in the next three years, a sentiment shared by consumers in the same markets. E-commerce currently represents less than 6% of total retail sales in each of these markets, the survey showed.

The study polled SMEs and consumers in a total of 11 markets in Asia-Pacific, the Middle East, and Africa this July to explore the continuing evolution of e-commerce and identify trends that could fuel future growth.

FedEx Express Indochina managing director Hardy Diec said his firm was seeking to make larger inroads into the Vietnamese market because they expected e-commerce would continue to boom here.

Vietnamese electric vehicle maker VinFast last Friday shipped its first batch of 999 electric cars to the U.S., its first export market. Its other international markets include Canada, Germany, France and the Netherlands.

Just a few days earlier, VinFast and Germany-based Inform Software announced a strategic global partnership on EV logistics management for VinFast. VinFast will be able to monitor its EV logistics, optimizing processes from vehicle ordering and delivery to vehicle recalls, said Inform Software.

Meanwhile, Denmark’s A.P. Moller - Maersk, shortly known as Maersk, a leading logistics group, spent $3.6 billion acquiring Hong Kong-based contract logistics company LF Logistics.

Ditlev Blicher, regional managing director of Asia Pacific at Maersk, who was in Vietnam this week, said that with the addition of LF Logistics, Maersk has gained unique and best-in-class capabilities to service the important and fast-growing consumer markets in Asia.

“Furthermore, LF Logistics’s expertise in omnichannel fulfillment positions us well with the global e-commerce market,” he said.

Hoan Dang, head of omnichannel order fulfillment at Maersk Vietnam and Cambodia, said the addition of LF Logistics would allow the company to leverage e-commerce platforms and handle better its orders in the Vietnamese market.

A report released late October by Google, Temasek and Bain & Company said Vietnam was the fastest-expanding digital economy in Southeast Asia.

The Vietnamese digital economy’s gross merchandise value (GMV) is projected to grow 28% year-on-year to $23 billion this year, up from $18 billion in 2021, bolstered by a 26% year-on-year growth in e-commerce, the report said.