Vietnam’s Logistics Sector Appealing to Investors Amidst Upgrade Plans

July 2023

Vietnam recently announced plans to upgrade its logistics infrastructure in the southeast region. This key southern economic region covers Ho Chi Minh City (HCMC) and the five adjacent provinces of Dong Nai, Ba Ria – Vung Tau, Binh Duong, Binh Phuoc, and Tay Ninh.

The existing infrastructure system, which comprises seaports, airports, international border gates, economic corridors, and inter-regional trading routes, will be upgraded and in line with new national and international logistics systems. Notably, Long Thanh International Airport, the mega airport for the southern region, has been identified as an air hub, linking with the port logistics system in HCMC and Ba Ria – Vung Tau, especially thanks to the deep-water seaport in the Cai Mep-Thi Vai area.

The logistics sector has witnessed an annual growth rate of 14-16% in recent years; however, logistics costs still make up over 20% of GDP, among the highest in the world due to the inefficiencies. This issue presents an appealing investment opportunity for private equity firms and other well-capitalized investors.

Vietnam’s high-tech manufacturing sector expansion and the country’s increasing middle class both contributed to the rapid growth of the logistics sector. Today, cold-chain logistics for fresh foods and some perishable pharmaceutical products are predicted to become a key niche for foreign investors.

The Ministry of Transport (MoT) has committed to creating an appropriate legal environment for investors. In addition, the MoT is also encouraging transport businesses to implement advanced technology in monitoring their own vehicle fleet to optimize the existing routes and reduce the movement of empty vehicles.

(Sources: Fibre2Fashion, Vietnamnet)

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