Foreign firms keep an eye on Vietnam logistics industry
16/06/2019
Vietnam’s logistics growth reached about 14-16% in recent years, standing at US$40-42 billion a year, according to the Vietnam Logistics Business Association (VLA)..
Currently, Vietnam is home to more than 3,000 logistics companies, of which 20% are state-owned, 70% are limited liability companies and 10% are privately held, according to VLA surveys. Most of the world-leading multinational logistics corporations are active in Vietnam, including DHL, FedEx, UPS and Maersk, and accounting for a significant market share. With their rich experience, they have completed logistics lines that can provide services at 3PL, 4PL and even 5PL levels.
According to the Ministry of Industry and Trade, by investing in well-functioning domestic logistics companies, foreign firms will quickly make use of existing networks, customers and domestic operation experiences. This helps them reduce market entry costs in comparison to starting business from the beginning.
Big foreign corporations are investing and expanding their logistics business in Vietnam. Remarkable names include DHL Supply Chain, Maersk Logistics, APL Logistics, Nippon Express, Expeditors, Panalpina, Agility, DHL, Global Forwarding and DGF. Another example is Samsung SDS, a subsidiary of Samsung Group. The firm joined a venture with Aviation Logistics Service (ALS) to deliver logistics services at Noi Bai International Airport (Hanoi) as it forecast an annual logistics growth of 15 - 20% in Vietnam. Japanese shipping lines are also interested in developing deep-water container ports in Vietnam, both investment and operation. MOL invested in Vietnam's two largest deep-water ports, namely Cai Mep - Thi Vai and Lach Huyen (Hai Phong International Container Terminal). Saigon Newport Corporation also cooperated with NYK and Mitsubishi to operate ODA-funded container port in Cai Mep - Thi Vai.
Foreign companies have the advantage of capital, technology, personnel and services of international shipping from parent transnational corporations. Therefore, they advantageously acquire international logistics services. Vietnamese logistics service providers have an advantage of understanding the domestic logistics service market and infrastructure such as seaports, warehouses, ICDs, transport means and stevedoring and provide most of these services for foreign logistics businesses in Vietnam.
Logistics services in Vietnam are becoming a fertile land for foreign investors. Recently, Deutsche Post DHL, a global express delivery company, announced its participation in the domestic B2C shipping market in Vietnam with the DHL eCommerce agency. Besides domestic forwarders, Bizweb website owner may integrate DHL eCommerce that is allowed to administer every stage of usage.
In addition to conventional services, shippers have applied modern delivery technology like Grab, Uber, sShip and Sapo. For example, Grap Express, powered by mobile transport applications, is holding advantage because it offers a free cash collection service and its delivery time is less than one hour. Forwarders begin to invest in COD (cash on delivery) management control processes in order to provide COD-certified delivery services, thereby creating an opportunity for shoppers to shopping experiences. M&As conducted by foreign logistics firms are forecast to be more active as Vietnam deepens its integration into regional and world economies
Some domestic enterprises such as Transimex Saigon, Saigon Newport and Gemadept are providing 3PL services on par with transnational companies operating in Vietnam.
(VCCINews)
