1 week Ago
HANOI: Vietnam’s logistics industry is undergoing a transformation, shifting from traditional logistics operations to a high-tech service industry, industry experts say. Pham Nguyen Thanh Quang, the general director of logistics company LEX Vietnam, said his firm fully integrates technologies such as artificial intelligence (AI), big data, the Internet-of-things (IoT) sensors and supply chain management systems to automate processes and enhance the user experience. Quang said his company’s AI system was implemented in stages, covering areas from order prediction and delivery-line optimisation, to logistics coordination and consumer-behaviour analysis.
He told a conference in Hanoi late last week the development of digital logistics was playing a crucial soft-infrastructure role in driving eCommerce growth. It enables faster and more accurate delivery, optimises operations and costs, while also boosting the profitability and competitiveness of eCommerce businesses. Thanks to big data and AI, goods could now reach customers in remote areas, foster new business models like instant delivery, time-based delivery, and the direct-to-consumer model, and support cross-border eCommerce, allowing Vietnamese businesses to quickly and effectively reach international customers, Quang said.
According to Bui Ba Nghiem, senior expert at the Import-Export Department of the Industry and Trade Ministry, digital logistics is one of the two strategic pillars of a modern logistics ecosystem, closely linked to the global supply chain. Besides green logistics, digital logistics will serve as key levers to help businesses optimise costs, improve competitiveness and expand markets. Nghiem said that we could not discuss eCommerce, digital transformation, or green growth, if logistics was unable to keep up.
Logistics companies needed to proactively transform themselves, rather than simply fulfilling the traditional logistics role, he said. Quang of LEX Vietnam said the country was currently one of the fastest-growing eCommerce markets in South-East Asia, with an annual growth rate of about 20%. However, to sustain the growth and achieve a breakthrough, significant investment and more synchronised upgrades were needed for the logistics system.
He added that investment in logistics infrastructure remained fragmented, with a lack of regional connectivity. There was also an absence of standardisation in data and system integration between businesses, overlapping investments in warehouses leading to oversupply and price competition, and a shortage of professionally trained human resources, making it difficult for the industry to keep pace with new technologies. To address these challenges, Quang said, logistics companies must prioritise investments in technologies such as AI, IoT, and big-data analysis systems.
Strengthening collaboration between logistics units to share infrastructure and avoid redundant investments was crucial. Additionally, developing digital logistics talent through cooperation between businesses and training institutions would be essential for long-term success, he said. The deputy general-director of Bac Giang International Logistics Co, Truong Thi Mui, suggested promoting preferential policies to encourage investment in transport-infrastructure connectivity, supporting businesses in implementing warehouse-management systems, IoT, and AI technologies for warehouse management, and creating favourable conditions for the development of smart warehouses that meet international standards.
Vietnam’s Logistics Performance Index (LPI) reached 3.3 points in 2023, ranking it 43rd out of 154 countries and territories, and fifth among Asean nations. The annual growth rate of services revenue stands at between 14% and 16%, with a market size of about US$40bil to US$42bil a year.
The quality and quantity of logistics services had improved significantly, contributing to the growth of Vietnam’s import-export turnover. According to the Vietnam Logistics Services Development Strategy for the 2025-2035 period, logistics services are expected to contribute 6% to 8% to gross domestic product (GDP), with an average annual growth rate of 15% to 20% by 2035. Vietnam aims to rank 35th or higher in the LPI globally by 2035, with logistics costs anticipated to drop to between 12% and 15% of GDP (down from between 16% and 18%).
Notably, the strategy includes specific targets for 2035, such as 80% of logistics businesses adopting digital-transformation solutions, 30% of vehicles switching to green energy and 70% of workers receiving professional training, with 30% holding university degrees or higher. By 2045, logistics services are expected to contribute between 12% and 15% to GDP, with an average annual growth rate of 10% to 12% and logistics services outsourcing reaching 80% to 90%, while under the strategic plan, all vehicles are expected to run on green energy. — Viet Nam News/ANN.
