Vietnam's logistics sector is at the crossroads of transformation as it faces mounting challenges and opportunities. The recent Vietnam Logistics Summit 2024, held under the banner "Transformation to Breakthrough," shone a light on these dual aspects during discussions with industry experts and government officials.
Held on October 31, the summit brought together stakeholders from various sectors to discuss the pressing issues surrounding logistics infrastructure. While the country has made strides, significant challenges remain, particularly concerning the expansion and modernization of logistics capabilities to keep pace with the growing demands of the global market.
Infrastructure, undoubtedly the backbone of any logistics network, was front and center during the discussions. Vietnam currently features 37 seaports and around 595,000 kilometers of roads. This includes highways and railways, which play pivotal roles in transporting goods across the nation. Notably, Vietnam boasts over 1,000 vessels operating along its sea routes, and its inland waterway system stretches about 17,000 kilometers, proving to be quite effective for socioeconomic activities.
Yet, the country's logistics infrastructure still lags behind, particularly when compared to its regional neighbor, China. For example, China has the world’s longest network of expressways, facilitating swift movement of goods and services, whereas Vietnam is still working to complete its expressway network. Current government policies aim to develop 4,000 kilometers of expressways by 2030, but the bureaucratic hurdles are often onerous. This sluggish pace raises concerns among industry leaders about the nation's competitiveness.
One stark illustration of this difference is observed through the contrasting timelines for completing construction projects. Take Tesla's factory for example—it finished construction within 11 months post-investment decision. Conversely, automobile factories within Vietnam can take years to complete. This disparity highlights the urgent need for streamlined processes and more favorable conditions for both domestic and foreign investments.
Logistics costs provide another lens to examine the sector's evolution. Historically, logistics expenditures accounted for approximately 20% of Vietnam's GDP; this figure has now dropped to about 16.8% to 17%. This downward trend reflects improved infrastructure effectiveness, contributing significantly to overall economic growth. Notably, investments and improvements within the inland waterway system have increased efficiency and cut logistics costs by up to 20%. Despite this, public investments remain sluggish, accounting for only 2% of overall funding.
The rise of free trade zones has been identified as another strategic avenue for enhancing logistics capabilities. These zones enable businesses to import duty-free goods, thereby streamlining logistics operations and offering additional value-added services such as packaging and sorting. With localities like Danang, Haiphong, and Ba Ria – Vung Tau already taking steps to build free trade zones, these developments could lead to substantial growth opportunities within the logistics sector.
Public-private partnerships are increasingly seen as key drivers of innovation and growth. Members of the Vietnam Logistics Summit advocated for developing multimodal logistics, encompassing all forms of transport—sea, air, and land. This would not only improve internal logistics efficiency but also solidify Vietnam's role as a central connecting point within the Southeast Asian market.
The summit also emphasized the need for Vietnam to adopt long-term strategic planning, extending beyond conventional timelines of 10 to 15 years. A vision stretching up to 50 years would allow the country to mitigate policy risks and align with global trends reshaping logistics.
Looking to China’s model, industry experts suggested Vietnam could benefit from investing heavily across both technology and infrastructure. China’s logistics network is deeply integrated with extensive resources directed toward public and private collaboration, enabling rapid growth. This approach has birthed significant investments from tech firms, resulting in huge logistics centers equipped to handle vast operations efficiently.
Although discussions at the summit highlighted the challenges, they also reinforced the belief in Vietnam's logistical potential. With continued investment and strategic collaboration, Vietnam’s logistics sector is well-positioned to make significant improvements and become competitive on the global stage.
By streamlining processes, enhancing infrastructure investment, and fostering public-private partnerships, Vietnam can not only meet its domestic logistics needs but also engage effectively with international supply chains. The road may be long, but the commitment from various stakeholders at the summit marks the beginning of a transformative phase for the logistics sector.
Vietnam’s government recognizes the urgency of these challenges and remains committed to overcoming them. With increased public investment and improved policy frameworks, the logistics sector can expect to see enhancements across various facets, paving the way for sustainable growth. The discourse during the Vietnam Logistics Summit 2024 serves as a reminder of the need for collective action to usher Vietnam’s logistics sector toward a more resilient and efficient future.
Moving forward, it’s clear: the logistics sector is not just about moving goods; it’s about laying the groundwork for Vietnam’s economic future.
