Vietnam’s logistics industry is a dynamic and rapidly growing sector, integral to the country’s expanding trade and industrial activities.

Industry overview

In 2024, Vietnam’s logistics industry contributed approximately 5.17% to the national GDP, with an annual growth rate between 14% and 16%. In its 2023 Logistics Performance Index report, the World Bank ranked Vietnam 43rd globally, positioning it among the top five ASEAN countries in logistics.

The sector is bolstered by Vietnam’s strategic location, serving as a gateway between Southeast Asia and major global markets. The country’s participation in free trade agreements like the CPTPP, EVFTA, and RCEP has further enhanced its role in global supply chains.

Market growth is driven by the expansion of major industries such as manufacturing, retail, wholesale, construction, agriculture, and mining. The fast-growing FMCG, food, and e-commerce sectors have also contributed substantially to the demand for logistics services. The US and EU markets remain key trading partners, fueling export-import activities that require sophisticated logistics solutions.

Market dynamics and trends

  • Infrastructure development: The government has prioritized modernizing transport infrastructure, including roads, railways, ports, and airports. Efforts such as expanding expressways to 3,000 km by 2025 (up from 2,021 km in 2023), completing key projects like the Long Thanh International Airport, and enhancing maritime and inland waterway transport are expected to boost logistics efficiency and capacity.
  • E-commerce growth: The rise of e-commerce and fast-moving consumer goods sectors is increasing demand for efficient last-mile delivery and warehousing services, boosting freight forwarding volumes.
  • Digital transformation: Many companies are adopting digital solutions and automation to streamline operations, improve transparency, and enhance customer experience. However, the pace of digital adoption is still moderate, with significant room for improvement.
  • Sustainability and green logistics: Sustainability is becoming a priority, with companies investing in eco-friendly transportation methods, renewable energy, and smart management systems to reduce carbon emissions. These initiatives align with global environmental standards and enhance brand image.

Challenges

  • International policies: International policies significantly impact Vietnam’s logistics and freight forwarding industry by shaping trade flows, cost structures, and operational requirements.
    • S. Trade Tariffs and Supply Chain Adjustments: Rising trade barriers can significantly reduce the competitive advantages of Vietnam’s manufacturing sector and change the manufacturing landscape, consequently impacting the logistics industry. Companies must navigate tariff uncertainties and adjust routes and partners accordingly to maintain competitiveness.
    • EU Carbon Border Adjustment Mechanism (CBAM): Starting in 2026, the EU’s CBAM imposes carbon taxes on imports exceeding emission thresholds, initially targeting heavy industries but with indirect effects on logistics. This pushes logistics companies to adopt green technologies, optimize routes, and invest in sustainable transport modes to reduce carbon footprints.
  • High Logistics Costs: Despite improvements, logistics costs in Vietnam remain relatively high compared to regional peers, impacting competitiveness.
  • Market Fragmentation: The dominance of foreign firms and the small scale of many domestic freight forwarders limit economies of scale and bargaining power
  • Regulatory and Compliance Complexity: Evolving customs procedures and regulatory requirements require freight forwarders to maintain high compliance standards to avoid delays and penalties
  • Slow Automation and Digital Adoption: The sector still relies heavily on manual processes, and automation uptake has been limited, increasing vulnerability to inefficiencies.

Vietnam’s logistics industry is poised for continued growth, driven by strategic investments, technological adoption, and integration into global trade networks. Addressing existing challenges, such as high costs and infrastructure gaps, will be crucial to unlocking the sector’s full potential and establishing Vietnam as a leading logistics hub in the region.