Tông quan về logistics Việt Nam năm 2020Viet nam logistics report 2020 english version

MINISTRY OF INDUSTRY AND TRADE

VIET NAM LOGISTICS

2020
REPORT

REDUCE LOGISTICS COSTS

INDUSTRY AND TRADE PUBLISHING HOUSE
Hanoi, 2020


VIET NAM LOGISTICS REPORT 2020

TABLE OF CONTENTS
PREFACE

CHAPTER I: BUSINESS ENVIRONMENT

11

1.1. Economic review in Vietnam and the world in 2020

12

1.1.1. Vietnam’s economy

12

1.1.2. World economy

15

1.2. World logistics industry in 2020 and trends

18

1.2.1. World logistics industry in 2020

18

1.2.2. Prospects and main trends

21

1.3. Policy on logistics

2

7

24

1.3.1. General policy on logistics

24

1.3.2. Some typical policies in the transport sector

27

1.3.3. Some typical policies on logistics infrastructure

28

CHAPTER II: LOGISTICS INFRASTRUCTURE

29

2.1. Road traffic infrastructure

30

2.2. Railway transport infrastructure

32

2.3. Sea transport infrastructure

35

2.3.1. Seaport infrastructure system

35

2.3.2. Vietnam’s ship fleet

37

2.4. Inland waterways transport infrastructure

38

2.5. Aviation infrastructure

40

2.6. Logistics centers

42

2.6.1. Logistics centers established in 2020

42

2.6.2. Model of logistics centers applying modern technology

45

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CHAPTER III: LOGISTICS SERVICES

47

3.1. Transport services

49

3.1.1. Overview

49

3.1.2. Road transport

50

3.1.3. Sea transport

51

3.1.4. Air transport

52

3.1.5. Railway transport

53

3.1.6. Inland waterways transportation

55

3.2. Warehousing services

56

3.2.1. Overview

56

3.2.2. Cold storage and cold chain logistics

56

3.2.3. Bonded warehouses

58

3.3. Freight forwarding services

58

3.4. Other services

59

3.4.1. Customs brokerage service

59

3.4.2. ICD

59

3.5. Logistics service providers

60

3.6. Logistics market development

60

3.6.1. Development of logistics service supply

60

3.6.2. Development of logistics service demand

63

3.6.3. Logistics intermediary development (connecting supply and demand)

65

CHAPTER IV: LOGISTICS ACTIVITIES AMONG MANUFACTURERS
AND TRADERS

67

4.1. Overview

68

4.2. Status of logistics activities among manufacturers and traders

71

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4.2.1. Order fulfillment process

72

4.2.2 Storage and warehousing

74

4.2.3. Cargo delivery

75

4.2.4. Procurement

76

4.2.5. Logistics information system

76

4.2.6. Logistics organization and outsourcing activities

78

4.3. Evaluation of logistics management among manufacturers and traders
4.3.1. Logistics costs

80

4.3.2. The necessity of improving logistics activities within enterprises

81

CHAPTER V: LOGISTICS SUPPORT ACTIVITIES
5.1. Application of information technology in logistics

83
84

5.1.1. Some applications of information technology in state management of logistics

84

5.1.2. Application of IT in logistics enterprises

85

5.1.3. Application of block chain in logistics and supply chain in Vietnam

91

5.2. Human resource training in logistics industry

92

5.2.1. University and postgraduate training programs

92

5.2.2. College-level logistics training

94

5.2.3. Short-term human resource training activities

96

5.2.4. Self-training activities in businesses

96

5.2.5. Logistics training network

97

5.3. Propaganda on logistics

97

5.3.1. Propaganda programs

97

5.3.2. Some conferences, seminars, and propaganda activities on logistics in 2020

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5.4. International cooperation in logistics

102

5.4.1. Group communication activities

102

5.4.2. Joint venture and cooperation activities

104

5.4.3. Foreign Direct Investment

104

CHAPTER VI: LOGISTICS COST REDUCTION

107

6.1. Overview

108

6.1.1. Calculation methods of logistics costs in the world

108

6.1.2. Logistics costs in Vietnam

110

6.2. Factors affecting logistics costs in Vietnam

114

6.2.1. Transportation costs:

114

6.2.2. Inventory carrying costs

116

6.2.3. Administrative costs

116

6.2.4. Competence of manufacturers, traders and logistics service providers

117

6.3. Proposals on reducing logistics costs in Vietnam

118

6.3.1. Government level solutions

118

6.3.2. Corporate level solutions

123

6.3.3. Other solutions

125

CONCLUSION

126

APPENDIX

127

LIST OF TABLES

130

LIST OF FIGURES

130

LIST OF BOXES

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VIET NAM LOGISTICS

REPORT

2020

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PREFACE

I

n order to implement Decision No. 200 / QD-TTg dated February 14,
2017 approving the Action Plan to improve competitiveness and develop
Vietnam’s logistics services until 2025, since 2017, the Ministry of Industry
and Trade has coordinated with experts in the field of logistics to develop an
annual Vietnam Logistics Report to review, evaluate, and provide information on
Vietnam’s and international logistics situation along with prospects and related
policy regulations. ... This contributes to State management of production,
business and investment activities of enterprises, as well as serving scientific
researches and communication in logistics.
Based on the opinions of experts from Logistics Report 2017, 2018, 2019
and in the spirit of continuous innovation, Vietnam Logistics Report 2020,
which follows trends and practical fluctuations in domestic and international
markets, has a six-chapter structure, including a thematic chapter as follows:
i.

Business environment;

ii.

Logistics infrastructure;

iii.

Logistics services;

iv.

Logistics activities among manufacturers and traders;

v. Logistics support activities;
vi. Logistics cost reduction

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The report was made with the participation of the Editorial Board
including experts from Ministries, Associations, Training and Research
Organizations on the basis of reliable information and data systems updated
from official sources and actual survey results conducted by the Editorial
Board.
The Editorial Board hopes that the Report will meet with the demand of
readers for logistics information, data and orientations and looks forward to
receiving their comments for improvement. If there is any question to be
discussed or commented, please liaise with the Editorial Contact at:
The Agency of Foreign Trade, Ministry of Industry and Trade
54 Hai Ba Trung, Hanoi
Email:
Website: www.logistics.gov.vn

Thank you

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EDITORIAL BOARD
VIETNAM LOGISTICS REPORT 2020
(Decision No. 608 / QD-BCT dated February 24, 2020
of the Minister of Industry and Trade)
No

Full name

1

MSc. Tran Thanh Hai

2

PhD Trinh Thi Thanh Thuy

Position

Title

Deputy Director General of Import-Export

Agency, Ministry of Industry and Trade

Editor in chief

Deputy Director of Industry and Trade
Policy and Strategy Institute, Ministry of
Industry and Trade
3 PhD Dinh Thi Bao Linh
Deputy Director of Industry and Trade
Information Center, Ministry of Industry
and Trade
4 Mr. Dao Trong Khoa
Vice Chairman of Vietnam Logistics
Business Association
5 Mr. Nguyen Tuong
Deputy Secretary General of Vietnam
Logistics Business Association
6 Associate Prof. Ho Thi Thu Hoa
Head of Department of Logistics
Management and Multimodal Transport,
Ho Chi Minh City University of Transport
7 Associate Prof. Dr. Trinh Thi Thu Huong Deputy Head of Vietnam Logistics Research
and Development Institute, Foreign Trade
University
8 PhD. Nguyen Thi Van Ha
Deputy Director of Institute of International
Economics and Business, Foreign Trade
University
Deputy Dean, Faculty of International
9 PhD. Tran Thi Thu Huong

Education, University of Transport
10 Mrs. Dang Hong Nhung
Lecturer, Department of Business Logistics,
College of Commerce

Member

Member

Member
Member
Member

Member

Member

Member
Secretary

Translation team:

Mr Nguyen Tuy Anh - Ms Le Thi Thu Trang - Mr Bui Tuan Phong
Mr Nguyen Hai Dang - Mr Dao Anh Trung

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CHAPTER I
BUSINESS ENVIRONMENT

BUSINESS ENVIRONMENT

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1.1. Economic review in Vietnam and the world in 2020
1.1.1. Vietnam’s economy
1.1.1.1. Some major economic indicators
The year 2020 is a particularly difficult year for the world economy in general and Vietnam’s
economy in particular due to many adverse factors such as Covid-19 pandemic, natural
disasters, trade tensions and political problems.
According to the General Statistics Office of Vietnam (GSO), by September 2020, most
economic indicators are not as positive as that of the same period in 2019 and the average
statistics over the past 5 years. GDP growth, industrial production index in general; total
social investment, export, manufacturing and processing industries’ indexes in particular fell
to the lowest in the last 5 years.

Specifically, figures for both retail of goods and services (price factor excluded) and import
decreased compared to the same period last year (Figure 1).
Figure 1. Main economic indicators of Vietnam between 2016 and 2020

Source: GSO of Vietnam
Import and export statistics: General Department of Vietnam Customs

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1.1.1.2. Production situations
a) Agricultural, forestry and fishery production
In the first 9 months of 2020, agricultural, timber and aqua-culture production encounter
many difficulties due to natural disasters (drought, saltwater intrusion), and
disease (African swine fever). Covid-19 Pandemic specifically caused disruptions to both the
input and output of agricultural, aqua-culture and timber production.
However, thanks to the efforts of the State, manufacturers and enterprises, the productivity
remains relatively high. According to the GSO of Vietnam, the agriculture, timber and
aqua-culture sectors have laid the foundation of Vietnam’s economy during difficult times,
ensuring the supply of food and necessity goods and pacifying the people during the
pandemic.
b) Industrial production
The complicated situation of Covid-19 pandemic in many countries worldwide has disrupted
the supply chain of imported raw materials for industrial production in 2020, particularly in
the processing and manufacturing industry in different ways.
Difficulties in both input and output have caused the secondary sector of the economy with

value added to decline. The statistics of the first 9 months decreased as follows: production
of motor vehicles down 12.2%; crude oil and natural gas exploitation down 11.4%; motorbike
and motorcycle production down 8.9%; repair, maintenance and installation of machinery
and equipment down 7.4%; beverage production down 6.6%; wood processing and wood,
bamboo and cork products down 5.8%; textile production down 4.4%; leather and related
products down 3.8%; metal production down 1.1%.
Some industries grew marginally such as electrical equipment manufacturing up 0.4%;
textile up 0.6%; production of other non-metal mineral goods up 1.4%; waste collection,
treatment and disposal, and scrap recycling growing by 2.4%.
Some industries had higher revenues during the pandemic, therefore, industrial production
in the first nine months of 2020 increased significantly compared to that of the same period
last year and made a big contribution to the overall growth of the industry: medicine,
pharmaceutical chemistry and pharmaceutical materials by 34.4%; production of paper
and paper products by 8.1%; chemical production and chemical products by 7.9%;
manufacturing electronic products, computers and optical products by 8.6% (thanks to
the demand for working online or remotely via electronic devices).
In addition, some mining industries have witnessed slight development, such as: metal ore
mining up 14.8%; hard coal mining and lignite up 4.9%
A positive signal is that a survey on business trends of enterprises in the manufacturing

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industry conducted by the GSO of Vietnam showed that enterprises are optimistic about
the business situation in the fourth quarter of 2020, with 81% of enterprises predicted to
become stable and even better.

1.1.1.3. Status of import and export
Exports of goods
According to the General Department of Vietnam Customs (announced on October 12,
2020), the nation’s merchandise export in the first 9 months of 2020 reached USD 202.57
billion , rising slightly by 4.1% compared to that of the first 9 months of 2019. In particular,
the export turnover of FDI enterprises reached USD 129.82 billion, down 2.7% over the
same period. The proportion of FDI sector contributing to` total exports also decreased to
64%. The highlight of export is that domestic enterprises continued to witness a growth in
export value while FDI into Vietnam declined.
The export value of most agricultural and aquatic products decreased (except that of rice
and cassava). In the group of light industries, the export of textiles, footwear, bags, suitcases,
and umbrellas decreased compared to the figure for the same period in 2019 while that of
many other manufacturing products still increased.
Imports of goods
Goods imported into our country in the first 9 months of 2020 reached USD 186.05 billion,
down 0.7% compared to that of the same period in 2019. The import turnover of FDI
enterprises was USD 103.85 billion, down by 4.5%. Imports fell the most dramatically in
the group of automobiles, motorcycles, spare parts, and vegetables (because these are
non-essential goods). The petroleum group also fell sharply in value (41.6%), but mainly
due to the price factor while its import volume decreased slightly (9.8%). The group of
raw materials and intermediate goods also witnessed a decline this year, with export
production affected by the Covid-19 epidemic, but the decline was not substantial.
Trade Balance
Trade balance in the first nine months of 2020 has a surplus of USD 16.52 billion (doubling
that of the first nine months in 2019). Specifically, FDI enterprises have a trade surplus of USD
52.97 billion while domestic enterprises continue to embrace trade deficit.

1.1.1.4. Status of some services
Retail, travel, food and accommodation, transportation of passengers and goods services have

all been severely affected by Covid-19 pandemic in 2020. In particular, the most substantial
drop has been witnessed in the group of travel, tour operators, passenger transportation and
then the accommodation and food groups.

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Retail sales of goods still increased slightly by 4.8% because the State allowed most of the
supermarkets, food, and essential goods to maintain operations during quarantine to fight
against the pandemic.
Figure 2. Increase / decrease in revenue of service groups in the first 9 months
of 2020 compared to the same period in 2019 (%)

Source: GSO of Vietnam (announced on September 29, 2020)

Transport activity was the most severely affected in the first quarter of 2020, hitting its
trough in April 2020 (only 105.7 million tons of cargo compared to 156.6 million tons in
January 2020). However, by September 2020, transportation has flourished again to meet
the demands of trade and consumption at the end of the year, with the total volume of
goods transported reaching 156.8 million tons.

1.1.2. World economy
1.1.2.1. Economic growth
In the first half of 2020, the world economy witnessed a tremendous decline due to the
spreading of Covid-19 pandemic on a global scale, forcing governments of all countries
to simultaneously apply strict supervision on travelling, and shutting down non-essential

factories and service facilities.
In the third quarter of 2020, the restrictions were gradually loosened, many economic sectors
have become active again although the pandemic is still complicated and widespread. While
the recovery in China is happening faster than expected, the global economy still needs
more time to return to pre-pandemic activity levels, even with the prospect of a rather slow
recovery as new outbreaks tended to reappear in important economic centers in Europe and
America.

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According to a report by the International Monetary Fund (IMF) released in October 20201,
retail sales and consumer spending increased as economies reopened. However, enterprises
became generally cautious as industrial production in many countries was still much lower
than the December 2019 level.
According to the World Economic Outlook Report published on September 16, 2020 by the
Organization for Economic Cooperation and Development (OECD)2, the global output
declined in the first half of 2020 due to the Covid-19 pandemic, with a decrease of more
than 20% in several emerging and developed economies. Economies are affected in
varying degrees and times, yet all have witnessed sharp declines in almost all economic
activities when the unprecedented stringent disease prevention measures are applied.
Many enterprises are forced to shut down, cut production, declare bankruptcy, about 40% of
the workforce lost their jobs or reduced working hours. Besides, there also exists the burden
of unemployment benefits, social security, and public debt. Governments will encounter a
new public debt crisis when using large-scale stimulus packages to counteract the negative
effects of the Covid-19 pandemic.

Some drivers for growth have not fulfilled expectations in the second quarter of 2020 due to
the following reasons:
• Household spending on many durable goods has recovered relatively quickly, yet spending
on services, especially those requiring proximity between workers and consumers, or
international tourism is still down.
• The number of working hours has decreased significantly in most economies; thus,
governments are forced to provide subsidies to maintain household income.
• Corporate investment and international trade remain weak, constraining the growth of
manufacturing in many export-oriented economies.

1.1.2.2. Commerce
Measures to enhance disease control started coming into force in China and neighboring
Asian countries since the end of March 2020, causing global trade to decline by about 3.5%
in the first quarter of 2020 compared to the same period of 2019. Then, regulations on social
distance, travel restrictions, and transportation became effective in most countries and
territories in April 2020, even extending into May 2020. In areas where disease is severe, many
supply chains have been disrupted, and trade has continued to decline. In June 2020, facing
the risk of economic recession, many countries began to loosen the measures of blockade
and quarantine. Along with that, economic indicators such as production (PMI index), trade
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(import and export) and consumption gradually recovered after almost hitting the trough in
the second quarter of 2020.
Global trade fell by more than 15% in the first half of 2020, severely disrupting the labor
market due to job cuts, job loss and many businesses forced to close.
According to a report of the World Trade Organization (WTO) published on October 8, 2020,
global trade experienced more positive development in the third quarter of 2020, yet
without certainty. After decreasing by 14.3% in the second quarter of 2020 compared to
the first quarter of 2020, the trade showed signs of a gradual recovery in the third quarter
of 2020. While in the first half of the year, movement restrictions disrupted supplies, which
resulted in declining output and occupations, the third quarter of 2020 started to witness the
effects of the simultaneous application of appropriate fiscal and monetary policies in many
countries, helping to compensate a portion of income and creating a basis for consumption
and import recovery after the social gap measures are loosened.
Agricultural commerce registered a less significant decline than the world’s average level in
the second quarter of 2020, down 5% from an overall decline of 21%. This is attributed to
the fact that food, which plays a role as a basic need, continues to be produced and shipped
even in the strictest regulations. Meanwhile, the trade of fuel and minerals plummeted by
38% due to reduced price and fewer demands when traveling is restricted. Regarding the
manufacturing and processing industry, trade has been down 19%.

1.1.2.3. Fiscal and monetary
In 2020, the application of expansionary monetary and fiscal policies in many nations
helped to avoid risks of economic slumps while recovering the economy. Apart from a large
sum of money in circulation, most central banks in the world have reduced and
maintained interests at the lowest level ever to promote investment and consumption.
The financial and monetary markets started to stabilize since the end of the second quarter
of 2020 despite the complicated and expanded situation of Covid -19 along with depressing
economies in the first half of 2020. Money market continued to be stable, the U.S dollar
declined slightly, by the end of the third quarter of 2020, the U.S Dollar Index fell to below

93.5 points, down over 2% compared to the end of second quarter of 2020. Compared to the
same period in 2019, the U.S Dollar Index decreased by 5.3%, specifically, down 7% against
the euro, down 1.9% against the Yen, down 19.5% against the Russian Ruble, down 5.5%
against China’s Yuan ... The decreased value of the USD is likely to have a positive impact to
help promote the growth of the US economy in the context that there is not much room left
for the country’s economic stimulus policy.

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1.2. World logistics industry in 2020 and future trends
1.2.1. World logistics industry in 2020
1.2.1.1. Overview
In 2020, the global logistics industry has heavily been affected by the Covid-19 pandemic.
Although worldwide governments attempted to maintain the supply chain of goods and give
particular priority to the circulation of essential goods, due to disease control measures and
many workers in this sector being forced to stay at home, there were times when the whole
operation was paralyzed ... While logistics activities in some places were delayed because of
the pandemic, some other segments such as logistics for e-commerce became overloaded
because the number of shoppers and home delivery orders increased dramatically. In both
cases, without thorough preparation, logistics businesses and customers (the goods owners)
will have great difficulty adapting to the new situation.
The global logistics market in the second half of 2020 has mainly been driven to restore
international trade flows after the pandemic. Moreover, the post-Covid-19 trade facilitation
and economic stimulus policies implemented by the Government also assisted market
expansion.

The main drivers of this market in the second half of 2020 have been the strenuous efforts
from Governments, international organizations and enterprises to help stabilize the supply
chain during the complicated Covid-19 pandemic. On the contrary, factors holding the
market have been the lack of labor, the declining demands and the lack of tools to effectively
prevent the pandemic during logistics operations (for example, in many places there is a lack
of Covid test kits).
Air freight experienced the heaviest damage of Covid-19 pandemic in 2020. Compared to
passenger transport, the impact of Covid-19 on freight transport was mild since regulatory
restrictions are less stringent. For example, nearly all passenger flights had been canceled
during the Covid-19 pandemic. The International Air Transport Association (IATA) released
its financial outlook for the global air transport industry showing that airlines are expected
to lose $84.3 billion in 2020 for a net profit margin of -20.1%. Revenues (including both
passengers and cargo) will fall 50% to $419 billion from $838 billion in 2019. Compared to
2019, overall freight tonnes carried are expected to drop by 10.3 million tonnes to 51 million
.tonnes. However, a severe shortage in cargo capacity due to the unavailability of
belly cargo on (grounded) passenger aircraft is expected to push rates up in 2020.

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Road freight is the largest segment of the transportation market in the world. Compared to
air and waterways, road transport was less affected by Covid-19. Road transport is considered

as an important mode of transport during the pandemic. The trucking
segment's primary challenge Rail freight is less affected by the pandemic thanks to its
own transport domain. Even in some major markets like China, the share of rail in total
freight increased during the time the country was taking strict measures to prevent
pandemics. The year 2020 also witnessed policy efforts on developing infrastructure and
expanding the railway network, applying science and technology, “greening” the railway
industry ... in Europe and North America to form a hub and established the role of the
railway as an important part of the multi-modal transportation.
The impact of Covid-19 on freight transport by sea and seaport has become more apparent
in the second quarter of 2020.
Difficulties with the sea and seaport industry in the first half of 2020 were due to not only
a decrease in trade volume but also the shortage of workers and the inability to maintain
crew exchange operations as usual, which resulted from regulations on the restrictions and
quarantine of migrants. New medical protocol requirements in the context of pandemics
and even in the “new normal” phase resulted in more procedures at ports, affecting the
overall route of fleets.
According to the Global Transport Forum data published in October 2020, in the EU, the
volume of sea transport had stabilized and become higher than the pre-crisis level of 2008
during the period between 2014 and March 2020. However, from April to June 2020, EU27’s
sea freight volumes decreased by 4% and that of the US down 11% compared to June 2008.
In May 2020, exports by sea from EU27 to BRICS were only 79% of their pre-crisis peak in
2008 and exports to Asia were only 90%.
As observed by the Global Maritime Hub4, after a contraction of circa 3% in the capacity
offered on the sea freight market in the first half of 2020 compared with the same period
of 2019, in the third quarter, carriers have increased their offer with deployed capacity now
marginally higher than the capacity offered this time in 2019. Looking at ships on order,
shipping lines are showing a willingness to put more capacity into the container shipping
market. An increase of more than 6% is estimated in the total fleet capacity in TEU by the
end of 2021 and a further increase of circa 2% in 2022. The percentage of ships of 15,000
TEU or more is expected to represent 21.8% of the total global fleet.

The warehousing and storage markets in 2020 were mainly driven by the e-commerce and
cold storage segments. In particular, the increasing demand for cold storage will continue
to drive the growth of this market in near future. Companies that currently have the biggest
influence on the global warehouse market are: A.P. Moller Maersk AS, C.H. Robinson
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Worldwide Inc., CEVA Logistics AG, Deutsche Bahn AG, Deutsche Post AG, DSV Panalpina AS,
FedEx Corp., Kuehne Nagel International AG, United Parcel Service of America Inc., and XPO
Logistics Inc.

1.2.1.2. The situation of the logistics industry by geographical area
The Asia-Pacific logistics service industry is developing significantly, with rapid growth in
ASEAN member countries and the influence of major economies such as China and India.
In addition, the active support of governments in the region’s logistics industry is also a
factor driving the industry’s growth. China has begun to recover from the Covid-19 pandemic
faster than any other countries and as a result, this market is witnessing the evolution of the
logistics industry, especially logistics for e-commerce.
ASEAN member countries have also basically controlled the 2nd and 3rd wave of the
pandemic. This has allowed logistics companies and supply chains to meet the needs of
consumers in the pandemic situation.
Increasing intra-Asia trade, along with an increase in import regarding not only production

inputs but also consumer products, is an important driving force for the Asian logistics
industry. China’s Belt and Road Initiative has resulted in huge investments in transport
infrastructure in Asia as it seeks to integrate into Asian and European markets.
To date, most goods are transported to the United States and Europe via the East-West trade
routes. However, the trend in recent years has been the emergence of intra-Asian trade.
China, Japan and South Korea now have modern, large-scale container terminals in other
Asia-Pacific countries that are investing billions of dollars to upgrade logistics infrastructure
to meet demand of container freight.
As for the cold chain market (including cold storage and cold transportation), the Americas
Zone is expected to have the largest market share in the period 2020-2025.
There is an increasing demand for cool and frozen food products in North American
countries. In the severe and prolonged Covid-19 pandemic scenario, the North American air
and sea freight forwarding market was expected to decrease by 12.1% and 9.5% respectively
by 2020, compared to the previous year. Covid-19 also affected US rail freight, and hit the
hardest in April 2020, with a 25.2 percent decrease in tonnage compared to April 2019.

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1.2.2. Prospects and main trends
1.2.2.1. Prospects
According to the “COVID-19 Impact on Logistics & Supply Chain Industry Market by
Industry Verticals (Automotive, FMCG, Healthcare, Energy & Utilities, Industrial Machinery
& Equipment), Modes of Transport (Roadways, Railways, Airways, Maritime), Region - Global
Forecast to 2021” by ResearchAndMarkets.com5, the global logistics market size is projected
to grow from USD 2,734 billion in 2020 to USD 3,215 billion by 2021 (an increase of 17.6%).

According to market research by Technavio6, the world’s 3rd party logistics service (3PL)
market will increase by about USD 76.28 billion in the period 2020-2024, with an average
growth rate of 6% per year. Contribution of 37% to the growth came from North America.
The main driver of growth is the demand for multimodal transport. The multimodal freight
market will grow at an average rate of 7% per year during the period 2020-2024, reaching a
size of about 49.84 billion USD.

1.2.2.2. Major trends7
World trade is affected and is at risk of sudden disruption due to the Covid-19 pandemic,
natural disasters (floods in Asia) and trade tensions between major economies that will
directly affect the global logistics trends in the coming time. In addition, other major impacts
could also come from Brexit, the role of the WTO on global trade, the presidential election of
the United States or the process on how to harmonize global tax laws on digital corporations.
•

Challenges from the Covid-19 pandemic are promoting automation in the logistics
industry (transportation, port services, warehousing, transportation ...) and will become
a major trend in the short term. Agents throughout the value chain will prioritize
improving operational efficiency by investing in technology.

•

E-commerce flourishes in the context of increasing online purchases because Covid-19
is also a noticeable factor helping the e-commerce market to develop vastly. Consumers’
buying behaviors and expectations have changed with higher demand for fast goods,
free short shipping, competitive pricing and convenient reverse logistics. The rigorous
delivery schedules challenge traditional logistics and supply chain models, forcing
companies to adjust their strategies to provide low-cost on-demand delivery. The share
of e- commerce in the retail market is increasing fast, even exponentially.

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Box 1. Third party logistics services facing the impact of Covid-19:
New context, new services
Third-party logistics service providers (3PLs) are often among the pioneers of service
innovation, because to stay strong, they are forced to continuously adjust themselves to
keep up, even catch up with the demands of business owners.
In a context of unexpected external challenges such as natural disasters and pandemics,
a developed special service is risk management, response planning and crisis handling.
In 2019, 33% of 3PLs said they offered risk management service; in 2020, it jumps to 46%.
Given the hazards that COVID-19 has presented to U.S. shippers, from factory closings in
China to the shuttering of countless businesses at home, the need for such services will
continue to grow.
Along with typical services for planning and executing logistics processes, and along
with technology solutions, many 3PLs also offer special services related to the supply
chain. For example, most 3PLs in our survey can serve as consultants, helping shippers
design and/or implement logistics and transportation strategies.
Three-quarters of respondents help customers deliver products directly to retail stores,
rather than to retailers’ distribution centers. A large segment of respondents (68%) offer
reverse logistics or product life-cycle management, and 62% help shippers with imports,

exports, and customs clearance.
One non-traditional area where the profile of 3PLs is increasing is information technology.
In 2020, 72% of shippers are reported to buy some kind of logistics technology from a
3PL, up from 56% in 2019.
As for the transport segment, while covering a range of transportation modes, 3PL
respondents also offer a variety of specialized transportation services.
Shippers tend to find a 3PL partner who can handle the entire process for them, including
loading and unloading at different locations and circumstances. A dynamic 3PL that does
not want to lose customers is forced to diversify its network of shipping partners to fulfill
the demand of its shippers.
Regarding the service evaluation of 3PLs, three-quarters of shippers who responded to
the survey said that service is more important than price in a relationship with a 3PL.
When being asked to name their top three 3PLs and explain their choices, phrases
namely (i) excellent service, (ii) willingness to go the extra mile, and (iii) personal touch
and innovation figured prominently in the responses.
Regarding the question of why not choosing or terminating a 3PL, 85% of shippers
responded that due to unsatisfactory service, including 62% who name poor customer
service outright, and 23% who note that a partnership can fall apart when a 3PL fails to
meet expectations. Only 20% name money as the top reason for failure, based either
on the cost of using an incumbent 3PL or the fact that the shipper has discovered more
competitive alternatives.
Source: Survey results by Inbound Logistics (2020)

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•

Innovative, customized online solutions to meet the specific requirements of customers
... will form a segment of high-end logistics services.

•

The warehousing industry is expected to significantly transform thanks to automation to
accommodate the rapid growth of cross-border e-commerce and the growing demand
for integrated supply chain solutions.

•

To help businesses in the industry catch up with the general trend, the market for
developing and applying logistics software will be a spotlight of the global logistics
industry in the coming time.

•

In particular, the trend of “green” logistics continues to be an important highlight. Natural
disasters and pandemics in recent years and especially in 2020 are not only a warning
sign, but also an affirmation for the world to be more determined in environmental
protection and sustainable development. As one of the major polluting sectors (besides
industrial production), the industry of logistics in general and transportation in particular
must be stricter when regulating environmental protection and occupational safety in
the coming time.

Regarding the aforementioned trends, to make the most of the opportunities, logistics
service providers should focus more on fast-growing segments such as multi-modal transport,
e-commerce logistics, and cold chain logistics ..., at the same time cooperating

more closely to ensure the goals of “greening” according to international regulations and
commitments as well as for its own sustainable development.
Box 2. The development trend of logistics in global cold chain services
According to Prnewswire8, the global cold chain monitoring market was valued at USD
4.7 billion in 2019 and is projected to reach USD 8.2 billion by 2025; it is expected to grow
at a CAGR of 12.5% from 2020 to 2025.
The key factors driving the growth of the cold chain monitoring market are the increasing
global demand for temperature-sensitive drugs (pharmaceuticals, vaccines, cosmetics,
food). Therefore, since the beginning of 2020, cold chain logistics service providers have
continuously had to improve their processes and technology to meet the requirements
of the State and consumers in the “new normal” condition.
Pharmaceutical and health care products are expected to be prominent segments in this
market between 2020 and 2025.
Product-specific varying temperature requirements force logistics companies to always
prepare new options for their customers or to meet new regulatory standards. In the
immediate future in 2021, if Covid-19 preventative vaccine is introduced into widespread

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vaccination programs, the transportation and preservation of vaccines will become an
urgent need in all countries. Ensuring the quality of drugs or vaccines throughout the

supply chain is a key factor driving the demand for cold chain solutions in 2021.
Furthermore, the Covid-19 pandemic will continue to push governments to introduce
new health protocols and regulations, impacting the pharmaceutical and healthcare
industries, meanwhile, facilitating strong growth. On the other hand, it places higher
demands on cold chain service.
In addition, the increasing demand for dairy products, vegetables and fruits, along with
the increased import and export of vegetables and fruits, is also driving the demand for
cold chain solutions in the coming time.

1.3. Policy on logistics
1.3.1. General policy on logistics
The year 2020 is of particular importance as the final year of the Socio-Economic Development
Plan 2016-2020, which creates momentum for the implementation of the Socio-Economic
Development Plan 2021 - 2025 and the Socio-Economic Development Strategy 2021 - 2030.
The year 2020 also witnessed the multifaceted effects of the Covid-19 pandemic on Vietnam
and the whole world. In that context, the Government, Ministries, localities promptly issued
many policies related to logistics, in order to, on the one hand, still ensure the role of logistics
in maintaining supply chains of goods and services. ; on the other hand, shaping innovative
and even breakthrough paths for Vietnam’s logistics industry, contributing to the sustainable
development of the country.
Targets set for logistics and transport services under the Project “Plan on restructuring the
service industry through 2020, visions to 2025”:
On February 19, 2020, the Prime Minister signed Decision No. 283 / QD-TTg permitting the
project “Plan on restructuring the service sector through 2020, vision to 2025”. Accordingly,
the goals for logistics and transportation services are:
- By 2020, the total volume of transport of the whole industry will be about 1,300 billion tons.
km (equivalent to 2.2 billion tons of cargo), 340 billion passengers.km (equivalent to 6.3 billion
passengers) with the average annual growth rate of cargo and passenger transportation in
the period 2013 - 2020 is from 8% to 10%.
- By 2025, the contribution of logistics services to GDP will reach 8% - 10%, the service

growth rate will reach 15% - 20%, the rate of outsourcing logistics services will reach 50% 60%, logistics costs will decrease to 10% - 15% equivalent to GDP, being ranked at the 50th
place or higher by the Logistics Performance Index (LPI).
To achieve these objectives, the main tasks out for the logistics and transportation sectors include:

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