As Vietnam’s economy is expected to recover and achieve a growth target of 6 per cent in 2024, logistics businesses are optimistic about the logistics industry in 2024.

On December 6, Vietnam Report officially announced the Top 10 Most Reputable Logistics Companies in 2023. It found that 34.5 per cent of logistics businesses predict the logistics industry will improve in 2024. This is a bright spot amid the challenging logistics landscape. Another is that 60 per cent of logistics companies record lower total costs in 2023.

The logistics industry is associated with manufacturing, distribution, and goods consumption in both local and foreign markets. However, headwinds like political instability and inflation have put an end to the rapid growth of the global economy. This has negatively affected the business situations of logistics companies.

According to Vietnam Report’s survey, most Vietnamese logistics companies experienced a slump in business results in 2023. Notably, 66.7 per cent of companies posted shrinking profits, of which 40 per cent recorded a significant decline.

The pricing war has become more intense as more foreign companies have penetrated the market. They are willing to suffer losses for three to five years to vie for market share.

Along with the e-commerce boom, e-commerce operators have developed in-house logistics firms to serve rising demand. In a turbulent year, e-commerce development and the demand for faster delivery have changed the operation structure of many companies.

The survey found that logistics companies, and last-mile delivery firms in particular, are being forced to deliver smaller value packages more frequently. Businesses do not have time to wait until they have enough orders to fully fill the vehicle.

To join the race, logistics businesses need to ensure vehicles reach maximum load capacity, optimise costs, and take advantage of scale. The challenge also prompts businesses to optimise operations and accelerate the application of automation technology and digital transformation. This is even more difficult for small logistics businesses that do not have enough financial and workforce capacity.

Over the past few years, the growth rate of the Vietnamese logistics sector has consistently hovered between 14-16% annually, with a scale of $40–42 billion per year. According to data by Mordor Intelligence, Vietnam’s logistics market size is estimated at $45.19 billion in 2023 and is expected to reach $65.34 billion by 2029, growing at 6.34 per cent during the forecast period.

Vietnam Investment Review