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US logistics, supply chain management firm opens Vietnam office

Flexport, an American logistics and supply chain management firm, has opened an office in Vietnam, which has become its second-largest maritime transport market, according to VnExpress International.

Of note, in 2023 Vietnam’s transportation and storage sector surpassed VND 502.56 trillion or US$19.807 billion, constituting 4.92 percent of the country’s total GDP. 

However, high logistics costs could prove a threat to Vietnam’s competitive edge. Due to underdeveloped transport infrastructure and limited connectivity between seaports, airports, warehouses, and industrial parks, logistics costs in Vietnam are about 18 percent of GDP. This is higher than many other countries, Dang Vu Thanh, Vice Chairman of the Vietnam Logistics Business Association told a roundtable at the Vietnam International Logistics Exhibition last year.

With this in mind, greater competition in the sector may be the answer. That said, foreign ownership limits in logistics services can be very restrictive. For example, foreign firms are prohibited from owning more than 34 percent of an airline. This can make operating in logistics in Vietnam challenging.

See also: Logistics in Vietnam: Ultimate Guide (2024)

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