Logistics in Vietnam: Industry Overview 2024

Logistics in Vietnam are becoming more and more important to Vietnam’s economy. This is in line with booming international trade, the result of a myriad of free trade agreements combined with an abundance of low-cost labour, and generous tax incentives.

In fact, last year Vietnam recorded nearly US$700 billion in two-way trade. This was a slight decline over 2022, but a huge jump from the US$500 billion the country clocked in 2019. Furthermore, this looks set to climb further in the near future with a number of large-scale manufacturing projects under construction.

As a result, alongside this boom in manufacturing, a huge network of depots, seaports, airports, and warehouses has developed to get all of those manufactured goods to where they need to be. Not to mention the trucks, planes, and cargo ships connecting them together. That said, navigating this complex network can be tricky.  With this in mind, this article runs through getting goods into and around Vietnam as well as goods storage and last-mile delivery.

Vietnam annual freight, tonnes-kilometres

Source: OECD Data Explorer

Freight forwarding in Vietnam

Firms that want a quick and easy solution to managing their freight in Vietnam may find engaging a local freight forwarding company the most effective way forward. This is a fairly straightforward process with Vietnam freight forwarding companies well versed in managing logistics in Vietnam for foreign enterprises.

Professional freight forwarding services in Hanoi and Ho Chi Minh City are a dime a dozen and most market entry consultancies will be able to connect new firms entering the Vietnam market with a reputable freight forwarding company.

That said, a solid understanding of logistics in Vietnam before engaging a freight forwarding company, can help to make the process smoother and easier.

Shipping goods to and from Vietnam

Airfreight in Vietnam

Airfreight is popular for high-value and perishable goods. Fresh fruits and vegetables or high-value electronics may be most efficiently delivered via air freight. Most international logistics companies service Vietnam–DHL and FedEx, for example. These companies usually fly to the big cities, Hanoi and Ho Chi Minh City, however, they may also sometimes fly to regional airports if demand warrants it and facilities can accommodate international air freight.

Key airports in Vietnam for international freight

IATA – International Air Transport Association, ICAO – International Civil Aviation Organization

Source: Airports in Vietnam

Vietnam domestic air cargo services

Vietnam claims three major airlines offering domestic air cargo services. These include Vietnam Airlines, VietJet Airlines, and Bamboo Airways. However, after a financially challenging two years, Bamboo Airways’ fleet has been considerably reduced. Therefore, as far as consistent service and volume Vietjet and Vietnam Airlines are really the only way to go in terms of local air freight carriers.

International courier services in Vietnam

Most of the key international air freight couriers operate in the Vietnam market. This includes DHL, FedEx, TNT, and UPS. These services are well-known and effective, however, they can also be somewhat more pricey than using passenger airlines.

Sea freight in Vietnam

For non-perishable items or bulky low-value items like garments manufactured in Vietnam, sea freight is likely the most effective option for shipping goods to or from Vietnam.

Vietnam has approximately 36 ports scattered along its coastline. However, Hai Phong and Ba Ria-Vung Tau are by far the largest and can accommodate the biggest volume of goods. These service key manufacturing hubs in northern Vietnam and southern Vietnam respectively.

Key seaports in Vietnam

Source: Vietnam Seaports

Port fees in Vietnam

Seaport fees are not standardised in Vietnam. Instead, each port charges its own fees.

Vietnam’s national shipping fleet, dead-weight tonnage 000s

Source: UNCTAD Maritime profile: Viet Nam 

Moving goods overland in Vietnam

Firms that are shipping goods to Vietnam from within Asia could also use land borders. This is common for firms where Vietnam is a part of a longer supply chain. For example, fabric might be woven and dyed in Cambodia and then shipped to a clothing supplier in Vietnam. There are a number of land border crossings connecting Vietnam to its neighbours scattered along its northern and western borders.

Key land border crossings in Vietnam

Source: Vietnam Land Ports

Railways and roads in Vietnam

Vietnam has around 2,600 kilometres of railway line. There have been many attempts to extend the length of Vietnam’s railways over the last decade but progress has been slow much like Vietnam’s trains–currently Vietnam’s trains average speeds of barely 50 kilometres per hour. These relatively slow speeds are off-putting for many export enterprises which instead tend to utilise Vietnam’s roads.

There are around 195,468 kilometres of roads in Vietnam, however, these are not always of the best quality. As of 2013, only about three-quarters or 148,338 kilometres worth were paved with the remaining 47,130 unpaved, according to the CIA World Factbook. That said, this is by far the most popular means of transport for import-export enterprises in Vietnam with the Vietnam Logistics Association estimating that 99 percent of goods shipped to or from the port at Hai Phong done so via road.

Customs procedures in Vietnam

When goods arrive in Vietnam or are ready to be shipped from Vietnam, as they must anywhere else in the world, they are subject to customs inspection. Customs procedures in Vietnam are governed by the Law on Customs.

Paperwork

Firms importing or exporting goods need to complete and submit a dossier of documents to customs. This can in most cases be submitted online. It will include information on what the goods are, where they are from, their value, and a number of other details. The Vietnam National Trade Repository offers a detailed description of each item that is required.

Priority customs treatment

Priority customs treatment is a way to fast-track customs procedures for importing and exporting goods, out of and into Vietnam. Essentially this reduces the time goods spend in Vietnam’s ports and, depending on the volume of trade a business is doing through said ports, can be a significant time-saving measure. This incentive program is outlined in the Law on Customs 2014 but is implemented through a series of decrees and circulars and can be quite nuanced. That said, it essentially means that firms privy to priority treatment can submit incomplete paperwork and still get their goods shipped. They are also subject to fewer inspections.

Storing goods in Vietnam

There are warehouses spread out all over Vietnam and which is best for a particular enterprise will depend on the goods they are shipping and their position in the supply chain.

Bonded warehouses in Vietnam

Bonded warehouses in Vietnam are where goods are stored while they wait to be either processed by customs for incoming goods or where they wait after being processed by customs to be exported.

The benefits of a bonded warehouse are that goods can undergo customs procedures in place. For example, a manufacturer may have a bonded warehouse on site where customs can inspect their goods before they are taken to a port to be shipped. This can give the firm greater security in that its goods are not waiting at the port to be inspected and can simplify the process in that all goods are in one place and can be checked in bulk.

Cold storage in Vietnam

A surging middle class has seen demand for fresh foods soar in Vietnam. In particular, dairy products have become very popular in Vietnam, with the country importing US$438 million worth of milk and milk products in the first five months of 2024. These goods, however, need to be kept cool and as a result, cold storage warehouses in Vietnam are proliferating.

Of note, Ken Research estimates that Vietnam’s cold chain industry could be worth as much as US$10.2 billion by 2026. This huge demand has seen a phenomenal boom in cold chain services in Vietnam with cold storage providers popping up all over the country. These are fairly easy to access through most reputable logistics service providers.

Standard warehouses in Vietnam

Aside from cold storage warehouses and bonded warehouses, there are of course a great many regular warehouses all over Vietnam. Many larger businesses choose to build their own warehouses in Vietnam, however, ready-built warehouses are also a popular option can be a simpler and cheaper option.

Ready-built warehouse rents in Vietnam, per square metre

Source: CBRE Insights and Research

Last-mile delivery in Vietnam

A boom in e-commerce in Vietnam has facilitated a concurrent boom in last-mile logistics services. Whereas many e-commerce platforms manage their own last-mile logistics, many use third-party last-mile logistics providers. Grab, GHTK, as well as the more traditional Vietnam Post. 

These services generally use motorbike delivery services with the narrow streets of Vietnam’s cities making it difficult for bigger vehicles to get around quickly. That said, transport infrastructure in Vietnam’s biggest cities is often underdeveloped and congestion can be intense with the potential to delay delivery times which could damage a firm’s reputation and could see goods spoil in the case of cold storage items.

On the flip side, these services can be very cheap with competition flourishing amid a relatively easy low-cost setup for services utilising the ride-hailing app model whereby drivers are treated as contractors and paid per delivery. This increased competition, while providing cheaper delivery costs, also means that there are risks that some of these firms could fail or it may decrease reliability as firms are incentivised to cut corners in order to bring down costs. Essentially, there is a clear quality-cost trade-off.

Foreign investment in logistics in Vietnam

Foreign investment in the sector is popular but there are some business lines in which foreign investment is prohibited. These business lines include dismantling used ships, waterway traffic management, maritime safety services, and inspection services.

Furthermore, foreign investment is restricted in a number of areas codified in Vietnam in Decree 163/2017/ND-CP. These are mostly in line with World Trade Organisation regulations and include: air navigation services, airlines and air transport, marine transportation services, container handling services, Inland waterway or rail freight, road transport services, and rail transport services. These all have varying caps on foreign ownership. For specifics see: Vietnam’s Foreign Ownership Limits 2024: Transport and Logistics 

What’s next?

Logistics in Vietnam are a core component of the country’s export boom and as a result, in recent years, logistics development has been huge. That said, there are still a number of gaps to fill and these spaces could cause problems for firms looking to ship goods to or from Vietnam or could be opportunities for foreign logistics investors.

With this in mind, good quality logistics support could be crucial to a firm’s success in Vietnam. Firms looking for more information should→let us connect you with an expert.

Furthermore, foreign firms can keep track of all of the latest developments in Vietnam’s logistics industry by subscribing to the-shiv.