Vietnam logistics costs account for 16 per cent of GDP

Vietnam's logistics sector accounts for a significant portion of the country's economic output, costing around 16 per cent of its GDP. This high cost is a concern, but digital transformation is viewed as a crucial solution to both cut costs and improve efficiency throughout the logistics supply chain. Deputy director of the Ho Chi Minh City Investment and Trade Promotion Centre, Ho Thi Quyen, emphasised that digital transformation is a key strategy for lowering logistics costs to between 12-15 per cent of GDP by 2025-2035.

However, the sector faces challenges in adopting digital solutions. Larger companies have seen greater success in implementing electronic documentation, while smaller and medium-sized enterprises grapple with financial and technological constraints. Ngo Khac Le, deputy secretary-general of the Vietnam Logistics Business Association, warned that unless swift action is taken, Vietnamese logistics companies risk falling behind in the regional and global supply chain.

To bridge this gap, state agencies should upgrade digital platforms and enhance interoperability between systems, allowing businesses to reduce their reliance on paper documents and streamline processes. Improving logistics connectivity between key regions, such as Ho Chi Minh City and neighbouring provinces, is also critical for expanding the sector's development potential and optimising cargo transportation.

Industry leaders highlight the importance of closer coordination between authorities, associations, and businesses in logistics planning and infrastructure development. They suggest exploring sandbox mechanisms to trial new models, ensuring policies keep pace with the sector's rapid growth. These calls for action become more pressing as Vietnam attracts more foreign investment, with companies like Nestlé Vietnam and Intel Products Vietnam expanding their production capacity and export capabilities.