Vietnam’s Ambitious Logistics Strategy for Economic Growth
Vietnam is swiftly transforming its logistics sector with a national strategy aimed at modernizing infrastructure, boosting efficiency, and enhancing its competitive edge in global trade. This development comes as the country emerges as a major manufacturing and e-commerce hub, indicating a clear need for streamlined logistics, particularly for small and medium-sized enterprises (SMEs).
Importance of the Logistics Sector
Logistics is pivotal to Vietnam’s economic growth plan, connecting producers to global markets and reducing supply chain costs. As honed production capabilities and expanding digital trade set Vietnam apart, the logistics sector ensures that these advances reach international partners efficiently.
International Rankings and Strategic Framework
In 2023, Vietnam made significant strides, ranking in the top 50 of the World Bank’s Logistics Performance Index (LPI). Building on this recognition, the government introduced the National Logistics Service Development Strategy (NLSDS), outlined in Decision No. 2229/QD-TTg. This strategy seeks to improve infrastructure, lower costs, and enhance high-value services within the logistics framework.
Overview of the National Logistics Service Development Strategy (NLSDS)
Approved in October 2025, the NLSDS aims to elevate logistics from a supporting role to a primary economic sector. It focuses on building a sustainable, efficient logistics industry that capitalizes on Vietnam’s strengths in global value chains. Key components of this strategy include:
- Improving Human Capital: Enhancing skills and training for the workforce.
- Digital Transformation: Implementing reforms to improve market efficiency and leverage technology.
- Infrastructure Investment: Committing substantial resources to various projects that position Vietnam as a key logistics hub.
Goals and Targets from 2025 to 2050
The NLSDS sets ambitious targets for the logistics sector, which include increasing the logistics sector’s value-added share of GDP from 5-7% by 2035, with a long-term goal of 7-9% by 2050. It also aims for an average annual growth of 12-15% from 2025 to 2035.
| Indicator | 2025–2035 Targets | 2050 Targets |
|---|---|---|
| Logistics value added share of GDP | 5% – 7% | 7% – 9% |
| Average annual logistics growth | 12% – 15% | 10% – 12% |
| Logistics outsourcing rate | 70% – 80% | 80% – 90% |
| Logistics costs as a % of GDP | 12% – 15% | 10% – 12% |
Key Implementation Tasks of the NLSDS
To achieve its goals, the NLSDS outlines nine core tasks that create new incentives for logistics businesses. Here’s a closer look at some of these essential tasks:
Strengthening the Legal Framework
Vietnam plans a comprehensive review to ensure that logistics regulations align with operational realities and global standards. Streamlining administrative procedures and improving competition rules are pivotal to this effort.
Developing Modern Infrastructure
The strategy prioritizes upgrading multimodal transport networks, modernizing logistics hubs, and expanding free trade zones. Investments will target various infrastructures, including roads, railways, and ports, to boost efficiency and connectivity.
Enhancing Regional Connectivity
Shipping networks across significant economic regions such as the Red River Delta and Southeast will be developed to promote seamless logistics flows. Future plans even include extending these networks to China and India, enhancing Vietnam’s connectivity within ASEAN.
Current Performance in Logistics
Analysts estimate that Vietnam’s logistics market could reach approximately $52 billion by 2025, with a CAGR of 6.67%. The heavy reliance on SMEs means that efficiency improvements in logistics directly influence a large sector of the Vietnamese economy.
Comparison with ASEAN Competitors
Vietnam stands at a mid-level in logistics performance within ASEAN, trailing behind nations like Singapore and Thailand, yet showing immense growth potential. The NLSDS aims not only to close this gap but also to position Vietnam as a competitive logistics player through cost reductions and improved service quality.
Foreign Direct Investment Opportunities
Vietnam is actively seeking foreign investment to fuel its logistics strategy. Key areas with high potential for foreign investors include:
Port-Adjacent Logistics
Logistics facilities near seaports, especially around the Cai Mep-Thi Vai complex, are gaining attention. The establishment of free trade zones in these areas aims to attract significant logistics and manufacturing projects.
Fulfillment Centers for E-commerce
With the boom in online retail, there is a growing demand for modern fulfillment centers. SMEs require robust nationwide distribution networks to reach customers efficiently.
Cold-Chain Solutions
As the trade in perishable goods grows, demand for cold storage and transportation is on the rise. This sector represents a lucrative opportunity for foreign investors with expertise in cold-chain logistics.
Challenges in Implementation
While the objectives are ambitious, the NLSDS faces hurdles in coordination among government levels, customs procedures, skills shortages in the workforce, and a complex regulatory environment. Addressing these issues effectively will be critical for the strategy’s success.
By focusing on these various aspects of Vietnam’s logistics strategy, we see a comprehensive effort to enhance its position in the global economy while addressing domestic challenges and leveraging opportunities for growth.