The Future of Vietnam’s Logistics Industry: Challenges and Opportunities
In October, Deputy Prime Minister Bui Thanh Son signed Decision No. 2229/QD-TTg, formalizing an ambitious strategy for the development of Vietnam’s logistics services from 2025 to 2035, with a long-term vision towards 2050. This framework positions logistics as a vital backbone of Vietnam’s economic ambitions, crucial for maximizing import-export activities and achieving sustained double-digit growth.
Goals for Growth
The logistics strategy outlines a target for logistics services to contribute between 5-7% of Vietnam’s GDP by 2035. To support this, the country’s industrial sector is expected to grow at an impressive rate of 12-15% annually. Key objectives include having 70-80% of enterprises outsourcing logistics services and reducing logistics costs to 12-15% of GDP. However, the road ahead is fraught with challenges, particularly the urgent need for a skilled workforce to align with this rapid growth.
Talent Crunch in Hai Phong
In Hai Phong, a hub of import-export activities in northern Vietnam, businesses are increasingly struggling to find qualified workers. Mr. Nguyen Huy Truong Giang, General Director of Minh Giang Import-Export International Co., Ltd., highlighted the difficulty in recruiting mid-level staff and vocationally-trained individuals who can manage specialized machinery like forklifts and cranes. Despite competitive starting salaries of VND20-25 million (around $770-$960), the demand far exceeds supply, often leading companies to retrain new hires extensively.
Mr. Nguyen Minh Duc, Vice Chairman of the Hai Phong Logistics Association, emphasized that the high degree of internationalization in logistics makes it imperative for local operators to recruit workers equipped with modern skills, such as digital navigation and cybersecurity.
Bridging the Skills Gap: The Aus4Skills Program
As local businesses face these staffing challenges, the Australian government has initiated the Aus4Skills program, investing A$86 million (approximately $56 million) to support Vietnam’s socio-economic growth. This program seeks to build a sustainable workforce to underpin the logistics sector by strengthening vocational training policies.
A cornerstone of Aus4Skills is the Promoting Industry Linkages with Vocational Education and Training Project (Aus4Skills VET), which promotes an industry-driven skills development model. Logistics is a priority sector within this initiative, aiming to align training with the practical requirements of logistics operations.
Innovative Training Models
One significant player in this initiative is the Maritime – Inland Waterways College No. 1 (MIC1), which became one of the first colleges to implement the Competency-Based Training and Assessment (CBTA) model. This approach incorporates direct input from logistics companies in curriculum design to student evaluation, ensuring that training meets the evolving needs of the industry.
Since adopting the CBTA model in 2018, MIC1 has updated 436 training modules and improved its teaching methodologies to Australian standards. The college has not only increased collaboration with logistics firms but also engaged in technical transfer and supported neighboring vocational institutions. The reach of Aus4Skills has benefited over 15,000 students and educators through training sessions, workshops, and site visits.
Industry Benefits and Graduate Success
The impact of this partnership is palpable. Mr. Do Hong Hai, Vice Principal of MIC1, describes how the college has transitioned from a newcomer to a leading training institution in logistics. The number of logistics companies partnering with MIC1 has grown significantly—from just 12 MoUs in 2019 to 21 in the present year. Enrollment in logistics programs has skyrocketed by 285% since the project’s inception, with graduate employment rates nearing 100%.
Industry leaders express appreciation for the program’s focus on actual business needs. Ms. Tran Thi Phuong Anh, Director of Greenport Co., Ltd., underlined the advantage of having students trained in accordance with the specific requirements of their companies, which enables them to hit the ground running from day one.
Supply Chain Efficiency and Rapid Adaptation
For many companies, the traditional lengthy training periods for new hires have been drastically reduced thanks to the Aus4Skills program. Mr. Quach Minh Dung, Head of Supply Chain Management at Bee Logistics Corporation, noted that while it previously took three to six months to onboard new employees, graduates from the program now require just over a month of training. This efficiency not only saves costs but also allows firms to quickly capitalize on business opportunities.
Lingering Challenges
However, even with the successes of programs like Aus4Skills and the ongoing collaboration with institutions like MIC1, significant challenges persist. Mr. Cao Van Duong, Project Management Team Leader at MIC1, lamented the difficulties colleges face in obtaining financing for the necessary simulation equipment and specialized tools required for effective logistics training. As public funds are tightening, the need for state investment in logistics-related equipment becomes even more critical.
Mr. Duong advocates for the expansion of the list of logistics equipment eligible for public funding, crucial for training institutions to align with industry demands and secure the necessary resources to provide relevant education.
Looking Ahead
As Vietnam’s logistics industry continues to expand, it must adapt to emerging trends, particularly digitization and the green transition. Integrating these elements into training programs will be essential for maintaining a competitive edge in a rapidly evolving global marketplace. The collaboration between educational institutions, government programs, and industry stakeholders remains pivotal in overcoming current gaps and propelling Vietnam towards its ambitious logistics goals.