EVFTA, Covid-19 change the face of VN logistics industry

Vietnam’s logistics market has great opportunities to improve as the EVFTA has been inked and the country is receiving investment inflow from Europe.

Aeon in recent years has become a channel through which Vietnam’s farm produce penetrates the Japanese market.

However, Shiotani Yuichiro, CEO of Aeon Vietnam, said Vietnam’s mangoes are not selling well in Japan because they are 20 percent more expensive than Thailand’s and the Philippines’, though the quality is high.

EVFTA, Covid-19 change the face of VN logistics industry



The higher logistics fee in Vietnam is one of the factors driving up costs for Vietnam’s mangoes.

This is also why the expenditure on logistics services by Vietnam’s textile and garment companies is 6 percent higher than in Thailand and 7 percent more than in China.

EU investors

High logistics costs not only weaken the competitiveness of Vietnam’s goods, but also hinder businesses to penetrate new markets.

With EVFTA, Vietnam’s logistics market now has the opportunity for renovation.

This will encourage EU investors to provide logistics and goods transportation services in Vietnam, including shipping firms, cargo/container handling, storage and warehousing services. 

A report showed that 15 percent of businesses said their revenue has decreased by 50 percent, while 50 percent of businesses saw the number of logistics services decreasing by 10-30 percent. Many companies have had to cut their workforce, and they still need a lot of money to maintain operations.

Nguyen Canh Cuong, Trade Counsellor to the UK, commented that this will serve as a great opportunity for Vietnam’s logistics firms to call for capital from multi-national corporations and modern big fleets.

 


According to VLA, the logistics industry in Vietnam has been witnessing a high growth rate of 14-16 percent in recent years, worth $40-42 billion a year. Around 3,000 domestic firms and 25 leading freight and forwarding groups in the world are operating in Vietnam.

The logistics market has value equal to 21-25 percent of GDP. However, 80 percent of the market share is in foreign hands. About 30 firms providing transnational logistics services are operational in Vietnam, including big names such as DHL, FedEx, Maersk Logistics, APL Logistics, CJ Logistics and KMTC Logistics.

M&A wave

With EVFTA, which serves as the leverage, analysts believe that M&A activities will be more bustling in the time to come.

Many big deals worth millions of dollars, were made in 2019. Symphony International Holdings (Singapore) bought into ITL Corp in a deal worth $42.6 million.

SSJ Consulting spent $40 million to acquire 10 percent of voting Gemadept shres. CRE, a Japanese large group, through its subsidiary CRE Asia, invested $6.2 million in Sembcorp Infra Services (SIS).

According to Vietnam Logistics Association (VLA), logistics firms are bearing big impact from Covid-19.

A report showed that 15 percent of businesses said their revenue has decreased by 50 percent, while 50 percent of businesses saw the number of logistics services decreasing by 10-30 percent. Many companies have had to cut their workforce, and they still need a lot of money to maintain operations.

Kim Chi 

Investing in automation to help VN logistics firms compete

Investing in automation to help VN logistics firms compete

As the pandemic brings opportunities to the e-commerce sector, the local logistics industry also has a chance to grow.

State needs to help cut logistics cost for Vietnamese farm produce

State needs to help cut logistics cost for Vietnamese farm produce

The State should develop solutions to reduce high logistics costs in trading agricultural products to improve the competitiveness of Vietnamese farm produce on the market, according to experts.

 
 

Other News

.
Border trade rules to be tightened
Border trade rules to be tightened
BUSINESSicon  01/08/2020 

Tran Quoc Toan, Deputy Director-General of the Import-Export Department, Ministry of Industry of Trade, talks on Vietnam’s decision to gradually eliminate all temporary import and re-export activities through Vietnam-China sub-border gates.

Block 114 – bright spot in offshore exploration
Block 114 – bright spot in offshore exploration
BUSINESSicon  31/07/2020 

Block 114 is located in Song Hong Basin, offshore Vietnam’s northern continental shelf, about 65km from Quang Tri province, and 86km from Da Nang city in the central region.

Startups in HR receive millions in funding despite Covid-19
Startups in HR receive millions in funding despite Covid-19
BUSINESSicon  01/08/2020 

Nearly all businesses are experiencing hardships because of Covid-19. However, this hasn't happened with startups in the HR industry. They are still receiving millions of dollars worth of funding.

Mobile World tries different development models, closes some chains
Mobile World tries different development models, closes some chains
BUSINESSicon  01/08/2020 

The Gioi Di Dong (Mobile World) has seen its key brands such as The Gioi Di Dong, Dien May Xanh and Bach Hoa Xanh growing rapidly, but has also had to shut down ineffective business chains.

Businesses endeavour to retain employees
Businesses endeavour to retain employees
BUSINESSicon  31/07/2020 

More than 7.8 million workers lost their jobs in the first half of 2020, putting severe pressure on labour authorities to tackle social security issues.

Vietnam to pilot night-time economic activities in 10 major cities
Vietnam to pilot night-time economic activities in 10 major cities
BUSINESSicon  31/07/2020 

The Government has approved a project on night-time economy development in Vietnam which will allow major cities and tourist attractions to pilot night-time services until 6 a.m.

Booming gold market risky for individual investors: experts
Booming gold market risky for individual investors: experts
BUSINESSicon  31/07/2020 

The recent surge of gold prices may cause risks for individual buyers, experts and analysts have warned.

Vietnam to post world’s fifth-highest economic growth: WB
Vietnam to post world’s fifth-highest economic growth: WB
BUSINESSicon  31/07/2020 

Vietnam is projected to be the fifth highest-growing economy in the world this year and the country has a unique opportunity to increase its footprint in the global economy in both trade and investment, 

Pharma firms uphold fair price mechanisms
Pharma firms uphold fair price mechanisms
BUSINESSicon  31/07/2020 

Amid Vietnam’s upcoming new rules on drug tenders, multinational pharma giants are advocating price negotiation for an open business environment and predictable policies, in order to make sustainable future investments.

Vietnamese goods face tough road to foreign markets due to trade remedies
Vietnamese goods face tough road to foreign markets due to trade remedies
BUSINESSicon  31/07/2020 

With an array of free trade agreements (FTAs) inked and coming into force, countries around the world have also increased technical barriers to protect their domestic industries,

M&A activity expected to set new records in post-COVID period
M&A activity expected to set new records in post-COVID period
BUSINESSicon  31/07/2020 

Analysts believe that new records in the number and value of M&A deals will be set in the post-Covid-19 period.

Vietnam gains $6.5 billion trade surplus in 7 months
Vietnam gains $6.5 billion trade surplus in 7 months
BUSINESSicon  31/07/2020 

Vietnam achieved a trade surplus of $6.5 billion in the first seven months of this year, including $1 billion in July, according to the General Statistics Office (GSO).

VIETNAM'S BUSINESS NEWS HEADLINES JULY 31
VIETNAM'S BUSINESS NEWS HEADLINES JULY 31
BUSINESSicon  31/07/2020 

Improving efficiencies of using energy in high-rise buildings

Vietnam preparing international labour resources
Vietnam preparing international labour resources
BUSINESSicon  30/07/2020 

Vietnam’s labour sector is strongly integrating globally. 

VIETNAM'S BUSINESS NEWS HEADLINES JULY 30
VIETNAM'S BUSINESS NEWS HEADLINES JULY 30
BUSINESSicon  30/07/2020 

Taking full advantage of opportunities from CPTPP

Japanese praise Vietnam's investment environment
Japanese praise Vietnam's investment environment
BUSINESSicon  31/07/2020 

Japanese businesses in Vietnam say the country is a safe and successful destination for investors.

Foreign investors pledge some US$19 billion into Vietnam
Foreign investors pledge some US$19 billion into Vietnam
BUSINESSicon  30/07/2020 

Despite the impact of the Covid-19 pandemic, new foreign investment approvals in Vietnam reached some US$18.8 billion between January and July, inching down by a mild 6.9% year-on-year.

Is cash flow heading for VN real estate market?
Is cash flow heading for VN real estate market?
BUSINESSicon  31/07/2020 

As bank deposit interest rates are on the decrease and gold is becoming more and more expensive, idle money is expected to flow into the real estate market.

Firms to re-enter COVID-19 prevention mode
Firms to re-enter COVID-19 prevention mode
BUSINESSicon  30/07/2020 

As soon as the first cases of SARS-CoV-2 were confirmed in Da Nang and Quang Ngai, many firms have re-implemented pandemic prevention measures starting early this week.

Southern authorities mull solutions on port development
Southern authorities mull solutions on port development
BUSINESSicon  30/07/2020 

Poor infrastructure conditions and weak connections between ports and manufacturing facilities are the biggest hurdles to seaport development.

 
 
 
Leave your comment on an article

OR QUICK LOGIN