Top notch logistics services

Cutting the ribbon on Yusen Tan Dong Hiep B Logistics Center

Yusen Tan Dong Hiep B Logistics Center covers an area of 21,000 square metres of land with 10,000sq.m warehouse area, fully equipped with high selective racking system, 13 container docks, 5,000kg per sq.m floor load capacity, LED-lighting system, high security standards, and a high-end warehouse management system. Strategically located inside Tan Dong Hiep B Industrial Zone, Di An city, this new facility has great accessibility to Ho Chi Minh City centre, Tan Son Nhat International Airport, Cat Lai main port in Ho Chi Minh City, and the future Long Thanh International Airport in Dong Nai.

This new facility is designed to provide storage and fulfilment solutions with value-added services such as co-packing, labelling, and consolidation services for distribution across Vietnam. It will act as Yusen Logistics (Vietnam)’s main logistics hub for the south region of Vietnam, leveraging the company’s warehouse management system capabilities in the fast-growing market to satisfy customers’ needs.

The new facility is ideally located to facilitate transport and logistics all across southern Vietnam

The new Yusen warehouse will support growing investment and logistics demand in Vietnam

In his speech at the opening ceremony, general director of Yusen Logistics (Vietnam) Co., Ltd. Hidemichi Nakao said, “This new facility allows us to continue to expand our capabilities in support of our customers’ growth in Vietnam and also globally, complementing our air, ocean, and land services. It provides customers with additional storage and various services to meet the rapidly expanding supply chain needs in the country. The new location means customers would be able to take advantage of new transport infrastructure coming to the region as economic growth gathers further momentum.”

Yusen Logistics is a leading global provider of international freight forwarding and contract logistics services. Offering a total logistics service; the company supplies freight forwarding, supply chain management, warehousing, and distribution services in one package – providing solutions which range from global supply chains to stand-alone operations. It has a network linking Japan, the Americas, Europe, East Asia, and South Asia-Oceania, and operates more than 590 distribution centres in 47 countries and regions.

Yusen Logistics (Vietnam) Co., Ltd., a member of Yusen Logistics Group, was established in 2006 in Vietnam, with six logistics centres in provinces and cities in Vietnam, including Bac Ninh, Hai Duong, Haiphong, Binh Duong, and Danang, 134,000sq.m of warehouses and 17 offices nationwide, with approximately 2,000 employees locally.

Last year, when global trade was severely impacted by COVID-19, logistics activities in many countries came to a standstill, while logistics in service of e-commerce became quickly overloaded due to a surge in online orders, Khanh told a conference in Hanoi on April 20 discussing measures to develop the logistics market.

Without careful preparations, logistics providers as well as production and business enterprises will face major difficulties in adapting to the new circumstances, he believes.

He noted that the global logistics market was given a boost by the recovery in international trade flows in the second half of 2020. Moreover, post-pandemic trade facilitation and policies from governments to improve the economic climate were helpful in expanding the market.

According to a report from ResearchAndMarket.com, the size of the global logistics market was estimated at 3.31 trillion USD in 2021, up 17.6 percent compared to 2000 and showing that the sector still boasts substantial development potential.

According to the Vietnam Logistics Business Association (VLA), 95 percent of active logistics companies in Vietnam are Vietnamese, but mostly of small or medium scale and with poor links.

Many participants to the conference pointed out that their modest scale is one of the barriers facing domestic logistics firms in competing in the domestic market, not to mention the region and the world.

Meanwhile, Nguyen Quoc Phuong, Deputy General Director of the Airports Corporation of Vietnam (ACV), said that international transport accounts for 80 percent of total transport in Vietnam. The market share in international transport held by domestic airlines is currently just 12 percent, with the remainder belonging to 75 foreign airlines.

Insiders said the Ministry of Industry and Trade should complete policies and legal regulations on logistics services.

At the same time, it is necessary to complete logistics infrastructure by continuing to review planning and investing in supporting businesses to build large warehouses in different localities.

Authorized agencies should also upgrade and connect transport infrastructure, cut fees, and allow the optimization of resources through the re-distribution, sharing, and re-using of redundant capacity for the promotion of the logistics sector, they added.

Source: VNA

HCM City has just approved and issued a project to develop the logistics industry in the city until 2025, with a vision to 2030 to develop logistics to become a key service industry of the city,

Vietnam would restructure the services sector based on modern technologies under the Industry 4.0, especially in fields of finance-banking, insurance, healthcare, education, transportation, trade and tourism.

With an estimated growth rate of 7-8% in the next ten years, Vietnam’s services sector is expected to make up 60% of the country’s GDP by 2030.

Activities at Dinh Vu port. Photo: Viet Linh

The figures were revealed in Vietnam’s strategy for the development of services sector in 2021-2030, with vision to 2050.

To realize the target, the plan expects the government to push for a more drastic institutional reform and promote greater transparency, efficiency and competitiveness of services sector during the Industry 4.0, which is essential as the country is expanding integration into the global economy.

In addition, Vietnam would restructure the sector based on modern technologies under the Industry 4.0, especially in fields of finance-banking, insurance, healthcare, education, transportation, trade and tourism.

A tailor-made solution would be used for certain service products and sectors with high knowledge, technological content and competitive advantages, including logistics, tourism, IT, finance-banking, education and healthcare.

For the coming time, Vietnam plans to form tourism-, finance-, logistics- and trade centers in major cities of Hanoi, Haiphong, Danang, Ho Chi Minh City, and Cantho with high quality products capable of competing at regional and international levels.

Meanwhile, the country would mobilize investment funds from domestic and foreign sources to upgrade and build new infrastructure to create favorable conditions for the development of services sector.

“Public funding is set to allocate for major infrastructure system with high spillover effects, such as airports, seaports, telecommunication, finance-banking and tourism,” it stated.

In the first quarter of this year, the service sector witnessed positive growth of 3.34% as the Covid-19 pandemic is gradually contained, contributing 35.7% to the overall economic growth of 4.48%.

Specifically, in a document to voice its opinion about the draft plan on the railway network in the period, the Commission has proposed the railway sector to carefully assess the railway infrastructure especially terminals, warehouses, and approach roads.

John Campbell, manager of Industrial Services at Savills Vietnam

Vietnam ranked among world’s top 10 emerging logistics markets

2021 has witnessed a bright start for Vietnam’s logistics sector, which ranked among the world’s top 10 emerging logistics markets in the 2021 Emerging Markets Logistics Index with a score of 5.67 out of 10. It jumped three spots to eighth in this year’s global index of emerging logistics markets after emerging as a popular manufacturing hub, particularly with the recent mass relocation of production out China. The report emphasised Vietnam’s improved performance across domestic logistics opportunities, international logistics opportunities and business fundamentals.

Logistics industry forecast to grow in 2021 on global recovery

According to the Vietnam Logistics Business Association’s latest survey, there are around 30,000 logistics companies in the country, 4,000 of them foreign-owned. Furthermore, the industry has been growing at 12-14 per cent annually and is now worth over $40 billion.

According to SSI Securities, the growth prospect of the seaport and logistics industry is positive in 2021, forecasted to grow significantly on the possibility of global trade recovery this year when the COVID-19 vaccine is administered worldwide. The securities company expects the revenue of the seaport and logistics industry would expand by 10 per cent in 2021. The expansion of Cai Mep-Thị Vai and Lach Huyen seaports, for example, would attract big ships to Vietnam instead of Singapore and Hong Kong.

This year will also witness Gemalink Port – Vietnam’s largest deep seaport – put into use at least 80 per cent of its designed capacity and reach its full capacity of 1.5 million TEU by 2022. Beginning construction in February 2019, Gemalink is the biggest seaport in the Cai Mep-Thi Vai complex with a total investment of $520 million and becoming one of the world’s 19 largest deep seaports with the capability to receive the world’s largest ships (up to 200,000 DWT) today.

Despite being affected by the pandemic last year, the industry was confident about the country’s trade growth thanks to positive impacts of free trade agreements (FTAs) which were signed recently, including the EU-Vietnam FTA (EVFTA) and the Regional Comprehensive Economic Partnership (RCEP). In addition, expectations on investment inflow triggered by the global production shift out of China is another driver instilling confidence in the sector’s recovery.

Statistics from the General Statistics Office showed that Vietnam’s total import-export value reached $543.9 billion in 2020, up 5.1 per cent on-year. It is also predicted by SSI that Vietnam’s import-export value and total goods via seaports would increase by approximately 10 per cent in 2021, pushed by global recovery, FTAs, and the global production shift out of China.

Warehousing demand continues to rise

This expectation was also driving demand for logistics infrastructure. For example, total warehouse area increased significantly in recent years and the price escalated over 5-10 per cent on-year. According to Savills Vietnam figures, the average warehouse rental price in the North and South Economic Zones in 2020 was $4.1 per square metre per month and $4.4 per sq.m per month, respectively.

New warehousing and distribution centre projects are sprawling to Long An and Dong Nai as Ho Chi Minh City and Binh Duong province have restricted supply. In Long An for example, JD.com invested in a new 10-hectare warehouse project in Duc Hoa district and Cianiao Network (Alibaba logistics provider) has a new 15ha project in Ben Luc district. Last year also witnessed the announcement of LOGOS Property entering the market with a $350 million logistics development joint venture. The Australian developer has also invested in its own warehousing project in Can Giouc district, Long An.

Global warehousing costs, Savills Research

According to Savills Global Warehousing Costs report by Paul Tostevin, director of Savills Research, when it comes to analysing total warehousing property costs, aside from rental rates, it is also important to factor in labour costs which are typically the single largest component of a warehousing operation (often making up half of all operational costs). Electricity and diesel costs, for the running of buildings and their vehicle fleets, are also a major factor in warehousing operations. The report stated that very low labour costs coupled with extremely low energy costs make operations in Vietnam the cheapest location of the reports sample (54 markets across 21 countries), led by Hanoi. These low costs make Vietnam highly attractive to multinationals setting up operations in the country, but the government is actively targeting higher value companies. Troy Griffiths, deputy managing director of Savills Vietnam, said, “The government has been investing heavily in all manner of infrastructure while promoting industrial clusters to attract businesses higher up the value chain. High levels of corporate taxation relief are also available to ensure healthy regional competition.”

Suez blockage threatens Vietnam trade

The Suez Canal blockage caused by the Taiwanese container vessel Ever Given is threatening to delay some of Vietnam’s exports and imports with Europe and the US, leaving exporters concerned. As the situation continues, Vietnamese seafood exporters will suffer as they have to ship seafood to their partners, according to Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP).

The Ministry of Industry and Trade has advised exporters to adopt the necessary measures to limit any economic damage posed by the situation. For example, the Vietnamese Trade Office in Egypt recommended Vietnamese firms to coordinate closely with shipping companies for updates on the transport capacity, time of docking, and goods loading.

It was also advised to take out insurance against delays or possible damage of goods, especially aquatic products. Businesses would also need to contact the Vietnam Trade Office and work with importers to address possible problems related to slow delivery to avoid any trade disputes.