Foreign firms hold 70 pct market share in Vietnam logistics: World Bank

22-Mar-2011 Intellasia | World Bank | 8:08 PM Print This Post

Total revenues from logistics services (including warehousing, logistics, transportation and distribution) estimated at about 15-20 percent of Vietnam’s gross domestic product (GDP) is a huge number (about $12 billion per year), according to the World Bank.

However, up to 70 percent of total revenues currently fall into the pockets of foreign logistics enterprises.

The main reason given is that Vietnam’s infrastructure is not compatible for Vietnamese logistics companies to be able to digest this “pie” of the cake.

Evaluation of World Bank (WB) showed that in 2010, Vietnam ranked low-to-medium income countries in the world. Although Vietnam is in the early stages of its development, compared to other countries and territories in Asia, the Vietnamese economy has posted strong growth and is the market where producers and retailers – are important factors for success of the logistics industry. Vietnam’s current logistics sector ranks the 53rd of 155 countries.

Revenues from logistics services in Vietnam market accounts for about 15-20 percent of its GDP (about $12 billion). This is actually a huge source of revenue. On the other hand, only the transportation in the supply chain (accounting for 40-60 percent of the total cost) is also a major source of earnings.

But, the pie of large and attractive cake now belongs to foreign enterprises such as APL, Mitsui OSK, Maerk Logistics, NYK Logistics and others. Obviously, these are international giants with strong competitiveness by experience, strong financial resources and the worldwide professional and comprehensive service system established for many years, especially with the exploitation of modern technologies, and high-level management. Therefore, those firms have conquered about 70 percent of market share in the Vietnamese logistics industry.

 


Category: Economy

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