Japanese mid-sized logistics companies are expanding their distribution networks in Vietnam, a growing market where big players have still not solidified their positions, the Japanese daily Nikkei reported.
Among the firms, Japan Logistic Systems Corp. has invested an estimated 400 million JPY in building warehouses in Vietnam’s three major cities of Hanoi, Danang and HCM City. It plans to put the warehouses into operation from the beginning of next month with the aim of boosting its annual revenue in the market from the current 4 billion JPY to 7 billion JPY in the next three years.
Mitsubishi Logistics Corp. set up a joint venture with a local firm to transport products from appliance factories to the parts of Vietnam where they will be sold. The Japanese firm hopes to eventually handle imports and exports of electronic parts, coffee and other products.
Meanwhile, Nissin Corp. has joined hands with Vietnam’s national railroad to operate a freight train exclusively for Japanese companies in response to growing demand on the transport of cars and motorcycles.
The train makes two trips a week between Hanoi, where factories are concentrated, and HCM City, where the vehicles are sold. Appliances are shipped on the return trip going north. The products used to be transported on trucks, but deliveries were often delayed and products were sometimes damaged en route.
At the same time, Yusen Logistics Co. has begun considering regular truck deliveries between Hanoi and HCM City. Since the firm already operates Bangkok-Hanoi and Hong Kong-Hanoi routes, the new route would connect HCM City with Thailand and China by land.
According to the Nikkei, Japanese companies have been setting up factories in Vietnam, in part to take advantage of low labour costs and its proximity to the Chinese market. The Vietnamese government has indicated plans to create a special economic zone for Japanese businesses, another positive factor for midsize logistics firms.