Vietnam’s logistics market dominated by foreign firms

Nearly 30,000 logistics businesses are operating in Vietnam, of which domestic businesses accounted for 89% but hold merely a 20% market share, meanwhile foreign-owned and joint venture peers accounted for 11% but take the upper hand with a 80% market share, according to statistics from the Vietnam Logistics Business Association (VLA).

In addition, while making up the majority of logistics businesses, most of domestic logistics firms provide services in small supply chains in the country in some segments including transporting, warehousing and customs service, doanhnhansaigon.vn reported.

One third of the 30,000 logistic businesses have less than 50 staff, while 20 percent employ between 50 and 100 people and only 10.8 percent have more than 1,000 workers.

Multinational companies and corporations, even though representing a minority, operate major international shipping and logistics services.

One of the causes of the situation is the shortage of manpower. In fact, Vietnam lacks two million logistics workers, according to the Vietnam Logistics Research and Development Institute.

Insufficient number and weak qualifications are the two major headaches of the Vietnamese logistics industry at the moment.

The people working in the industry are mostly untrained and lack of professional skills to catch up with the advanced technologies, given the rapid growth of automation and that e-commerce have had influence on the development of the logistics industry.

Most of  logistics employees have received on-the-spot training, other 20% of employees joined in domestic training programs and less than 10% have been trained by foreign experts or received capacity building in developed countries.

As logistics is considered a main contributor to the development of the economy, handling the shortfall of two millions employees will be an arduous task for the industry.

Vocational schools are failing to meet the demands of businesses and graduates are often unable to perform their jobs, forcing the businesses to re-train them.

A VLA leader said that only 10% of the available human resources meet demand of the logistics industry and they are asking the government to adopt more proper policies to help businesses train their employees.