HO CHI MINH CITY: Ho Chi Minh City is set to enhance its logistics sector to become a key logistics hub in South-East Asia by 2030, leveraging global supply chain opportunities.

Speaking at the Ho Chi Minh City Logistics conference organised by the Ho Chi Minh City Logistics Association last Friday, Vo Van Hoan, deputy chairman of the People’s Committee, said the city aims to position itself as a key logistics service centre in global supply chains.

The city targets to develop logistics into a pioneering and sustainable economic sector, with a goal to become a logistics service hub not only for Asia but also on a global scale by 2045.

Logistics is one of Vietnam’s rapidly expanding sectors, boasting an annual growth rate of 16%, he said.

The city recently unveiled a plan to enhance its logistics infrastructure by improving port capacity and expanding warehousing.

Investment projects will be executed transparently and equitably, with support for private sector involvement through favourable tax policies and streamlined processes.

A priority is the transition to green logistics to reduce emissions and promote sustainability, which is vital for competitiveness and growth.

Projects incorporating Industry 4.0 technologies, digital transformations and environmental protection will be prioritised.

The goal is to develop modern logistics infrastructure and improve connectivity in the southeastern region and the Southern Key Economic Zone.

The global logistics sector is currently grappling with challenges such as economic uncertainty, geopolitical tensions, supply chain disruptions and natural disasters, which have adversely affected Vietnam’s logistics industry.

Pham Thanh Son, director of Tan Cang Hiep Phuoc Joint Stock Co, said that Vietnam’s logistics industry must leverage more than its current advantages to thrive.

Vietnam ranked 43rd in the Logistics Performance Index in 2023.

The country’s logistics infrastructure investment has reached 5.7% of gross domestic product (GDP), the highest in South-East Asia, contributing 4%-5% to national GDP and employing over one million people.

With around 9,600 registered logistics enterprises, accounting for 36.7% of the national total, opportunities exist in areas like Hiep Phuoc and Nha Be ports.

The upcoming Ring Road 3 is expected to enhance transport and reduce logistics costs. However, the country’s public investment in infrastructure has only reached 22% of planned disbursement, leaving unresolved traffic bottlenecks that hinder logistics development.

Son recommended improving infrastructure through accelerated road projects, railway connections and developing waterway ports.

Vietnamese logistics firms, mostly small to medium-sized, need to optimise operations, embrace digital transformation and invest in new technologies to enhance competitiveness.

The sector faces challenges from fragmented policies and limited infrastructure, yet the market, valued at around US$40bil in 2023, is projected to grow by 14%-15% by 2025, driven by free trade agreements and a favourable investment climate.

The global logistics market is expected to reach US$21.91 trillion by 2033, growing at 9.35% annually.

- ANN