Market Trends of vietnam freight and logistics Industry
Vietnam's transport and storage sector experienced 17.08% YoY growth in 2022, due to increase in trade volume
- In 2021, the revenue of the transport and storage sector in Vietnam declined by more than USD 2 million, reaching around USD 34.37 billion. However, the revenue is expected to rebound in the future due to Vietnam growing into a manufacturing and export powerhouse, attracting FDI will increase the trade volume and rise in transportation services. Moreover, the Vietnamese government is focusing on road development, increasing the total length of expressways from the current 1,290 km to 5,000 km by 2030.
- In 2022, the transportation and storage sector in Vietnam saw impressive growth of 17.08% YoY. This expansion was driven by the establishment of approximately seven thousand new businesses in the sector, marking a substantial increase compared to the previous year. In the same year, Vietnam witnessed a total of 148.5 thousand new enterprises being established across various industries. Goods in Vietnam are primarily moved by road, with nearly 72% of cargo volume in the third quarter of 2022 being transported via this mode.
- During 2020-2022, the cold chain sector in Vietnam witnessed significant expansion. This growth is evident in the considerable increase of 25.2% in the capacity of cold storage facilities and the expanding fleet size of hard transportation providers. The driving force behind this expansion is the rising need for cold storage facilities and transportation services, primarily due to the growing demand for seafood exports, imports of raw food, and the distribution of goods within the domestic market. These factors include the distribution to modern trade retail outlets and food service establishments.
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Nghi Son, Vietnam's largest oil refinery, cut production by 20% since January 2022, leading to a spike in fuel prices
- In December 2023, Vietnam reduced retail prices of gasoline and other oil products for the fourth consecutive time. The price of E5 RON 92 per liter was decreased by VND 509 (USD 0.021) to VND 21,290 (USD 0.9), and RON95-III petrol price was lowered to VND 22,322 (USD 0.944) per liter. The ministries of finance, industry, and trade responsible for these adjustments opted not to utilize the petrol and oil price stabilization fund. Since the start of the year, Vietnam has adjusted petrol prices 35 times.
- In October 2021, Vietnam experienced a notable rise in the demand for petroleum products, resulting in an upward adjustment of fuel prices in alignment with global market trends and price increases. The price of Brent crude oil followed a similar trajectory, reaching USD 95.39 per barrel, reflecting a 1.98% increase or an equivalent of USD 1.85. Consequently, the upsurge in fuel prices throughout 2022 directly impacted transportation expenses, ultimately leading to higher retail prices.
- In 2022, the retail price of RON 95 gasoline in Vietnam reached its highest point in eight years, reaching VND 26,287 (USD 1.14) per liter. The increase in fuel prices in Vietnam was exacerbated by domestic gasoline shortages caused by the Nghi Son Oil Refinery, the country's largest refinery, reducing production by 20% from January 2022 due to financial challenges. Although the refinery has obtained temporary investment, it might be forced to cease operations if it fails to secure sufficient liquidity or loans to procure Kuwaiti crude oil. The elevated fuel prices have also sparked concerns about inflationary pressures and their adverse effects on Vietnam's GDP, impacting the consumer price index and overall inflation.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Vietnam leads ASEAN in consumer spending and online growth, predicts USD 57 billion digital economy by 2025
- Construction and manufacturing sectors capturing major GDP growth supported by rising FDI inflows
- E-commerce is expected to register a CAGR of 12.38% during 2023-27, supported by the national e-commerce development plan
- Vietnam anticipates manufacturing and processing sectors to drive 90% of exports by 2030
- The country relies on fuel imports for 70% of its domestic demand, making it the highest share in trucking operational costs
- Vietnam's Logistic Performance Index surges to 3.3 points in 2023, driven by logistics sector and export growth
- Road transport and sea and inland waterways development initiatives are majorly driving growth
- Vietnam is working toward the expansion of international shipping routes to enhance connectivity and develop country ports as transshipment ports
- Logistics costs accounted for about 20-25% of the total costs incurred by Vietnamese agricultural exporters
- Vietnam accelerates infrastructural development with USD 21 billion investment by 2025, focusing on transport and urban projects
- The textiles and garments manufacturing sector to advance in Vietnam in lines with its textile strategy
- CPI and PPI increased due to global supply disruptions amid increasing demand
- The GVA of the manufacturing sector expanded by over 12% YoY in 2022, led by the textiles and apparel sub-segment
- Vietnam is prioritizing imports of machinery and equipment to advance its economy
- The growth in the country's mining, manufacturing, and shipping sectors, supported by government regulations, is driving truck demand
- Truck sales in Vietnam grew by 11% in 2022 owing to increasing construction activities and technological advancements
- Vietnam to invest USD 1.5 billion from 2022-2027 to increase container shipping capacity
- Vietnam has investment plans of USD 8 billion to enhance port efficiency and cargo clearance systems by 2030
- Vietnam's transport industry performance witnessed significantly positive growth owing to economic recovery
