India’s Ken Research releases report noting key factors in development of Vietnam’s freight forwarding industry.
Increasing the number of channel points, strengthening infrastructure connections, improving service quality, and promoting railways for freight transportation will have a positive impact on Vietnam’s freight forwarding industry, which is expected to be worth $77 billion by 2022.
These key factors are contained in the “Vietnam Freight Forwarding Market Outlook to 2022 – By Normal and Express Delivery; By Sea, Road, Air and Rail Freight and By International and Domestic Freight Forwarding” report released by Indian market research company Ken Research on September 24.
Vietnam’s freight forwarding industry is expected to register a positive CAGR of 14.2 per cent during the forecast period of 2018-2022. The market is further expected to be driven by expanding industrial activities, a growing consumer preference for online shopping, upcoming infrastructure in the country, and continuous investment by the government in developing logistics infrastructure and consistent economic growth.
Logistics demand from import and export activities is expected to rise with several free trade agreements (FTAs), such as the EU-Vietnam FTA.
Road is by far the most popular medium for moving freight within Vietnam and will continue to grow owing to the integration of regional economies.
By joining the WTO, Vietnam officially opened its doors to foreign multinationals establishing manufacturing bases and assembly lines within Vietnam, supporting the country’s long-term vision of stimulating export-led growth.
Vietnam’s FTA with the EU has led to an increase in cross-border freight transportation via inland waterways. Major export products include electrical machinery and equipment, nuclear reactors, footwear, apparel and textiles, and furniture.
Ho Chi Minh City and surrounds is an ideal location for Vietnam’s exports and imports and is expected to be at the forefront in the ocean and air freight forwarding industry.
Roadways is gaining attraction in Vietnam with the registration of more than 1,050 enterprises in the road transport business, thus becoming the first preference for moving freight within the country with a vast presence of local freight forwarders coupled with trucking fleet operators.
The government’s emphasis on completing the North-South Expressway (2,500 km) by 2022 and upgrading connecting roads to Laos, Cambodia, China and other GMS and ASEAN countries will further help strengthen the country’s trade relations. The development of sea port infrastructure will also support increasing cargo volumes through Cai Mep Port in the coming years with improvements in port capacity and connectivity.