Necessary to create a foundation for a modern logistics sector in Vietnam

By Nguyen Tuong|13/01/2023 09:42

The Ministry of Industry- Trade needs to review, evaluate and develop a new national-level action plan with improvements in organization and deploying resources. Macro solutions as master planning of the sector development in the direction of digital transformation for long-term development should be paid attention to.

Bright spots in the state's logistics management

Vietnam’s logistics service industry has been formed and developed since the 70s of the 20th century on the basis of the development of freight forwarding services. The sector had quite late development compared to the world’s logistics services, but it has had quick and firm development, becoming an important service sector in the country’s socio-economic development thanks to attentions from the Government, supports from public and especially efforts from enterprises in the sector, especially in recent years. According to statistics from the Ministry of Planning and Investment, in 2022, the number of enterprises operating in the field of logistics services in general was about 45,000 enterprises, of which about 4,500 enterprises provide both international and domestic logistics services. According to the World Bank’s 2018 Report on the Logistics Performance Index (LPI), Vietnam ranked 39 out of 160 countries, third among ASEAN countries (after Singapore and Thailand), and first among newly- emerging economies in terms of logistics services. And it has been appointed by the International Federation of Freight Forwarders (FIATA) to organize the Federation’s Annual General Meeting in 2025 (FIATA World Congress 2025) in Hanoi. The Vietnam Logistics Business Association (VLA) - which will celebrate its 30th anniversary in 2023 - is truly representative of Vietnam’s international and domestic logistics service sector.


Logistics service businesses have encountered many difficulties from the State’s management of logistics services. It is because logistics services are very broad, related to the State management tasks of many ministries and sectors. The Ministry of Planning and Investment manages the service sector in general, including logistics services. 

The Ministry of Transport manages transportation services, including license issuing of multimodal transport - a core service of logistics. The Ministry of Industry and Trade manages it according to “Section 4: Logistics services” in the 2005 Commercial Law and sub-law documents such as Decree no.163/2017/ND-CP Regulations on logistics service business, effective from dated 20/2/2018, replacing Decree no.40/2007/ND- CP dated September 5, 2007 “detailing the Commercial Law on conditions for logistics service business and limitation of liability for traders logistics service business”. Decisions from Prime Minister, such as Decision no.200/ QD-TTG dated February 14, 2017 approving the Action Plan to improve competitiveness and develop logistics services in Vietnam to 2025 and Decision 221/QD dated 22/2/2021: Amending and supplementing Decision no.200/ QD-TTG dated 14/2/2017 approving the Action Plan to improve competition abilities and develop logistics services Vietnam to 2025. Departments of Planning- Investment are responsible for given licenses to establishment of logistics service enterprises. Since 2019, the National Steering Committee for ASEAN Single Window, National Single Window and Trade Facilitation (Committee 1899) has been assigned the additional task of “helping the Government andPrimeMinistertodirect,administerand coordinate activities of related ministries, agencies and organizations in completing policies; deploying solutions to develop, improve quality, efficiency and responsiveness of logistics services according to requirements from economic development and improve the competition abilities of trade and the economy.

Prominent highlights in the State management of logistics services was the fact that along with efforts from enterprises, the Ministry of Industry- Trade (Import- export Department) has always accompanied, supported and guided. logistics service providers in implementing logistics development policies, developing Action Plans to improve competition abilities and develop logistics services in Vietnam by 2025, organizing annual logistics forum, removing difficulties and obstacles in operation of the logistics service sector; connecting production, import - export of goods with logistics service activities; promoting the training of human resources for high quality logistics services. Thereby, it has actively contributed to rapid development of Vietnam’s logistics service sector.


Vietnam's logistics will have new steps of development
The good news for Vietnam’s logistics service industry in the last days of the year is from December 1, 2022, the Ministry of Industry- Trade was assigned by the Government to be the State management agency for logistics industry activities. Decree no.96/2022/ND- CP dated November 29, 2022, defining the functions, duties, powers and organizational structure of the Ministry of Industry- Trade. Accordingly, in addition to many other important functions, the Ministry performs the function of state management of “domestic trade; import- export, border trade; Services of Logistics; developing foreign markets; market management; promotion; e-commerce; commercial services; international economic integration”. These state management functions are related to logistics service activities in the context that our country has had deep integration into the world economy with new-generation free trade agreements and global supply chains. And it is facing formidable challenges.

According to the provisions of Points a and b, Clause 16, Article 2 of this Decree, the Ministry of Industry-Trade is assigned the task of “presiding over and coordinating with ministries, sectors and localities in formulating and organizing implementation of policies and laws on logistics services; coordinating and supporting ministries, sectors, localities and associations to develop logistics services.

This is the result and urgent requirement of practical activities for the logistics service sector in recent time. There should be a State’s unified management agency from the Ministry of Industry- Trade, enterprises and related sector associations. With Decree no.96, enterprises believe there will be new steps of logistics development under the direction from the Ministry of Industry- Trade.


Some recommendations to the ministry of industry-trade

  • »  (1) The Resolution of the 13th National Party Congress has set out three strategic breakthroughs, including “Improving institutional synchronization”. Therefore, it is proposed to consider and research for sooner amendment and supplement to the 2005 Commercial Law to have new regulations suitable to the current situation of logistics activities. It is necessary to re-stipulate the content and definition of logistics services: definition of logistics services, regulations on State’s management over logistics, Law provisions, and related contents as e-trade, e-logistics, green logistics, and logistics service centers should be stipulated to suit practical situation and facilitated in the situation of innovation and digital transformation, to make it able to catch the international trend of logistics service development and to participate freight forwarding, transport and logistics platforms worldwide.
  • »  (2) National Action Program on Logistics: The Ministry of Industry- Trade has paid much attention to supporting development of the logistics sector. There should be consideration and evaluation on developing the national action plan in the new phase with improvements on organizations and deploying resources. Macro solutions as master planning of the sector development (integrated planning) in the direction of digital transformation for long-term development should be paid attention to.
  • »  (3) Implementing development of the Strategy for Developing Logistics Services 2025 - 2030 on the basis of the implementation of the Action Plan to improve competition abilities and develop Vietnam’s logistics services by 2025. The building of the strategy is very important and urgent because so far Vietnam has not had a strategy to develop its logistics service sector.
  • »  (4) Developing commercial infrastructure for domestic logistics service activities, including markets, supermarkets, trade centers, shopping centers, goods auction centers, logistics centers , goods warehouses, fairs and exhibitions centers, in which, especially logistics centers because now enterprises have many development requirements but they are confused with the State management regulations on developing regional and national logistics centers.
  • »  (5) Performing the function of sector management on “Coordinating, supporting ministries, branches, localities and associations to develop logistics services”. First of all, it is necessaryto support development of enterprises providing logistics services, especially the policy of linking Vietnam’s import- export goods market with development of the logistics market and the establishment of local logistics business associations with regional connectivity, such as in the Mekong Delta. VLA will closely coordinate with the Ministry of Industry- Trade carrying out the task.
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Necessary to create a foundation for a modern logistics sector in Vietnam