Part 3: Opportunities and Challenges for Vietnam’s Logistics Industry in the Digital Transformation Era

1. Enhanced Competitiveness

According to the Vietnam Logistics Report 2024, logistics costs in Vietnam remain high, accounting for 16–20% of GDP. Implementing digital solutions, such as automated supply chain management, big data, and artificial intelligence (AI), could significantly reduce these costs.

2. Development of Modern Free Trade Zones

In the context of expanding FTZs in Vietnam, digital transformation is key to building smart FTZs. E-customs systems, automated warehouses, and digital platforms connecting businesses in the supply chain enhance operational efficiency and provide a competitive edge for Vietnam’s FTZs.

3. Promotion of International Collaboration

Digital transformation facilitates cross-border connectivity, enabling Vietnamese logistics companies to participate more deeply in global supply chains. Adopting international standards in digitalized supply chain management enhances credibility and fosters collaboration with foreign partners.

1. Limited Workforce and Awareness

A significant challenge for Vietnam’s logistics industry is the lack of a digitally skilled workforce. Many small and medium-sized enterprises (SMEs) do not fully understand the benefits of digital transformation, leading to delays in adopting new technologies.

Additionally, training personnel to use complex digital systems such as blockchain, AI, or supply chain management software is still limited, hampering the implementation of technological solutions in logistics.

2. High Initial Investment Costs

The initial costs of digital transformation in logistics, especially in FTZs, are often substantial. SMEs struggle to access advanced technologies or participate in digital transformation programs due to financial constraints.

Moreover, Vietnam’s technological infrastructure, including internet networks, national databases, and integrated systems, remains inconsistent, reducing the effectiveness of digital solutions.

3. Cybersecurity Risks

Increasing reliance on digital platforms brings higher risks of cyberattacks. Data breaches, system failures, or cyber threats can disrupt supply chains, significantly impacting the reputation and operations of logistics companies.

1. Developing Technological Infrastructure and Legal Frameworks

The government must invest in IT infrastructure, including big data systems and integrated digital platforms, to support logistics businesses. Simultaneously, completing the legal framework for digital transformation and data security will facilitate the adoption of new technologies.

2. Workforce Training and Awareness Building

To address the workforce gap, specialized training programs on digital transformation in logistics should be organized. Short-term courses and thematic workshops can help businesses understand the benefits and applications of digital transformation in their operations.

3. Strengthening Public-Private Partnerships (PPP)

Public-private partnerships are key to advancing digital transformation in logistics. The government can provide financial incentives or support SMEs in accessing new technologies. Collaborating with international organizations like the World Bank (WB) or the Asian Development Bank (ADB) can bring resources and expertise to Vietnam’s transition.

4. Enhancing Security and Risk Management

Businesses need to invest in advanced security solutions and develop strategies to manage digital transformation risks. Applying blockchain technology in supply chain management not only increases transparency but also reduces fraud and cybersecurity risks.

By investing in technology, training personnel, and improving legal frameworks, Vietnam’s logistics sector can create a new turning point, transforming digital transformation into a driving force for sustainable and comprehensive growth. Free trade zones, as central connectivity hubs, will serve as exemplary models for the success of digital transformation in Vietnam’s logistics industry.