VIETNAM MARKET BRIEFING

Free Trade Zones – Breakthrough Solution to Boost the Growth of Vietnam’s Logistics Sector

Posted on by Plus One

On December 2, 2024, the Ministry of Industry and Trade and Bà Rịa – Vũng Tàu People’s Committee hosted the Vietnam Logistics Forum. The event, attended by Prime Minister Pham Minh Chinh, emphasized free trade zones as key to logistics growth, addressing challenges like high costs and infrastructure gaps through trade agreements and modernization.

Vietnam’s logistics sector has made significant progress, growing at an average rate of 14-16% annually, more than double the global logistics growth rate. The market size is about $40-42 billion, representing 10% of GDP and 5% of trade turnover. In 2024, Vietnam was ranked among the top 10 global emerging logistics markets, 4th in the region for Logistics Opportunity Index and 43rd globally for Logistics Performance Index.

Three key goals for Vietnam’s logistics industry

    1. Reduce logistics costs from 18% to 15% of GDP by 2025.
    2. Increase the logistics sector’s share of GDP from 10% to 15%, aiming for 20%, and expand its global market share from 0.4% to 0.6%.
    3. Boost sector growth to 20% annually, up from the current 14-16%.

The Strategic Role of Free Trade Zones (FTZ): 

    1. Increase international competitiveness:
      FTZ helps optimize logistics costs, increase transportation speed, and position Vietnam as a key transhipment hub in the global supply chain
    2. Develop logistics infrastructure:
      Attract investment to build seaports, warehouses, and modern transportation technology, improving logistics performance and capacity.
    3. Promote e-commerce:
      With tax incentives and flexible customs procedures, FTZ supports import-export businesses, particularly rapidly growing e-commerce companies 
    4. Upgrade logistics services:
      Create opportunities for domestic logistics businesses to develop value-added services such as transportation, warehousing, and supply chain management.

The Free Trade Zone is a breakthrough solution to promote the growth of the logistics industry, create a foundation for sustainable economic development, and enhance Vietnam’s position on the global logistics map.

🌐 Sources:

  1. vlr.vn – Free Trade Zones: A Key to Enhancing Vietnam’s Logistics
  2. moit.gov.vn – Giải pháp đột phá thúc đẩy tăng trưởng logistics
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