Though many Vietnamese logistics firms have become integrated 3PL (third-party logistics) service providers, they can only join the market at a primary level.
Transimex Sai Gon on August 12 officially started construction of a bonded warehouse and logistics center, half a year after it received an investment license.
The company’s director Bui Tuan Ngoc said the project would provide better material facilities for the company to focus on providing 3PL integrated supply chain & logistics services.
3PL integrated services are not the target of Transimex Sai Gon only, but also many logistics firms as well because they believe the market is really lucrative.
About 40-50 percent of businesses in developed countries use the services. Meanwhile, in Vietnam, large corporations such as Masan and VinaPhone have pioneered the trend.
Reports all showed that the logistics firms which have the highest revenue in the world are the ones providing end-to-end integrated logistics solutions, such as DHL, Kuehne + Nagel and DB Schenker.
According to Armstrong & Associates, the Vietnamese 3PL general logistics service market in 2014 was valued at $1.2 billion, a modest figure compared with the world market.
The market is being controlled by big foreign companies like DHL Logistics, Damco, FedEx and APL. However, many Vietnamese names have emerged in the market recently, including Gemadept, Vinafco and Transimex.
In 2014, Gemadept reported revenue growth rate of 28 percent and pretax profit up by 175 percent from 3PL general services compared with 2013.
The corporation has eight logistics centers throughout the country, now serving over 40 large clients, both foreign (Samsung) and domestic (Vinamilk, Masan and Kinh Do).
Transimex Sai Gon, after upgrading the ICD (inland container depot) in 2011 and setting up more distribution centers in 2013, had satisfactory revenue of VND480.8 billion in 2014 and post-tax profit of VND138 billion. The figures represent a 2.7 times increase in revenue and 3.7 times increase in profit compared with five years ago.
Vinafco has become a well-known name after it won big international contracts with Akzo Nobel and Kimberly-Clark.
The company is expanding its operation scale in the strategic economic regions of Hanoi, Hai Phong, Da Nang, Binh Duong and Hau Giang.
However, though able to provide 3PL integrated services, Bui Tuan Ngoc from Transimex Sai Gon noted that Vietnamese logistics firms can only undertake simple jobs in the service market.
A report from the World Bank (WB) showed that expenses on logistics account for 25 percent of GDP in Vietnam, higher than any other neighboring country. The figures are 19 percent in Thailand, 18 percent in China, 11 percent in Japan and 8 percent in Singapore.