Vietnam’s logistics sector is undergoing rapid digital transformation, but needs more strategic solutions to improve competitiveness and optimize operations, according to a survey conducted by Vietnam's Digital Trade Project in collaboration with the US Agency for International Development (USAID), and the Ministry of Industry and Trade (MoIT).

The survey revealed that the industry is in the midst of a massive digital transformation, with 68% of companies investing in new technologies such as warehouse management systems, smart transportation, and artificial intelligence (AI) to improve operational efficiency.

Viettel inaugurates Viettel Logistics Park. Photo: Viettel

The survey highlighted the diversification of technology solutions and infrastructure for digital transformation. Of particular note, 67% of companies surveyed have implemented comprehensive digital transformation strategies, with 50% establishing connections with customers and suppliers through smart port software.

In addition, 67% of respondents spend between VND1billion and VND5billion (US$39,421-$197,088) annually on digital transformation efforts that help reduce costs and increase accuracy in cargo handling, minimize transportation time, and improve customer service, the report highlighted.

A prime example of technology application in logistics is J&T Express, which opened the largest transit center in Northern Vietnam at Quang Minh Industrial Park in Hanoi in early January 2025. Equipped with automated systems such as Dynamic Weighing and Sorting (DWS) to monitor item codes, dimensions, and weights, the center can process up to 2.4 million parcels per day with 99% accuracy, increasing service capacity during peak periods.

In late 2024, Viettel Post Corporation launched the Viettel Logistics Park at the Dong Dang Border Gate Economic Zone in the northern province of Lang Son. Covering an area of 143.7 hectares, the park can handle up to 1,500 vehicles daily and provides a full range of import-export logistics services. Using digital twin technology, it digitizes data from Internet of Things (IoT) devices, enabling real-time monitoring of logistics performance, predicting cargo flows, and alerting to potential issues.

The enhancements allow the company to streamline operations and provide supply chain support solutions to companies, particularly those involved in importing and exporting at major border crossings.

Government's support to logistics development

J&T Express opened the largest transit center in Northern Vietnam. Photo: J&T Express

As of 2023, Vietnam ranked 43rd out of 139 countries in logistics performance and fifth in ASEAN, with annual revenue growth in the logistics services sector of 14%-16%, totaling approximately $40-42 billion. However, over 90% of the more than 35,000 logistics companies in the country are small and medium-sized enterprises (SMEs), many of which are still in the early stages of technology investment and digital transformation.

Local and international experts from the Vietnam Digital Trade Project found that limited funding and a lack of skilled personnel are significant barriers to this digital transformation. In addition, many businesses face challenges due to the inconsistency of their technology infrastructure and digital solutions, which results in inefficiencies in their management and operations. These differences are widening the competitive gap between large and small companies in the Vietnamese logistics market.

In response, the government has introduced many supportive policies to boost the logistics sector, with a focus on promoting digital transformation, said Tran Thanh Hai, Deputy Director of the MoIT's Import-Export Department.

The National Digital Transformation Program, set for 2025 with a vision for 2030, has identified logistics as a key priority area. The government is also exploring solutions to facilitate SMEs' access to new technologies.

Hai stressed that from 2025, Vietnam will need to implement a series of comprehensive and strategic solutions to meet the growing demands of the market.

Pham Thi Lan Huong, a local expert from the Vietnam Digital Trade Project, stressed the importance of improving the legal framework for e-commerce and digital security to create a more favorable environment for logistics companies. She also suggested setting up a green logistics startup fund to help businesses access innovative and sustainable logistics solutions at reasonable costs.

In addition to technological advancements, Vietnam's logistics sector is pivoting towards sustainability and globalization. 

The future of supply chain protection will depend on developing competitive advantages through AI and digital commerce, said Trevor O'Regan, an international expert from the Vietnam Digital Trade Project.

He also emphasized the need to establish internationally recognized universities and research institutes focused on global supply chain management to cultivate a skilled workforce.