Despite certain improvements in both ranking and score in the Logistics Performance Index (LPI) over recent years, Vietnam’s infrastructure quality remains unsatisfactory and hinders the development of the logistics industry.

According to the World Bank’s LPI Ranking 2023, Vietnam’s LPI score increased to 3.3 points compared to the last announcement (3.27 points) and is at the highest level since rankings began in 2007. However, the country fell to 43rd out of 160 countries and territories, from 39th in 2018.

It is estimated that Vietnam’s logistics costs are equivalent to some 20 per cent of GDP, much higher than those reported in countries such as the US and Singapore (8 per cent), Thailand (19 per cent), China (18 per cent), and Malaysia (13 per cent), which make Vietnamese goods less competitive.

A representative from the Sai Gon New Port Corporation pointed out that incomplete transport infrastructure is the primary obstacle, among others, to the development of Vietnam’s logistics industry.

Logistics services in Vietnam are largely dependent on road transport but infrastructure is overloaded and degraded, while other modes of transport remain underdeveloped. Many highway and Ring Road projects are only progressing slowly.

It has been reported that only some 20 per cent of Vietnam’s road network meets requirements for logistics services.

A report from the Ministry of Transport said about 20 per cent of seaports can serve logistics activities while more than 50 per cent are overloaded and lack the necessary utilities for logistics. In the aviation sector, 30 per cent of airports are capable of providing logistics activities but more than 40 per cent are overloaded and lack such utilities.