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What is logistics service? What is the status of the logistics industry in Vietnam?

Recently, the Vietnamese economy has received a new good news, that is joining TPP. You hear, joining TPP leads to a huge opportunity for logistics and international freight forwarding companies in Vietnam. So you have a question what logistics is? And how to do logistics in Vietnam?
As one of the companies operating in the logistics industry, we realize that many people are very vague about this concept and have not really understood this field. Through this article, we hope to provide you with enough knowledge to answer the question: “What is logistics?”

Logistics – Red Hanging Cargo Container on Sky Background.

What is Logistics?

Logistics is one of the most difficult to explain terms and translates into Vietnamese. Therefore, we would like to keep this call instead of phrases such as “logistics” or “logistics” that people often call to replace logistics words, because logistics is actually a broad concept and covers both of these activities.
In the simplest way, logistics is a process of planning, applying transport modes and controlling the flow of goods, capital goods or related information from the starting point (beginning in) until the end of the product / service (output).
Currently, Vietnamese logistics companies start accepting the term logistics in business, like other words we often encounter in reality such as containers, marketing, etc.

Role of Logistics

The flow of goods in the economy is like the circuits that pump blood throughout the body, so we can consider the logistics industry as the lifeline of a nation’s economy. The process of optimizing transportation, shortening time as well as reducing costs for manufacturers and consumers is called logistics management.
Today, the power of a nation is the strength of the economy, which plays an important part in import and export activities. Good logistics management helps to increase import and export activities, diversify and source domestic goods and bring goods to many parts of the world, bringing huge profits to the country.

Logistics services in Vietnam

The term logistics appears officially in the Commercial Law in 2005, in which article 233 of the law states that: “Logistics service is a commercial activity whereby traders organize one or more jobs including receipt. goods, transport, storage, storage, customs clearance, other paperwork, customer advice, packaging, code signing, delivery or other related services goods under agreement with customers for remuneration. ”
Revenue from Vietnam logistics market accounts for 20 to 25% of the country’s GDP, estimated at about 35 to 40 billion USD. But this fertile market is not owned by Vietnamese people.
After the process of integration and opening up the economy, there are currently more than 25 international logistics enterprises operating in Vietnam, including big multinational companies such as UPS, Maersk, NYK, DHL, etc. This company accounts for nearly 80% of the logistics supply market in Vietnam and is on the rise.
In contrast, the service scale of Vietnam’s logistics companies is still quite small, currently meeting only about 10 to 20% of market demand. This is a very difficult problem for Vietnamese companies due to the great pressure of foreign competition. So what is the answer to this competitive problem?

Translation: Tiếng Việt