How Vietnam
3PL Market is Positioned?
In Vietnam, 3PL started with small enterprises
in the early 70’s, who tried to outsource parts of their business operations to
outside service providers. These service providers eventually expanded their
geographical coverage, facilities and commodities; as well as updated their
warehousing and transportation. Compared to other parts of the world, logistics
industry in Vietnam is still in its developing phase, as supply chain processes
for instance procurement, transportation, warehousing and delivery are not
executed in an integrated manner.
In terms of revenues, Vietnam
3PL Market was evaluated at USD ~ billion in the year 2011, which
witnessed an increase to USD ~ billion in the year 2017, thus growing at a six
year CAGR of ~% in the review period 2011-2017. Logistics outsourcing aids
businesses by reducing capital and overall costs; improving customer service
and lastly helps in developing business relationships with clients. 3PL
providers can offer a variety of services to companies seeking to outsource
logistics functions in Vietnam majorly including domestic transportation,
international transportation and warehousing. Most of the foreign firms operating
in Vietnam such as Maersk Logistics, APL Logistics, NYK Logistics and MOL
Logistics were observed to offer 3PL or 4PL services whereas, Vietnamese
domestic firms could only handle 2PL services. In Vietnam, large scale
companies such as DHL, Kuehne + Nagel or DB Schenker were witnessed to be the
leading suppliers of 3PL services.
Vietnam 3PL
Market Segmentation
By Market
The freight forwarding segment within Vietnam
3PL market dominated with a massive revenue share of ~% in the year 2017. The
growth of E-commerce industry in Vietnam is one of the major driving forces for
the 3PL freight forwarding owing to increase in demand for fast delivery,
efficient inventory management and individualized shipping time. In Vietnam,
3PL market vendors are focusing on providing international freight management
and customs brokerage with their extensive knowledge of import-export processes
and international regulations, thereby leading to increase in demand for 3PL
freight. On the other hand, the warehousing segment within Vietnam 3PL market
was witnessed to capture the remaining revenue share of ~% in the year 2017.
3PL warehousing companies in Vietnam handles all aspects of shipping a
particular product from anywhere in the world to their facilities and then
straight into customers hands.
By Companies
International companies operating in Vietnam
3PL market has clearly established themselves as market leader by capturing a
whopping revenue share worth ~% in the year 2017. Major international players
operating in third party logistics segment include VN Post, Viettel Post, GHN,
GHTK, DHL Logistics, Damco, FedEx, APL, Gemadept, Vinafco and Transimex Saigon.
On the other hand, domestic 3PL players captured the remaining revenue share of
~% in Vietnam 3PL market in the year 2017.
Competitive
Landscape in Vietnam 3PL Market
Third-party logistics outsourcing is rapidly
gaining importance in the country as more and more corporations across the
world are unable to manage their complex supply chains and hence are
outsourcing logistics activities to the 3PL service providers. Competition
within the logistics industry is ramping up due to tightened capacity along
with increased consolidation within the supply chain arena, which has resulted
in fewer partners for 3PLs and increased prices. The companies operating in
Vietnam 3PL market are competing with each other by offering multiple value
added services to the customers. The leading companies in the segment are DHL,
Damco, Vinafco, Transimex Saigon and others.
Vietnam 3PL
Market Future Outlook and Projections
Over the forecasted period, Vietnam 3PL market
is expected to generate revenues worth USD ~ billion by the year ending 2018
owing to a rising trend for both local and multinational enterprises to
outsource logistics functions to 3PL services providers. It has been expected
that industrial activities in the country will expand, which will result into
growing opportunities for the foreign players. This will positively impact the
3PL market as these companies will require third party logistics partners for
handling their supply chain management. Vietnam 3PL market is estimated to
generate revenues worth USD ~ billion by the year ending 2022, thus growing at
a CAGR of ~% in the forecast period 2018-2022. Additionally, in the coming
years, 3PL companies will be emphasizing more on the technological upgradation
to engage with the customers such as ERP and SCM and the trend of Fourth-party
logistics (4PL) will be emerging in future to support the 3PL business in the
country.
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