The COVID epidemic has posed significant problems to all areas, including the world economy in general and Vietnam in particular. Logistics operations have also been impacted since then.

Logistics is a fundamental service industry in the overall structure of the national economy. It contributes to supporting, linking and fostering socio-economic growth of the entire country as well as each area. Therefore, it adds to the economy’s competitiveness. Vietnam is regarded as a promising and appealing market for the expansion of the logistics service sector.

Here are some facts regarding the status of the logistics industry in parallel with the unpredictable impact of the COVID-19 epidemic. Due to the inconsistent anti-epidemic policies across localities, the supply chain for import and export commodities, circulation, and transportation in the nation has been interrupted. It became much worse during the period of social estrangement, creating several challenges for logistical activities. When the outbreak first appeared, almost 60% of logistics businesses saw a dramatic decline in income and productivity. At the same time, in the setting of erratic international and domestic commerce, the lack of labor resources as well as the health, morale, and productivity of employees were also badly affected. In addition to the aforementioned elements, maritime freight prices were rising at record rates and seemed not to halt very soon. In particular, freight rates to Thailand (Bangkok port, Laem Chabang) range from 1,600 to 2,500 USD per container, depending on the carrier; freight rates to the Philippines (Davao, Cebu, General Santos) range from 4,300 to 5,300 USD per container; shipping to US West Coast ports ranges from 12,000 to 14,000 USD per container; the costs are also high to deliver to the east coast of the United States, such as New York and Boston; (Baltimore, Miami, New Orleans, Houston…).

Moreover, there are also other clear causes, such as the lack of containers, the skyrocketing popularity of air travel or the amount of traffic congestion. According to Ms. Lan Phuong Vo, Head of the VLA’s Transportation Department, growing cost of sea freight would make it difficult for Vietnam’s logistics and import-export companies to operate in the next year. Despite a decline in October and November 2021, logistics demand surged once more.

The Ministry of Industry and Trade has made the following recommendation based on the aforementioned problems: “In order for the logistics industry to overcome obstacles and seize development opportunities, it is necessary to continuously mobilize all resources to innovate logistics infrastructure, step by step present modernization of transportation infrastructure and logistics centers in accordance with national and regional economic development planning.”

Since it is currently unattractive, offers no incentives and has less encouragement than investing in industrial parks, the investment mechanism in the sector of logistics infrastructure has to be upgraded.