Vietnam’s Logistics Costs: A Bottleneck That Needs to Be Cleared
High logistics costs have long been a major barrier for Vietnamese businesses. At about 20% of GDP (nearly double the global average), these costs erode profits and reduce the competitiveness of Vietnamese goods on the international market. Notably, domestic transportation costs account for 30-40% of a product’s price, while this figure is only around 15% in developed countries.
To solve this problem, the government has identified investing in logistics infrastructure as a strategic priority. The push to build new roads, seaports, and airports is expected to drive down costs, facilitate trade, and attract investment.
1. Breakthrough in Road Infrastructure: The 3,000 km Expressway Goal by 2025
Vietnam expressways are entering a new phase of rapid development. With the goal of completing 3,000 km of expressways by the end of 2025 and 5,000 km by 2030, the government has launched numerous campaigns to ensure progress.
Impressive Achievements: As of April 2025, Vietnam has a total of 2,242 km of expressways in operation. In the first four months of the year alone, four more sections of the North-South Expressway opened.
Real-World Benefits: After the Dau Giay–Phan Thiet Expressway opened, travel time from Ho Chi Minh City to Binh Thuan was cut in half, saving businesses significant time and money. This proves the direct impact of transportation infrastructure on reducing domestic logistics costs.
Network Connectivity: In addition to the North-South axis, horizontal and ring expressways like Bien Hoa–Vung Tau, HCMC’s Ring Road 3, and Hanoi’s Ring Road 4 are being expedited. This network will create inter-regional economic corridors, boosting trade, attracting investment, and developing local areas.
Positive Trend: Thanks to these efforts, Vietnam’s logistics costs have decreased from 21% of GDP in 2018 to around 16.8% in 2022.
2. Deep-Water Seaports: Opening Doors for Direct Exports
Heavy investment in deep-water ports like the Cai Mep–Thi Vai complex (Ba Ria–Vung Tau) is giving Vietnam a major edge in import and export activities.
Increased Capacity: Gemalink Port, one of Vietnam’s most modern terminals, has reached a throughput of 5 million TEUs and is expanding its second phase to accommodate mega-vessels up to 250,000 DWT.
Reduced Dependency: With deep-water ports, export goods can be shipped directly to major markets in Europe and the US on mother vessels, significantly reducing transit time and maritime transportation costs compared to transshipment through intermediate ports.
Improved Efficiency: Increased seaport capacity helps reduce congestion at traditional ports (like Cat Lai in HCMC), which in turn lowers handling and logistics fees for businesses.
3. New International Airport: Boosting Air Cargo Capacity
The Long Thanh International Airport (Dong Nai) is a strategic boost for Vietnam’s air logistics infrastructure. Phase 1 is expected to be completed by the end of 2025, with a capacity of 1.2 million tons of cargo per year.
Relieving Pressure: The new airport will ease the burden on the already-overloaded Tan Son Nhat Airport in Ho Chi Minh City.
Enhanced Competitiveness: Once operational, Long Thanh will establish Vietnam as a major air hub in the region, opening up market access for high-value or time-sensitive goods like electronics, fashion, and fresh produce.
Conclusion: Lower Costs, Broader Markets
These significant improvements in transportation infrastructure are opening up a new era for Vietnam’s logistics sector. Domestic transportation costs are being significantly reduced, making Vietnamese products more competitive. At the same time, access to international markets is being enhanced through modern seaports and airports.
However, to maximize efficiency, Vietnam must continue its synchronized investments, particularly in intermodal connectivity and administrative reform. This is the strategic path for Vietnam’s logistics to truly break through and become a key driver of economic growth.
