Large postal firms race for logistics industry

A Vietnam Post bonded warehouse. (Photo courtesy of the company)

A number of big postal enterprises in Vietnam, such as Viettel Post and Vietnam Post, are racing to tap into the local logistics market with a scale of nearly 62 billion USD.

Besides the delivery sector, Viettel Post has invested heavily in logistics, e-commerce, and technology to become the country's leading logistics enterprise based on high technology, baodautu reported.

The online newspaper cited Tran Trung Hung, General Director of Viettel Post, as saying that his company would focus on investing in warehouses, vehicles, warehouse logistics and international freight forwarding in 2022 and the following years.

Viettel Post would also make sufficient investment in technology appliances to solve problems in the logistics service chain, considering it the most competitive for logistics service providers, Hung said.

He added that the firm also planned to build a smart logistics and distribution centre run under the world's smart warehouse model. It was expected to increase its automation warehouse rate to 50-60 percent.

Vietnam Post has also made a similar move, making strong penetration into the logistics market. The company said on its website that logistics became one of its five key business pillars in 2022.

It established Vietnam Post Logistics Company, which focuses on providing warehousing services, order fulfilment services, international transportation services, import and export, customs, and first-mile transportation.

According to Nguyen Dinh Cuong, Director of Vietnam Post Logistics Company, in the future, along with ensuring operation and improving services that optimise costs for customers, Vietnam Post Logistics would continue to focus on investment and development in infrastructure of more than 350,000m2 of warehouses.

These will include bonded warehouses, cold storage associated with a supply chain system dedicated to agricultural logistics, e-commerce warehouses in key economic regions, and a system of distribution centres.

The company carefully calculated the location of each warehouse and works with organisations to ensure convenience in transactions and high connectivity, Cường said, adding that it also set up end-to-end logistics control centres and improved information technology capabilities to support strategic logistics goals gradually.

According to the Vietnam Post, Logistics Company is striving to become a "billion-dollar enterprise" and a leading logistics service provider in Vietnam by 2025 with branches and offices in many countries worldwide such as the US, the EU, Japan and Laos.

Analysts said that the boom in e-commerce facilitated the development of the logistics industry in 2021. Last year, the Vietnamese e-commerce market grew by 16 per cent year-on-year to reach 14 billion USD.

It is forecast that the scale of Vietnam's e-commerce could reach 52 billion USD in 2025, which would create enormous opportunities for postal companies.

Nguyen Vu Hong Thanh, Director of the Postal Department, said that the postal industry was emerging as an important industry for national socio-economic development, enjoying many opportunities in development to become the infrastructure of the digital economy.

As shared-platform business models explode, new-generation retail and e-commerce business models will need a widespread delivery infrastructure to get goods to consumers.

She said this was an advantage that not many fields had. When smart devices were popularised, the postal infrastructure needed to become a more robust support bridge for e-commerce activities, especially in rural areas, she said.

Despite many challenges faced due to the pandemic, the postal industry still achieved an average growth rate of between 20-30 percent in 2021.

The Postal Development Strategy to 2025 will focus on promoting e-commerce and logistics fields with market size of up to 70-80 billion USD by 2025, promoting the transition of the postal industry from traditional to digital services./.