According to DHL Group's report, land transportation in Vietnam and Southeast Asia is surge developing with an expected growth of 5.5% in the e-commerce market. The projections are built based on Southeast Asia's leading economic markets, as manufacturing has been recovered and businesses have regionalized and diversified their supply chains.
Specifically, DHL predicts that the ASEAN land transportation market will achieve a CAGR point of over 8% during 2020-2025. Consumer e-commerce and B2B e-commerce will predictably increase by 70% by 2027, while the demands of last-mile delivery and integrated logistics solutions will rise.
Due to the negative impact globally of the pandemic, air and sea freight rates fluctuate sharply, and overloading occurs often. The Vietnam Maritime Administration (VMA) report showed that most cargo routes to the US and EU have increased costs from $1,000-$5,000 (before epidemic) to $7,000-$8,000. Special shipments even cost up to 10,000$ per container. High shipping costs have caused challenges for Vietnamese exporters. They must conduct a renegotiation with lots of time and effort or continue to suffer from reduced profits. Any actions also cause harm. Not just that, sea freight rates are predicted to rise for the foreseeable future until the containers shortage improves.
On the other side, land transportation and intermodal transportation are offered at stable rates, adequate capacity, and easier border access in Southeast Asia regions. Land transportation plays a significant role in international long-distance shipping in Asia as it offers a sustainable and cost-effective logistics solution.
Land transportation is safer and faster than seaway. Indicators showed that three-quarters of the total goods in Vietnam are delivered by land transportation. The land transportation solutions are becoming more flexible with truck forces that can manage domestic, cross-border, long-distance, and short-distance transportation.
According to the Ministry of Transport, the country's road transport system stretches over 570,000 km, including over 24,000 km of national highways, more than 1,000 km of highways, and nearly 27,000 km of urban roads. In 2020, the National Assembly approved a resolution to construct 4,000 km of roadways to connect regionals across the country as well as the ASEAN road system by 2030. Thus, many opportunities for growth and acceleration come with land transportation in Vietnam.
More and more customers choose land transportation by trucks because of their lower carbon emissions than air freight. An air shipment from Jakarta to Bangkok transit to Singapore emits 50% less carbon and saves 35% in costs than a direct route. In comparison, cross-border transport from Singapore to China is reduced up to 83% of the carbon emission compared to airways.
Now, land transportation in Vietnam promises to create a greener, more efficient, and sustainable future through technology and more sustainably through fuel efficiency. In conclusion, these factors transform the land transportation industry and provide more sustainable logistics solutions than ever before.
For more advice on land transportation in Vietnam in 2022, don’t hesitate to contact us at 19003133 or contact@als.com.vn.
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