The Vietnam road freight transport market is expected to grow at a CAGR of 7% due to the developing trade infrastructure and the advantage of the geographic location to Vietnam, says a report by Ken Research
1. “Investment in Infrastructure:” The infrastructure in Vietnam’s Road Freight market has witnessed massive development in the recent years
Recent Trends in Vietnam Road Freight Market
The Ministry of Transport, Vietnam has launched Vietnam Road Administration (VRA), a subordinate administrative agency to administer and supervise the road transportation system. The VRA is continuously working for the management, planning and improvement of the infrastructure through regular up-gradation in the Road Design Standard. By 2030, VRA is planning to invest $14Bn in order to provide a continuous road network in Central Vietnam, through a north-south highway of 1,372km. In 2019, the ministry of Transport ordered the installation of digital toll booths across the expressways nationwide to increase the efficiency of transportation and reduce the waiting time. Setting up monthly payments would help in reducing the informal fee and a 10% decrease in total toll fee.
2. The Value Chain in Vietnam’s Road Freight Market is dominated by Mid Mile Services
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As of 2019, Mid Mile accounts for 37% of all movements within the supply chain while take up 35% to 50% of the total supply chain cost, depending on the distance and inter-state or inter-country permits. Type of Trucks used for Mid Mile are usually Trailer trucks ranging from 10T to more than 20T. The market is growing mainly due to focus on the infrastructure development, specifically the supply chain.
3. Revenue from Road Freight is expected to reach VND 276 Trillion by 2025 from 2 Billion tons of Freight being carried in 2025
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The Road Freight market in Vietnam is expected to generate VND 276 Trillion revenue. As Vietnam develops a major high-capacity, high-speed transport network – North-South Expressway, shortening economic distances across the country, new transport nodes are created as potential candidates for future economic clusters. The Government of Vietnam has laid out a master plan through 2035 to develop the industrial sector, with a national goal to achieve a 12.5% annual growth rate of industrial production value through 2021 to 2025 and 11% from 2026 to 2035.