UPTREND MARKET FOR LOGISTICS IN VIETNAM

Japan mid-size logistics firms target Vietnam Mid-size logistics companies are expanding their distribution networks in Vietnam, a growing market where big players have still not solidified their positions, according to Nikkei Report. Japan Logistic Systems Corp will open warehouses in Hanoi, Da Nang and Ho Chi Minh City on October 1. A roughly 20,000 sq m facility in Ho Chi Minh City will receive automobiles and motorcycles from factories in the north and supply them to the domestic market. A similarly sized warehouse in the capital will act as a logistics base for mainly home appliances, with the facility to be expanded by 10,000 sq m in December to accommodate transactions with an air-conditioner manufacturer. The overall investment is estimated at US$5.19 million, and Japan Logistic Systems aims to boost annual Vietnamese revenue from $51.74 million today to $90.55 million in three years. Mitsubishi Logistics Corp, having set up a joint venture with a local firm, has begun transporting products from appliance factories to the parts of Vietnam where they will be sold. The Japanese firm hopes to eventually handle imports and exports of electronic parts, coffee and other products. Nissin Corp has joined hands with Vietnam's national railroad to operate a freight train exclusively for Japanese companies in response to growing demand to transport cars and motorcycles. The train makes two trips a week between Hanoi, where factories are concentrated, and Ho Chi Minh City, where the vehicles are sold. Appliances are shipped on the return trip going north. The products used to be transported on trucks, but deliveries were often delayed and products were sometimes damaged en route. Yusen Logistics Co has begun considering regular truck deliveries between Hanoi and Ho Chi Minh City. Since the firm already operates Bangkok-Hanoi and Hong Kong-Hanoi routes, the new route would connect the former Saigon with Thailand and China by land. Japanese companies have been setting up factories in Vietnam, in part to take advantage of low labour costs and its proximity to the Chinese market. The Vietnamese government has indicated a plan to create a special economic zone for Japanese businesses, another positive factor for mid-size logistics firms.