Market Trends of vietnam road freight transport Industry
Vietnam's transport and storage sector experienced 17.08% YoY growth in 2022, due to increase in trade volume
- In 2021, the revenue of the transport and storage sector in Vietnam declined by more than USD 2 million, reaching around USD 34.37 billion. However, the revenue rebounded and surpassed USD 38 billion by 2023 due to growing into a manufacturing and export powerhouse, attracting FDI will increase the trade volume and rise in transportation services. In 2021, the total amount of freight carried in Vietnam amounted to 1,620.5 million tons, indicating a decrease of 8.7% compared to the previous year.
- In 2022, the transportation and storage sector in Vietnam saw impressive growth of 17.08% YoY. This expansion was driven by the establishment of approximately seven thousand new businesses in the sector, marking a substantial increase compared to the previous year. In the same year, Vietnam witnessed a total of 148.5 thousand new enterprises being established across various industries. Goods in Vietnam are primarily moved by road, with nearly 72% of cargo volume in the third quarter of 2022 being transported via this mode.
- During 2020-2022, the cold chain sector in Vietnam witnessed significant expansion. This growth is evident in the considerable increase of 25.2% in the capacity of cold storage facilities and the expanding fleet size of hard transportation providers. The driving force behind this expansion is the rising need for cold storage facilities and transportation services, primarily due to the growing demand for seafood exports, imports of raw food, and the distribution of goods within the domestic market. These factors include the distribution to modern trade retail outlets and food service establishments.
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Nghi Son, Vietnam's largest oil refinery, cut production by 20% since January 2022, leading to a spike in fuel prices
- In 2022, the retail price of RON 95 gasoline in Vietnam reached its highest point in eight years, reaching VND 26,287 (USD 1.14) per liter. The retail price of RON 92 gasoline reached USD 1.11 per liter. In a recent adjustment, the government raised fuel prices by VND 1,000 (USD 0.04) per liter for gasoline and VND 750 (USD 0.03) per liter for oil. As Vietnam lifted restrictions and resumed economic activities, there was a surge in fuel demand, leading to an increase in prices. This reopening of the economy and the subsequent rise in fuel demand contributed to the price hike.
- In October 2021, Vietnam experienced a notable rise in the demand for petroleum products, resulting in an upward adjustment of fuel prices in alignment with global market trends and price increases. The price of Brent crude oil followed a similar trajectory, reaching USD 95.39 per barrel, reflecting a 1.98% increase or an equivalent of USD 1.85. Consequently, the upsurge in fuel prices throughout 2022 directly impacted transportation expenses, ultimately leading to higher retail prices.
- The increase in fuel prices in Vietnam was exacerbated by domestic gasoline shortages caused by the Nghi Son Oil Refinery, the country's largest refinery, reducing production by 20% from January 2022 due to financial challenges. Although the refinery has obtained temporary investment, it might be forced to cease operations if it fails to secure sufficient liquidity or loans to procure Kuwaiti crude oil. The elevated fuel prices have also sparked concerns about inflationary pressures and their adverse effects on Vietnam's GDP, impacting the consumer price index and overall inflation.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- The textiles and garments manufacturing sector to advance in Vietnam in lines with its textile strategy
- E-commerce is expected to register a CAGR of 12.38% during 2023-27, supported by the national e-commerce development plan
- Vietnam's Logistic Performance Index surges to 3.3 points in 2023, driven by logistics sector and export growth
- Vietnam anticipates manufacturing and processing sectors to drive 90% of exports by 2030
- The country relies on fuel imports for 70% of its domestic demand, making it the highest share in trucking operational costs
- Truck sales in Vietnam grew by 11% in 2022 owing to increasing construction activities and technological advancements
- The hike in fuel and gasoline prices in 2022 along with driver shortages leading to growing road freight pricing despite infrastructure development projects
- Vietnam's CPI and PPI increased due to global disruptions in the supply of raw materials and gasoline amid increasing demand
- Construction and manufacturing sectors capturing major GDP growth supported by rising FDI inflows
- The GVA of the manufacturing sector expanded by over 12% YoY in 2022, led by the textiles and apparel sub-segment
- Road infrastructural investments up to 2025 and 2030 are expected to accelerate market growth
- Vietnam is prioritizing imports of machinery and equipment to advance its economy
- The growth in the country's mining, manufacturing, and shipping sectors, supported by government regulations, is driving truck demand
- Efforts towards digital transformation in transportation sector to boost road freight volumes in Vietnam
- Road transport and sea and inland waterways development initiatives are majorly driving growth
