Warehousing system in Vietnam: characteristics and current situation

Determining an effective warehouse system is an important factor in the development of a business. With the rapid development of the logistics industry in Vietnam, businesses need to find effective solutions to store and transport goods to meet the growing needs of the market. In this article, InterLOG will introduce readers to the warehouse system in Vietnam and its importance in achieving business success.

1. What is a warehouse?
A warehouse, also known as a warehouse, is a place to store and preserve goods, raw materials, semi-finished products or finished products to meet the needs of customers at all times. In the field of logistics and supply chain, the warehouse system plays an important role in saving transportation costs and operating warehouses effectively.

2. Understanding the role of warehousing
The role of a warehousing system includes:

Gathering raw materials, goods and storing them safely: Warehouses provide space to concentrate raw materials, goods and ensure their safe storage and preservation.
Saving transportation costs: By concentrating goods in one location, warehousing helps reduce transportation costs because goods can be collected and transported in larger units.
Responding on time: The warehousing system ensures the availability of raw materials, supplies, and goods at the right time when customers request.
Maintaining a stable supply: Warehouses help maintain a stable supply by storing and managing goods, helping businesses avoid shortages.
Responding promptly to customer needs: When there is an urgent need from customers, the warehousing system can respond promptly by providing goods from the supply source.
Enhance competitive position: Effective management of warehouse systems helps businesses enhance their competitive position in providing goods and services to customers.

3. Main characteristics of warehouse systems in Vietnam
The logistics warehouse system in Vietnam is developing strongly and meeting the requirements of businesses in storing and transporting goods. However, the development process is somewhat uneven and has important influencing factors. According to a report from the Ministry of Industry and Trade, most of the warehouse area is concentrated in the southern provinces and cities, only 30% of the area is planned in the North. However, the demand for warehouses is growing continuously as businesses boost production and business activities.

The warehouse system in the North is mainly concentrated in the provinces surrounding Hanoi and coastal economic centers such as Hai Phong. Although the rate of empty warehouses is decreasing, the ability to develop more warehouse systems in the North is increasing due to the attention of foreign investment capital.

The South, with its convenient transportation connections, is a vibrant warehouse development market. The large purchasing power and growth of retail businesses in this region create conditions for the increase of businesses and the demand for warehouses.

There are four important factors affecting the development of the warehouse system in Vietnam. First is infrastructure, with the synchronous development of the warehouse system and infrastructure. Roads, railways, waterways and airways are being invested in and upgraded, attracting investors to develop warehouse services. Second, geographical location determines the allocation of warehouses. Warehouses develop in localities with growing cargo traffic. Third, the quality of human resources affects the expansion and exploitation of warehouses. Finally, the application of IT and the development of the e-commerce market create conditions for the development of logistics services, infrastructure and warehouses.

Warehouse systems in Vietnam achieve safety and reliability

4. Common types of warehouses in Vietnam
Here are some common types of warehouses in Vietnam

4.1. Bonded Warehouse
A bonded warehouse is a warehouse or yard area established in Vietnam. The main function of this type of warehouse is to temporarily store goods for shipments from abroad or domestically that are ready for export. Depending on the needs, the owner of the goods has the right to directly authorize the agent to carry out customs procedures, transfer ownership of goods to another party, transfer goods between bonded warehouses, etc.

4.2. CFS Warehouse (Container Freight Station)
A CFS warehouse has the role of collecting or separating LCL goods transported in a common container, used when the owner does not have enough goods to fill a container. Accordingly, the goods will be brought to the collection location to wait for procedures, then separated or combined into a common container for export abroad.

4.3. Tax Suspension Warehouse
Imported raw materials and supplies that have been cleared through customs but have not yet paid taxes are often stored in this warehouse. Enterprises that own tax suspension warehouses are responsible for coordinating with customs authorities to inspect and supervise activities inside the warehouse.

4.4. Cross Docking
Cross Docking does not have a storage function but only performs the function of receiving and distributing goods immediately afterwards. The advantage of this type of warehouse is to increase the speed at which goods reach consumers and help reduce storage costs, but it is not suitable for too many or too few goods.

5. Main factors affecting the development of warehouses in Vietnam
The development of warehouses in Vietnam depends on many factors such as:

5.1 Warehouse logistics infrastructure
Another notable point of the warehouse system in Vietnam is that the logistics infrastructure is quite comprehensively developed. With a modern network of roads, railways and airways, the transportation of goods becomes convenient and fast. In particular, areas in the South of Vietnam have a warehouse system that meets the requirements of businesses with a favorable geographical location and developed traffic infrastructure. Warehouses in this area have the ability to closely connect with neighboring areas and become important transit points for goods. Moreover, warehouse infrastructure is also extremely important, arranging suitable shelves, racks and machinery will make operations easier and more efficient. Vietnam’s warehouses have been focusing on this factor in their infrastructure.

5.2 High-tech warehouses
Modern warehouse systems in Vietnam not only ensure the safety and convenience of goods, but also support professional warehouse management processes. Businesses can take advantage of warehouse management technologies and software to achieve efficiency and quickly respond to market requirements. The warehouse management process is clearly defined and complies with regulations on liability limits, helping businesses make reasonable calculations and ensure safety during the transportation of goods.

Warehousing services in Vietnam provide many incentives and utilities for businesses. From multi-purpose, high-tech rental warehouses to distribution and import-export warehouses, businesses have many options to suit their needs. Warehouses in Vietnam are reliable and can meet the diverse requirements of customers.

Electronic software systems contribute to warehouse optimization

5.3 Highly skilled warehouse human resources
Highly skilled warehouse human resources are still scarce, warehouse management requires employees with specialized knowledge and experience. The lack of specialized employees can cause difficulties in warehouse management and inventory control. Temporarily, the warehouse industry in Vietnam has a stable source of highly skilled human resources, however, in the future, this number of human resources will decrease due to the industry’s weakness in attracting human resources.

In summary, the warehouse system in Vietnam is undergoing a process of synchronous development with infrastructure and has growth in both the North and the South. Important factors such as infrastructure, geographical location, quality of human resources and IT application play an important role in the development of the warehouse system. These are the factors that InterLOG’s warehouse has satisfied for businesses throughout its practical management experience. Businesses can take advantage of and benefit from the warehouse system to achieve business success. By choosing the right warehouse system and leveraging warehouse management technologies, businesses can improve the efficiency of transporting and storing goods, thereby achieving competitiveness and sustainable development in the market.