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Some advantages of investing in logistics
The role of logistics is to get goods where they need to be to meet consumer demand. This requires a series of complex supply chain management processes to be coordinated to ensure efficiency and timely delivery. In today’s business, logistics is more important than ever. Investing in logistics can be an option for many investors. Vietnam is ranked 11/50 emerging logistics markets globally thanks to the transformation of businesses providing and using this service.
The following article by Siglaw will present the advantages of investing in logistics, and the advantages of investing in logistics in Vietnam:
Advantages of investing in logistics today
Demand for logistics services is growing rapidly
The global logistics industry is worth $4 trillion and is expected to grow to $15 trillion by 2050. This growth is driven by the rise of e-commerce and the increasing globalization of trade. Investing in logistics has been a trend for some time now. Logistics companies can provide investors with high returns on investment and a steady stream of income.
Logistics companies are generally very profitable
One of the main reasons is that they provide essential services to businesses and consumers. Without logistics companies, businesses would have difficulty getting their products to market and consumers would have difficulty getting the items they need.
Another reason logistics companies are highly profitable is that they often have exclusive contracts with large corporations. This gives them a steady stream of business and helps protect them from competition.
Finally, logistics companies tend to locate in areas with a lot of infrastructure. This makes it easier for them to set up shop and get started quickly. All of these factors combine to make investing in logistics a great financial move.
Logistics is a Relatively Low-Risk Investment
There are a few reasons why logistics is a relatively low-risk investment.
First, the industry is generally recession-proof. Companies still need to ship goods even in tough economic times.
Second, there is always a need for logistics services. Even with the rise of e-commerce, businesses still rely on brick-and-mortar stores and need to get their products to those locations.
Third, the barriers to entry in logistics are relatively low. Anyone with a truck and some basic equipment can start a logistics business. And finally, the profit margins in logistics are often very good. Since logistics companies typically have fixed costs, they can make a lot of money when business is booming and still be profitable when business is slow.
Investing in logistics can bring significant tax advantages
Investing in logistics can bring a number of tax advantages, depending on the jurisdiction in which the investment is made. For example, many jurisdictions offer incentives for investments in infrastructure projects such as toll roads, bridges, and airports. Additionally, many governments offer tax incentives for investing in businesses that create job opportunities in disadvantaged areas.
Investing in logistics can help diversify your portfolio
Most portfolios are heavily invested in stocks and shares, which can be volatile and prone to unexpected shocks. Investing in logistics, on the other hand, tends to be more stable and provide more consistent returns. This makes them an ideal way to balance your portfolio and reduce overall risk.
Investing in logistics also offers strong growth potential. The global logistics services market is expected to reach $15.5 trillion by 2023. This represents an annual growth rate of 7.4%, which is much higher than the average for other sectors.
Advantages of investing in logistics in Vietnam
- In Vietnam, the system of road traffic infrastructure, airports, seaports, warehouses, commercial infrastructure, and logistics centers is constantly expanding on a large and widespread scale. Along with that, the accompanying services have been promptly meeting the extremely diverse requirements of the market. The procedures and customs clearance time for exported goods have also been significantly improved. This helps attract more foreign investors to invest in this field.
- In addition, the work of perfecting legal regulations on logistics in recent times has been of interest to the Vietnamese Government. The increasingly deep international economic integration of Vietnam, especially the implementation of new-generation Free Trade Agreements (FTAs), requires appropriate regulations, creating favorable and open conditions for the logistics service industry to develop, promoting domestic investment and international cooperation.
- Specifically, Decision No. 200/QD-TTg dated February 14, 2017 was issued, the Government approved the Action Plan to enhance competitiveness and develop Vietnam’s logistics service industry by 2025, which sets out 06 goals, 60 specific tasks with many comprehensive solutions, aiming to help this industry overcome difficulties and challenges, reach the advanced level of the region and the world, and meet the requirements of economic development of the country.
Solutions for developing the logistics service industry in Vietnam
In the coming time, in order to promote the development of the logistics service industry, Vietnam needs to focus on implementing the following solutions:
Continue to improve policies and laws on logistics services: amend a number of regulations and supplements on logistics services in the Law on Commerce, creating a favorable legal basis for logistics activities; amend and promulgate new policies and laws regulating logistics services, multimodal transport, and cross-border transport.
Issuing policies to support the development of the logistics service industry: building effective policies to support the development of logistics services in localities, in accordance with the socio-economic characteristics of each locality. Supporting logistics service enterprises in accessing domestic and foreign capital sources, developing markets, training, and accessing information.
Prioritizing the budget to support research, application, and technology transfer for the development of logistics services, contributing to improving the capacity and competitiveness of logistics service enterprises. Building strong logistics corporations, promoting overseas investment and exporting logistics services, creating orientation and motivation for market development.
Completing logistics infrastructure, ensuring the synchronization of traffic infrastructure and transportation services with the goal of developing the logistics service industry; Reviewing and adjusting planning, linking planning on logistics centers, dry ports, and bonded warehouses in a unified whole.
Developing the logistics service market. Hosting and organizing international seminars, fairs, and exhibitions on logistics; Learning from foreign experiences to exchange investment opportunities and cooperation in developing logistics services;
Focusing on improving logistics infrastructure associated with e-commerce, Focusing on training human resources for both enterprises and management agencies to serve the rapid development of logistics services.
Promoting international cooperation in the field of logistics. Continue to expand logistics infrastructure connections with countries in the ASEAN region, Northeast Asia and other regions in the world to promote the effectiveness of multimodal transport, cross-border transport and transit; Build traffic works, warehouses, logistics centers on routes and corridors connecting Vietnam’s ports with Laos, Cambodia, Thailand and Southern China.
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