I. Overview of logistics industry?
According to Mordor Intelligence, the warehousing and storage services market is expected to register a CAGR of 10% during the forecast period from 2021 to 2026. Warehousing and storage space has been allocated via service providers and even industrial parks developers, which makes storage convenient to companies or organizations for storing spare parts, equipment, vehicles, products, plastics, and perishable goods. Warehouse plays more and more important role often includes inventory management and distribution. Storage can be temporary or on a long-term contractual basis.
Warehouse and storage space may consist of environmental regulation, such as temperature and humidity control, to improve product lifespan or limit item degradation. Warehouse and storage services can make a client's merchandise always available for pick-up on short notice or distribute products to their customers faster.
With the increasing demand for an omnichannel retailing model, it is expected to drive the market. Earlier 2019, many big Logistics companies announced to invest millions of dollars in 2021 for warehouse to set up and strengthen its supply chain operations to reach more customers. Though the online buying trend is embracing, customers still prefer to 'touch and feel' in the pre-purchase process, especially before ordering big-ticket products such as furniture. Therefore such preferences are expected to increase the customer base, resulting in expanding the warehouse and storing market.
Further, over the next couple of years, industrial warehousing is expected to grow in Asia strongly. For example, in India, the quality warehousing stock totaled 211 million sq. Ft in 2019. The stock is expected to upto 253 million sqare feet (sq. Ft) in 2020 and further to nearly 300 million sq. Ft in 2021, according to JLL, a real estate services firm.
Besides China, India clearly focus on warehouse investment. Indian logistics and SCM (Supply Chain Management) sector are currently valued at USD 165 billion, with growth expected to reach USD 215 billion by the end of 2020. Furthermore, the industry has employed more than 22 million people and pushed the rank of India from 54 to 44 in the World Bank's Logistics Performance Index (LPI) 2018, in terms of overall logistics performance.
Furthermore, the COVID-19 pandemic has forced shippers to rethink their supplier networks, inventory to balance against current demand fluctuations, and lean on internal or 3PL-provided freight visibility solutions. So far, the impact has got generally higher volumes for 3PL companies and increased hours to manage at most warehouses. The pandemic impact has further resulted in many warehouses running busier than ever, mainly catering to food products, pharmaceuticals, and essential household goods. In April 2020, Amazon announced plans to hire 100,000 new warehouse workers to cover for sick employees and respond to the surge in orders from customers practicing social distancing.
Warehouse and storage space may consist of environmental regulation, such as temperature and humidity control, to improve product lifespan or limit item degradation. Warehouse and storage services can make a client's merchandise always available for pick-up on short notice or distribute products to their customers faster.
With the increasing demand for an omnichannel retailing model, it is expected to drive the market. Earlier 2019, many big Logistics companies announced to invest millions of dollars in 2021 for warehouse to set up and strengthen its supply chain operations to reach more customers. Though the online buying trend is embracing, customers still prefer to 'touch and feel' in the pre-purchase process, especially before ordering big-ticket products such as furniture. Therefore such preferences are expected to increase the customer base, resulting in expanding the warehouse and storing market.
Further, over the next couple of years, industrial warehousing is expected to grow in Asia strongly. For example, in India, the quality warehousing stock totaled 211 million sq. Ft in 2019. The stock is expected to upto 253 million sqare feet (sq. Ft) in 2020 and further to nearly 300 million sq. Ft in 2021, according to JLL, a real estate services firm.
Besides China, India clearly focus on warehouse investment. Indian logistics and SCM (Supply Chain Management) sector are currently valued at USD 165 billion, with growth expected to reach USD 215 billion by the end of 2020. Furthermore, the industry has employed more than 22 million people and pushed the rank of India from 54 to 44 in the World Bank's Logistics Performance Index (LPI) 2018, in terms of overall logistics performance.
Furthermore, the COVID-19 pandemic has forced shippers to rethink their supplier networks, inventory to balance against current demand fluctuations, and lean on internal or 3PL-provided freight visibility solutions. So far, the impact has got generally higher volumes for 3PL companies and increased hours to manage at most warehouses. The pandemic impact has further resulted in many warehouses running busier than ever, mainly catering to food products, pharmaceuticals, and essential household goods. In April 2020, Amazon announced plans to hire 100,000 new warehouse workers to cover for sick employees and respond to the surge in orders from customers practicing social distancing.
II. Warehouse and storage market in Vietnam?
Frozen and cold supply chain refers to the temperature control of perishable products to maintain maintaining quality and safety from the point of production or harvest through the distribution channels end customers.
The cold supply chain, mainly including the cold warehouse and storage system, plays an important role in the development of production, import and export of frozen seafood, fresh fruits and vegetables, and the circulation system as well in Vietnam. Cold warehouse and storage contributes to ensuring food security; ensuring food hygiene and safety; storage and distribution of supermarkets, restaurants, food chains nationwide; to store and preserve seeds for agricultural production.
Cold warehouse and storage system bring practical benefits in reducing production costs, increasing efficiency and reducing losses risks of perishable supply chains, which is still high rate. For fruits and vegetables, the level of losses can be up to 35-45% and about 25-30% for aquatic and seafood products. However, planning for cold storage is not synchronized nationwide, which is supposed to only reach 30-35% of the demand, focus on serving import and export. Focusing on serving import and export is mainly to serve the domestic market. The frozen goods market is growing rapidly in Southeast Asia with an expected increase of 20 million USD among major countries in the region. Warehouse rental costs fluctuate on average at USD 0.85 to USD 1 per pallet per day.
According to a survey by CEL Consulting in 2020, only 8.2% of manufacturers in the domestic market applying cold supply chain, which is considered much lower than the figure of 66.7% of exporters. Currently, Vietnam is in need of investment to develop more cold warehouse and storage systems. The Vietnam Association of Seafood Exporters and Producers (VASEP) have been proposing to government for low-interest loans as incentive method to build cold storage for seafood production and export.
The cold supply chain, mainly including the cold warehouse and storage system, plays an important role in the development of production, import and export of frozen seafood, fresh fruits and vegetables, and the circulation system as well in Vietnam. Cold warehouse and storage contributes to ensuring food security; ensuring food hygiene and safety; storage and distribution of supermarkets, restaurants, food chains nationwide; to store and preserve seeds for agricultural production.
Cold warehouse and storage system bring practical benefits in reducing production costs, increasing efficiency and reducing losses risks of perishable supply chains, which is still high rate. For fruits and vegetables, the level of losses can be up to 35-45% and about 25-30% for aquatic and seafood products. However, planning for cold storage is not synchronized nationwide, which is supposed to only reach 30-35% of the demand, focus on serving import and export. Focusing on serving import and export is mainly to serve the domestic market. The frozen goods market is growing rapidly in Southeast Asia with an expected increase of 20 million USD among major countries in the region. Warehouse rental costs fluctuate on average at USD 0.85 to USD 1 per pallet per day.
According to a survey by CEL Consulting in 2020, only 8.2% of manufacturers in the domestic market applying cold supply chain, which is considered much lower than the figure of 66.7% of exporters. Currently, Vietnam is in need of investment to develop more cold warehouse and storage systems. The Vietnam Association of Seafood Exporters and Producers (VASEP) have been proposing to government for low-interest loans as incentive method to build cold storage for seafood production and export.
|
|