Logistics companies are posting surging profits as transportation demand booms post-pandemic, but industry insiders expect further use of automation to reduce costs.

PetroVietnam Transportation posted a post-tax profit surge of 72% year-on-year to VND1.04 trillion ($41.89 million) in the first nine months.

Hai An Transport & Stevedoring recorded a profit jump of 1.5 times in the period to VND270 billion.

Ship operator Vinalines’ profit increased by 30% to VND2.77 trillion, hitting its target for the year three months in advance.

Warehouses in Ho Chi Minh City and Hanoi in the first nine months posted an occupancy rate of over 90%, according to property data provider Cushman & Wakefield.

It forecast that this rate could rise up to 100% in December thanks to the end-of-year shopping season.

Vietnam’s logistics market was ranked 11th out of the 50 emerging markets globally this year thanks to technology adoption among service providers and their customers, according to supply chain service provider Agility.

Vu Duc Thinh, CEO of Lazada Logistics Vietnam, has seen demand for storage rising in recent months.

The company has been forcing itself to digitally transform as it records hundreds of thousands of orders a day, he said.

It is set to launch a sorting center to maximize operations and reduce the number of workers.

E-commerce site Tiki has been using robots in sorting since the end of last year, while delivery companies like DHL and Viettel Post have also been adopting new technology to cut costs.

Chen HongMing, CEO of logistics firm GRS Global, said that developed countries use automation to reduce expenses by half of those in Vietnam.

An e-commerce fulfillment center in China in previous years needed 4,000 workers to sort and pack items, but last year it started using robots and now only needed 1,000 to operate the center, he said.

This also reduces delivery time by six hours, and if Vietnamese companies can adopt automation in logistics, the country will emerge as a spotlight for investors in Asia, he added.

Another challenge for Vietnamese companies is that transport infrastructure including airports, seaports, and warehouses are not up to par with global standards, Chen said.

But the country has great potential, as transportation is now seeing a lot of competition, including from famous global companies.

“Vietnam’s GDP is set to expand by 8% annually in the next 10 years, therefore its logistics share will grow.”

The country’s logistics sector is set to grow 15-20% annually by 2025 when it will reach $80 billion, according to the Vietnam Industry Research and Consultancy.

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