Situation of Warehouse Services in Vietnam

Warehouse services in Vietnam are becoming an increasingly crucial component of the supply chain and logistics industry, especially as the country continues to develop and integrate into the global economy. With the rapid expansion of industrial zones and the surge in import-export activities, the demand for warehouse storage solutions is growing significantly. Key factors such as strategic location, modern facilities, and advanced warehouse management technology are now primary criteria for selecting warehouse services. In this article, KTG Industrial provides an in-depth overview of warehouse leasing services in Vietnam.

What is a warehouse?

In logistics, a warehouse is a critical element of the supply chain, serving as a facility for storing and managing goods before they are transported to their final destination. Warehouses ensure secure storage, systematic organization, and efficient inventory management from inbound receipt to outbound dispatch.

Common types of warehouses include bonded warehouses, duty-free warehouses, container freight stations (CFS), logistics centers, and cross-docking facilities. Beyond storage, warehouses play a vital role in optimizing logistics costs, enhancing operational efficiency, and maintaining business flexibility.

Popular types of warehouses

Bonded warehouse

A bonded warehouse is a designated area for storing goods that have completed customs procedures. It serves as a holding area for exports, imports, or goods in transit to a third country (Customs Law 2014) [1].

Goods stored in bonded warehouses include:

• Goods owned by foreign entities that have not yet signed a sales contract with a Vietnamese enterprise.
• Domestically produced goods that have completed export procedures.

Prohibited goods for bonded warehouse storage include counterfeit goods, hazardous or polluting items, and those restricted or prohibited for import and export.

Organizations and individuals, both domestic and foreign, engaged in import-export activities are eligible to lease bonded warehouse space. The lease term is limited to a maximum of 12 months, with the possibility of a 12-month extension.

Permitted activities within bonded warehouses include strengthening, packaging, classification, ownership transfer, and blending (if compliant with regulations).

Bonded warehouses facilitate business operations by enabling efficient storage and cross-border transportation of goods without immediate import tax obligations.

Tax-protected warehouse

According to the Customs Law 2014, a tax-protected warehouse is a facility for storing imported raw materials and supplies that have cleared customs but for which taxes have not yet been paid. These materials are designated exclusively for the production of export goods [2].

Stored goods include:

• Imported raw materials and supplies used in the production of export goods.
• These goods have cleared customs but are not yet subject to tax payment.

Storage duration:

• Not exceeding 12 months from the date the raw materials and supplies enter the warehouse.

Usage regulations:

• The stored materials can only be used for the production of export goods by the warehouse-owning enterprise.
• Strict compliance with current accounting and statistical regulations is required.

Tax-protected warehouses play a crucial role in supporting businesses within the supply chain by optimizing operational costs while ensuring flexibility in production and export activities.

CFS warehouse

A CFS (Container Freight Station) warehouse is a storage and handling facility used for consolidating, segregating, packaging, arranging, consolidating, and transferring ownership of import and export goods from multiple shippers sharing a single container. These warehouses are typically established in locations such as seaports, international airports, land border checkpoints, industrial zones, high-tech parks, and bonded areas [3].

Businesses operating CFS warehouses have specific rights and obligations, including providing quarterly reports on cargo status to the Customs Department, maintaining accounting records and cargo monitoring, and complying with legal regulations related to bonded warehouses, tax-suspension warehouses, and cargo consolidation points.

Logistics Center

A Logistics Center (also known as a logistics hub) is a facility that organizes transportation, distribution, and storage activities. These centers play a crucial role in connecting businesses with multimodal transportation services, ensuring efficient cargo movement.

Types of Logistics Centers:

• Transfer Center: Functions as a sorting and transit hub for goods between transportation points, ensuring speed and continuity in the supply chain.
• Distribution Center: Stores and categorizes goods before delivering them to retailers or end consumers. Services provided include product selection, packaging, and inventory management.
• Processing Distribution Center: An advanced version of a distribution center, where goods are not only distributed but also processed to enhance their value.
• Fulfillment Center: Specializes in managing e-commerce orders, including packaging, labeling, and ensuring timely delivery to customers.

Cross Docking

Cross-docking is a distribution method in which goods are received at a warehouse or distribution center and immediately transferred to retail stores without prolonged storage. This approach helps reduce logistics costs but requires seamless coordination between inbound and outbound operations. However, many companies focus only on improving cross-docking at the distribution center level without considering the entire logistics network, which diminishes overall efficiency.

Five Main Types of Cross-Docking:

• Manufacturing Cross-Docking: Consolidates inbound supplies for production.
• Distributor Cross-Docking: Collects products from multiple suppliers and delivers them to customers.
• Transportation Cross-Docking: Combines shipments from different carriers to optimize costs.
• Retail Cross-Docking: Receives products from suppliers and sorts them for distribution to retail stores.
• Opportunistic Cross-Docking: Transfers products from receiving to shipping areas to meet immediate customer demand.

Goods best suited for cross-docking are those with stable demand, minimal fluctuations over time, and large shipment volumes. Typical examples include perishable goods such as fresh food, pre-packaged products for rapid distribution, and high-turnover retail items such as essential consumer goods.

Warehousing services market in Vietnam

Vietnam’s warehousing market is experiencing strong growth, driven by foreign investment and increasing demand from e-commerce.

Foreign companies currently control over 75% of the country’s warehouse rental space, with major investors such as Mapletree, BW Industrial, and SLP dominating the market. In 2023, Vietnam’s warehousing sector recorded an impressive 23% growth rate, with projections indicating a sustained annual growth of 7% through 2027. Key logistics and warehousing hubs include Binh Duong, Long An, Bac Ninh, Hung Yen, and Dong Nai [4].

Notably, competition in Vietnam’s warehousing market is intensifying due to the expansion of large Chinese e-commerce warehouses near the border. These facilities enhance transportation efficiency and reduce costs for products exported to Vietnam.

Factors affecting warehousing services in Vietnam

Logistics infrastructure

Logistics infrastructure is a key factor determining the efficiency of warehousing services in Vietnam. The synchronized development of road, waterway, railway, and air transport systems facilitates convenient and cost-effective cargo movement. In key regions such as southern Vietnam, the warehouse network meets business demands thanks to its strategic location and modern transportation infrastructure.

Additionally, warehouse infrastructure itself plays a crucial role. From shelf arrangements and machinery to smart management systems, well-equipped warehouses enhance operational efficiency and minimize errors in storage and transportation.

High-tech warehouse

High-tech warehousing is a rapidly growing trend in Vietnam, driven by the integration of smart management systems and advanced technologies. These modern warehouses optimize operations, reduce costs, and improve labor efficiency, contributing to a more sustainable and competitive logistics industry.

Vietnam’s state-of-the-art warehouses not only ensure security and convenience for stored goods but also implement professional management processes, helping businesses enhance efficiency and respond swiftly to market demands. Advanced warehouse management software enables companies to control inventory, plan shipments, and track goods accurately and efficiently.

Highly specialized warehouse human resources

Vietnam currently faces a shortage of highly specialized warehouse personnel, creating challenges in warehouse management and control. While the warehousing sector has some skilled professionals, talent attraction remains weak, and the labor supply for the industry is expected to decline in the future.

To enhance warehousing systems, comprehensive training programs are essential. These should cover planning skills, operational management, customer service, and maintenance to ensure efficiency and long-term industry growth.

Geographic location

Geographic location is a crucial factor in warehouse selection, with industrial zones and economic centers being prioritized for their logistical advantages. In addition to location, factors such as regional security, living conditions, and future expansion potential must be carefully considered when investing in warehousing facilities.

Vietnam’s warehousing network has expanded significantly, especially in the southern region, due to modern transportation infrastructure and seamless connectivity. However, the northern region currently accounts for only about 30% of total warehouse space, and demand for warehousing in this area continues to grow.

Some popular warehouse services

Joint tenancy

A joint tenancy warehouse is a storage model built by individuals or businesses, divided into multiple rental sections based on demand. This option is well-suited for small and medium-sized enterprises (SMEs) due to several advantages:

• Cost savings: No need for construction investment or tax liabilities.
• Flexibility: Easily adjust space according to seasonal demand and relocate when needed.
• Operational efficiency: Rental costs are based on the actual space used, allowing for effective budget control.

However, joint tenancy warehouses may have limitations in terms of space or their ability to accommodate specialized goods. To optimize storage, businesses should carefully assess their needs and choose a reputable provider.

Rent private warehouse

A private warehouse is a storage facility owned or managed by a business, offering full control over operations. This solution is ideal for large companies requiring dedicated storage for specialized goods such as machinery, medical equipment, or oversized cargo.

Advantages:

• Maximum control: Businesses have full authority over management and organization.
• Flexibility: Full autonomy in handling inbound and outbound shipments at any time.
• High reliability: Strengthens trust with partners through professional processes.

Limitations:

• High costs: Requires significant investment in construction and operation.
• Fixed space: Limited ability to scale quickly when demand increases.
• Operational risks: Errors in management can have a substantial impact on business performance.

To better understand the differences between private warehouses and joint tenancy warehouses, refer to the following table:

Criteria	Private Warehouse	Joint Tenancy Warehouse
Definition	Owned and managed by an individual or business, used exclusively for storing their products.	A warehouse divided into smaller sections for multiple businesses or individuals to rent.
Advantages	– Full control over operations and timing. – High security, meeting specific storage requirements. – Utilization of a dedicated workforce, enhancing reliability with customers.	– Low cost, flexible, no need for initial capital investment. – Easily adjustable rental space or location based on seasonal demand. – No tax obligations or complex administrative procedures.
Disadvantages	– High initial investment, difficult to expand when needed. – Risk of damage or loss if not managed properly.	– Limited space may not accommodate specialized goods. – Requires advance planning if additional storage space is needed.
Ideal for	Large enterprises with strong financial capacity and strict control requirements.	Small and medium-sized enterprises (SMEs) looking to optimize storage costs and operational flexibility.
Cost	High investment, operational, and management costs.	Lower costs, rental fees based on actual space used.
Flexibility	Fixed space, not easily adjustable in size or location.	Flexible in both location and storage space expansion.

Conclusion:

• Private warehouses are ideal for large enterprises that require tight control over inventory and have strong financial resources.
• Joint tenancy warehouses are a cost-effective and flexible solution for SMEs looking to optimize storage operations.

Mini warehouse

A mini warehouse (or kiosk warehouse) typically ranges from 5m² to over 20m², making it suitable for small businesses, retailers, and families needing storage or a small-scale distribution point. This type of warehouse is particularly ideal for high-value goods that require careful storage.

Advantages

• Compact size, easy to manage.
• Suitable for short-term storage and moderate inventory volumes.

Disadvantages

• Limited storage capacity, which may affect supply availability.
• Higher rental costs compared to larger warehouses.

If you’re looking for a secure, compact, and easy-to-manage storage solution, a mini warehouse is a great option to consider.

E-commerce

An e-commerce warehouse is a specialized storage facility for online retailers selling on platforms like Amazon, Lazada, Shopee, and Tiki. These warehouses streamline logistics by handling order fulfillment, packaging, storage, and delivery efficiently.

Key Benefits

• Cost savings: Reduces expenses on rental space, staffing, and equipment investment.
• Simplified operations: Allows businesses to focus on product development and sales.
• Lower risk: Minimizes errors and prevents order overload.
• Scalability: Easily expands or adapts to changing business needs.

For online sellers looking to optimize logistics and streamline order fulfillment, e-commerce warehouses provide a highly efficient and scalable solution.

Regulations on warehouse services in Vietnam

Operational regulations

Warehouse operation and management play a crucial role in maintaining business efficiency by reducing storage costs, optimizing space utilization, and minimizing inventory losses. A well-structured warehouse operation process typically consists of the following steps:

• Inspection and verification of incoming goods: Ensuring that received goods match purchase orders.
• Storage and organization: Implementing efficient inventory management techniques, such as FIFO (First In, First Out), to streamline stock rotation.
• Coordination and dispatching: Ensuring timely outbound shipments to meet customer demands.

Additionally, cold storage warehouses and general warehouses require specific operational procedures:

• Cold storage warehouses must maintain controlled temperatures to preserve perishable goods such as food and pharmaceuticals.
• General warehouses focus on layout optimization to improve search efficiency and reduce inventory loss.

By adhering to these operational regulations, businesses can enhance logistics efficiency and maintain compliance with Vietnam’s warehouse service standards.

Conditions for legal capital level

The warehouse and storage rental industry is experiencing significant growth, especially in industrial zones. However, businesses providing these services must comply with various legal requirements. Key conditions for operating a warehouse leasing business include:

• Legal capital requirements: Companies must have a minimum capital of VND 20 billion to operate, as mandated by the Law on Real Estate Business (Article 10, Law No. 66/2014/QH13).
• Rental property requirements: Warehouses and storage facilities for lease must have legally registered ownership, be free from disputes, and remain within their valid usage period.

Regulations on fire prevention and fighting

Fire safety regulations for warehouses and storage facilities include:

• Clear fire prevention and safety instructions, along with assigned responsibilities.
• Installation of anti-static electrical systems and appropriate fire prevention measures.
• A trained fire prevention team and approved fire response plans.
• Ensuring accessible transportation routes, water supply systems, and active fire alarm systems.
• Official approval from the Fire Prevention Police and regular compliance monitoring.

Adhering to these legal and safety regulations is crucial for ensuring smooth warehouse operations and avoiding legal risks.

Warehouse service solutions in Vietnam

Invest in facilities

Investing in logistics infrastructure is essential for enhancing logistics capacity, attracting foreign investment, and improving domestic logistics services. Key infrastructure developments include:

• Road network: Upgrading and constructing expressways to improve connectivity between cities and industrial zones.
• Ports and terminals: Expanding port facilities to handle large trade volumes, especially at key ports like Hai Phong Port and Vung Tau Port.
• Inland waterways: Developing waterway systems along the Mekong River and Red River to enhance cargo transportation.
• Air cargo infrastructure: Upgrading major airports to increase cargo handling capacity.
• Railway connectivity: Enhancing rail links between industrial centers and ports.
• Warehouse facilities: Constructing modern warehouses near industrial hubs to optimize storage and distribution.

Strategic investment in logistics infrastructure will ensure efficient supply chain management and strengthen Vietnam’s position as a logistics hub in the region.

Apply management software

The application of advanced technology in logistics is essential for improving service quality in Vietnam. Key technological solutions include:

• Transportation Management System (TMS): Optimizes transport operations, reduces costs, and improves on-time delivery.
• Warehouse Management System (WMS): Automates warehouse operations and inventory management, accelerating order fulfillment.
• Tracking and tracing solutions: Uses barcodes, RFID, or GPS for real-time cargo tracking.
• IoT sensors: Monitors temperature and humidity for sensitive goods during transportation.
• Big data and analytics: Provides insights for inventory management and route planning.
• Mobile applications: Enhances communication among supply chain participants.
• Collaborative platforms: Shares information and optimizes resources between stakeholders.

Implementing smart logistics solutions will improve efficiency, reduce operational costs, and enhance competitiveness in the Vietnamese warehouse service market.

Training staff

To enhance logistics service quality, businesses should focus on training and developing human resources through:

• Technical training: Programs to improve skills in warehousing, transportation, and customs procedures.
• Safety and compliance training: Education on industry safety standards and regulatory compliance.
• Technology training: Guidance on effectively using logistics technologies like TMS and WMS.
• Soft skills development: Enhancing communication, teamwork, problem-solving, and customer service skills.
• Language and cultural training: Learning foreign languages and cross-cultural awareness for effective communication in international logistics.

Investing in skilled personnel will ensure efficient supply chain operations and support the growth of Vietnam’s logistics industry.

Some things to keep in mind when looking for warehousing services

When selecting a warehouse service, several important factors should be considered to ensure suitability, cost-effectiveness, and operational efficiency. Below are the essential aspects to keep in mind:

• Warehouse Location: Choose a warehouse near major transportation routes, production areas, or distribution points to save on transportation costs and delivery time.
• Size and Rental Type: Determine the exact storage space needed based on your inventory volume. Consider different rental options, such as cost per square meter, per ton, shared warehouse, or private warehouse, to find the best fit.
• Warehouse Condition: Ensure the warehouse is clean, moisture-free, and well-maintained, with an efficient drainage system. If your goods require special storage conditions, look for warehouses that can meet these requirements.
• Reasonable Pricing: Carefully review the rental price, including additional services like security, loading/unloading, and transportation. Make sure the pricing aligns with your budget while maintaining service quality.
• Services & Amenities: Look for added services such as 24/7 security, warehouse monitoring, smart inventory management systems, and other features that enhance safety and efficiency.
• Hidden Costs: Be aware of potential additional charges, such as extra service fees or maintenance costs, to avoid unexpected expenses.
• Inbound & Outbound Process: The warehouse should have a well-organized, fast, and efficient inbound and outbound process to reduce delays and operational costs.
• Rental Terms & Contracts: Clearly define rental duration and contract terms. Ensure flexibility in extending or modifying the contract if needed.
• Security & Protection: Choose warehouses with 24/7 surveillance cameras, on-site security staff, and advanced protection systems to safeguard your goods.
• On-Site Inspection: Before signing a contract, visit the warehouse in person to check its condition, infrastructure, and compliance with your storage needs.

By considering these factors, you can select the right warehouse service that aligns with your business goals and operational needs.

KTG Industrial – Warehouse rental service in Vietnam

KTG Industrial provides warehouse and factory leasing services across key industrial regions in Vietnam, including Đồng Nai, Bắc Ninh, and Hanoi.

A strategic partnership between Khai Toan Group and Boustead Projects (Singapore) ensures that KTG delivers international-standard industrial facilities, such as ready-built factories (RBFs), ready-built warehouses (RBWs), and build-to-suit factories. All projects are designed with high-quality construction and convenient connectivity to seaports, airports, and major industrial zones.

KTG Industrial has established major projects in Vietnam’s key industrial zones, including:

• Nhơn Trạch 2 (Đồng Nai) – A flagship development in southern Vietnam.
• Yên Phong I & II (Bắc Ninh) – Leading industrial projects in northern Vietnam.
• Yên Phong IIC (Bắc Ninh) – The newest development under construction.

With a commitment to high-quality infrastructure and operational efficiency, KTG Industrial supports businesses in achieving sustainable growth.

Conclusion:

Vietnam’s warehouse service sector is experiencing rapid growth, meeting the increasing demands of both domestic and international businesses. With continued investment in infrastructure and technology, the industry is expected to achieve sustainable development, playing a crucial role in enhancing Vietnam’s economy, particularly in manufacturing and logistics.