By Eric Huang    Photo：CANVA

In the current wave of global supply chain restructuring, Southeast Asia has rapidly emerged as a prime destination for international logistics expansion. Fueled by rising U.S.-China trade tensions, increasing production costs in China, and the strategic shift known as the “China +1” approach, many multinational enterprises are relocating segments of their manufacturing to Southeast Asia. Among these nations, Indonesia and Vietnam stand out as key players, drawing heightened attention from logistics providers and global manufacturers alike, thanks to their geographical advantages, economic potential, and favorable policy incentives.

Indonesia, as ASEAN’s largest economy, has long faced geographical challenges in logistics development. As an archipelagic state made up of more than 17,000 islands, with economic activities concentrated primarily on Java and Sumatra, the nation heavily relies on maritime and air transport for domestic connectivity. This geographical fragmentation poses significant hurdles to efficient logistics infrastructure. In response, the Indonesian government launched the “Sea Toll Road” initiative in recent years, aiming to streamline inter-island cargo movement. The program seeks to establish regular, scheduled shipping lines connecting the eastern and western islands, alongside the construction of new ports and logistics hubs, with the ultimate goal of reducing logistics costs and achieving regional economic balance.

Nevertheless, port efficiency in Indonesia remains a persistent issue. Take Tanjung Priok Port in Jakarta, the country’s largest port, as an example. Despite its scale, it lags behind regional peers in terms of container handling efficiency and customs clearance speed. Importers and exporters frequently encounter customs delays, redundant paperwork, and inconsistent information across government agencies. While the government has implemented CEISA (Customs-Excise Information System and Automation Application), a digital platform designed to integrate declarations, inspections, and import licensing, in practice many small and medium-sized enterprises still rely heavily on manual operations and customs brokers. Bureaucratic hurdles and informal transaction costs continue to hinder the full potential of streamlined clearance.

Vietnam, in contrast, has benefitted greatly from its export-oriented economic model and aggressive infrastructure development, driven largely by foreign direct investment (FDI). Since joining the World Trade Organization in 2007, Vietnam has welcomed substantial investments in high-tech manufacturing, apparel, and footwear, with industrial clusters flourishing in both the northern and southern regions. Ho Chi Minh City and Hai Phong have evolved into the country's two main logistics hubs, supported by neighboring industrial parks and modern port facilities. Hai Phong Port, for instance, has been further empowered by the development of Lach Huyen Deep-Sea Port, which now accommodates large vessels and enables direct exports to Europe and Northeast Asia—reducing reliance on transshipment hubs like Singapore or Hong Kong.

Vietnam’s customs and clearance procedures were once criticized as cumbersome and duplicative. However, the implementation of the Vietnam National Single Window (NSW) system has significantly improved the process. Through the VNACCS platform (Vietnam Automated Cargo And Port Consolidated System), businesses can now electronically submit packing lists, invoices, import permits, and inspection certificates, drastically reducing paper-based procedures and face-to-face submissions. Vietnam’s integration with the ASEAN Single Window has also enhanced regional digital customs cooperation. Still, regional variations persist—customs procedures in Ho Chi Minh City and Hai Phong can differ in product classification, valuation practices, and inspection protocols. As such, companies often rely on seasoned customs agents and strong relationships with local authorities to ensure smooth clearance.

Beyond ports and customs procedures, land transport and warehousing capacity are also critical to evaluating a country’s logistics efficiency. In Indonesia, while major cities are connected via an expanding road network, many areas still suffer from poor road conditions and congestion, especially in urban zones, which impacts last-mile delivery predictability. To cope with these challenges, major e-commerce players and third-party logistics providers (3PLs) have developed proprietary distribution centers or partnered with local logistics firms to manage flexible delivery operations. In contrast, Vietnam has made considerable progress in road infrastructure over the past decade, particularly with the development of the North-South Expressway and various logistics zones. These improvements have enhanced predictability in domestic transport, particularly along the Hai Phong–Hanoi corridor in the north and the Ho Chi Minh–Bien Hoa–Binh Duong corridor in the south, which together support a stable inland port and container depot network.

On a practical level, import and export operations in Indonesia and Vietnam differ not only in approach but also in risk profiles. Indonesia's import landscape is shaped by frequent regulatory shifts and tariff adjustments, especially in sectors such as agriculture, electronics, and industrial raw materials. For example, the newly enforced national standard certification system (SNI) requires certain products to pass approved testing procedures before customs clearance. Moreover, Indonesia applies both quota systems and out-of-quota tariff surcharges on selected goods, necessitating careful cost calculations and import timing strategies by international traders.

In Vietnam, although the overall trend leans toward liberalization, the government maintains pre-approval and scrutiny processes for sensitive products like medical equipment, agricultural goods, and telecommunications devices. Importing wireless-enabled goods, for instance, requires type approval and frequency usage licenses from the Ministry of Information and Communications (MIC), a process that may take two to three weeks—posing a bottleneck for urgent shipments. Furthermore, Vietnamese customs authorities have increasingly emphasized valuation compliance, especially for high-value goods. This means greater scrutiny on invoice accuracy and a higher likelihood of physical inspections or value re-assessments.

In the area of cross-border e-commerce and fulfillment logistics, the two nations have followed different trajectories. Indonesia boasts a thriving domestic e-commerce ecosystem, with platforms like Shopee, Tokopedia, and Lazada operating multi-tiered logistics networks across the archipelago. Global brands often work through joint ventures or local agents. To meet the demand for rapid deliveries, Indonesia has established large sorting centers and fulfillment warehouses in cities such as Jakarta, Surabaya, and Medan. However, due to a lack of simplified B2C import regulations, many small cross-border parcels still undergo full customs clearance procedures, adding friction to the consumer experience.

Vietnam, on the other hand, has leveraged its strategic location and strong manufacturing base to attract global e-commerce firms to set up fulfillment centers. Acting as a regional export hub, Vietnam enables direct shipping to other Southeast Asian countries. Additionally, the Vietnamese government has introduced a pilot customs clearance mechanism for cross-border e-commerce, allowing qualified platforms to process thousands of small parcels daily via simplified procedures. This policy greatly enhances clearance efficiency and end-user satisfaction—an attractive proposition for multinational sellers using Vietnam as a consolidation base.

In summary, while both Indonesia and Vietnam are emerging as pivotal logistics hubs in Southeast Asia, their operational landscapes differ significantly due to variations in geography, policy orientation, infrastructure maturity, and regulatory sophistication. Indonesia's focus lies in bridging its internal connectivity and modernizing its logistics systems across islands, with the primary challenge being harmonization and transparency. Vietnam, by contrast, accelerates its global supply chain integration through export-driven policies and free trade agreements, supported by digital customs platforms and streamlined inland transport systems. As RCEP and other regional trade frameworks deepen their influence, the logistics role of these two nations will only grow in strategic importance. Companies that understand and adapt to the customs dynamics and regulatory nuances of each will be well-positioned to lead in the next wave of Southeast Asia’s economic evolution.

Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.