Warehouse Automation in Vietnam: Efficiency, Growth, and the Workforce Shift

Vietnam’s Labor Market – A Step Back

First, it’s important to take a step back and look at the workforce situation in the country. The IMF highlights that Vietnam has a very low unemployment rate of 2%, which is lower than the global average. However, there are sectors within Vietnam facing a serious labor shortage, notably logistics (*1), IT (*2), manufacturing (*3), and construction (*4) among others. This shortage is increasingly prominent in the north, with many foreign firms noting difficulties in hiring workers within the manufacturing industry (*5).

Benefits of Automated Warehouses in Vietnam

1. Efficiency and Safety
Along with a transformation in job and work processes, automation is well recognized for bringing increased efficiency in a range of warehousing and factory operations—picking, sorting, storage, shipping, parts supply, WIP handling—and safety. For example, automated warehouses can reduce the need for forklifts and for workers to move around the facility, thereby minimizing risk and hazard. Researchers from the University of Toronto, the University of Berlin, and the University of Pittsburgh have recently concluded that robots reduced work-related annual injury rates by approximately 1.2 cases per 100 workers (*6).

2. Creating Jobs in High-Tech Fields

The implementation and operation of automated warehouses require specialized skills in areas like software, hardware, and automation technologies. Careers in software development, systems engineering, and equipment maintenance are flourishing as a result. As pointed out above, many sectors within Vietnam face a labor shortage, and these high-tech roles provide much-needed opportunities for skilled workers while alleviating the labor shortage the country is experiencing.

3. Transforming Manual Jobs into Specialized Roles and Collaborative Operations
Automation may replace some manual labor tasks, but it’s important to recognize that jobs are not disappearing—they’re being transformed. Automated warehouses help alleviate labor shortages in traditional warehouses by reducing the need for repetitive tasks like picking, sorting, inspecting, and packaging. This offers an environment that can provide workers opportunities to upgrade their skills and move into more rewarding positions in technology and management. This transformation elevates job quality and opens pathways to higher-paying, higher-skill employment. Further, automation in many instances still provides room for lower-skill workers that lets them work more efficiently from day one. For example, goods-to-person picking stations where the automated system works collaboratively with workers by bring them the goods directly.

4. Boosting Growth in the Logistics and Supply Chain Sector

The adoption of automated warehouses is driving growth in Vietnam's logistics and supply chain sectors. By increasing productivity and optimizing operations, automation reduces costs and enhances service delivery. According to Vietnam’s Ministry of Industry and Trade, the logistics sector has experienced an annual growth rate of 14-16%, much of which can be attributed to advancements like automation (*7). As the industry grows, so too do the opportunities for employment in related fields such as equipment maintenance, warehouse management, and IT support.

Challenges to Address for a Smooth Transition

1. Concern about Job Loses

One of the common concerns surrounding automation is the potential for job loss. According to the World Economic Forum, 41% of companies worldwide plan to reduce their workforce by 2030 due to AI (*8). While some manual roles may be reduced, parallel with this is the opportunity for workers to transition into higher-value, technology-driven roles. Automation doesn’t outright eliminate jobs—it transforms them. Further, as already mentioned, many automated systems allow for a collaborative approach that even lower skilled workers can interact with from day one. At the same time, by upskilling and retraining, workers can ensure they remain relevant in the evolving job market.

2. Retraining the Workforce for the Digital Age
One of the significant challenges of adopting automation is ensuring that the workforce is equipped with the necessary skills to operate in a high-tech environment (*9). Retraining workers to adapt to new technologies is key to maximizing the benefits of automated warehouses. By offering training programs and fostering a culture of continuous learning, governments and businesses can empower workers to thrive in more advanced roles (*10). This investment in workforce development not only benefits individual workers but also enhances the competitiveness of the entire logistics sector.

3. Initial Investment Costs and Accessibility

While the long-term benefits of automation are undeniable, the initial investment in infrastructure and technology can be a hurdle, especially for small and medium-sized enterprises (SMEs). However, automation doesn’t have to be an all-or-nothing approach. Businesses can start small—whether with a picking system, warehouse management software, a single AS/RS aisle, or another targeted solution—and scale up over time. A reliable automation provider can help identify the right entry point, tailoring solutions to your specific needs and budget. By taking a phased approach, SMEs can gradually enhance efficiency, reduce labor challenges, and future-proof their operations without overwhelming upfront costs.

Embracing Automation for a Stronger Workforce

While automation in warehouses may replace certain manual jobs, it also opens up a wealth of new opportunities in high-tech fields and transforms the logistics industry for the better. By supporting workers through retraining programs and fostering a culture of lifelong learning, companies and the government of Vietnam can ensure that its workforce adapts to technological change and thrives. Automated warehouses are not just a technological trend; they are a catalyst for creating a skilled, adaptable workforce and driving the country towards a prosperous and sustainable future.

Tam Pham

Senior Sales Engineer, Daifuku Intralogistics Vietnam
Tam Pham joined the Daifuku Group in 2019 and is now a Senior Sales Engineer at Daifuku Intralogistics Vietnam. With a background in business administration, Tam plays a key role in driving our operations forward in the country.