Vietnam's successful transition to a market economy would be vastly accelerated if it fast tracked transport infrastructure and logistics development, a new study says.

The Frost & Sullivan consultancy and the NOL shipping company's report forecasts eight per cent annual economic growth in the next decade with current business-friendly government policies that have led to large flows of foreign direct investment.

"Vietnam has the potential to become a global trading power and a leading Asian logistics and shipping hub. But with great opportunities come great challenges," said NOL group president and CEO Thomas Held.

"Having the right transportation and logistics partner with global capabilities, and local coverage will be a key factor for success in Vietnam," said Frost & Sullivan partner Kavan Mukhtyar.

The joint report said Vietnam needs to upgrade its container shipping, ports and cold chain sectors, and most importantly, its infrastructure and logistics to cope with expected growth.

Vietnam's logistics industry is under-developed, said the study. A shortage of warehouses and distribution facilities hampers the growth of "efficient logistics practices".

Over five years, Vietnam's container industry has recorded higher growth in volume to Europe and the US than the rest of Asia, but intra-Asia volumes continue to dominate throughput, the study said.

Over 10 years, container volume rose 20 per cent, but deepwater ports are lacking to handle more than 1,600-TEU ships, the report said. Ho Chi Minh City (formerly Saigon) accounts for 70 per cent of Vietnam's container throughput, but faces serious congestion with infrastructure at near to full capacity and with scheduled upgrades not expected to be ready for years.

New roads are needed, particularly in Ho Chi Minh City and Hanoi, which face increasing congestion. Vietnam's rail and air facilities also lag behind international standards, accounting for a disproportionate low share of the transport market, the report said.

The study also identified the lack of an integrated cold chain as another hindrance, particularly as Vietnam's produce accounts for around 30 per cent of its GDP. The country's recent WTO accession, it concludes, will considerably raise both domestic and international demand for specialised handling and transportation.