Abstract: Innovation capability of logistics service providers (LSPs) has been mentioned in previous studies from various aspects. According to the resource-based theory of competitive advantage, LSPs’ innovation capability plays an important role in assisting enterprises to integrate resources and increase competitive advantage. Many studies have shown that service innovation is a multi-displinary field with broad approaches from economics, marketing, organizational science, management perspectives, etc. Within logistics and supply chain areas, many studies have analyzed, evaluated and pointed out opportunities and challenges in the innovation capability of LSPs as a subject of integrated supply-chains. This research focuses on the relationship between service providers’ innovation capability of and market development of logistics enterprises in Vietnam. Based on quantitative research methods, some questions were addressed to logistics service providers in Vietnam Logistics Academy with a recommendation letter from EDINS Institute of Logistics and Supply Chain Management. The results indicate that technological innovation capability had the greatest effect on market development of LSPs.