Thailand
Vietnam: FTAs set foundation for logistics development
The Hanoitimes – The signing and implementation of 20 new free trade agreements will accelerate production, trade and investment, thus creating a precondition for the strong growth of the logistics industry in the time to come, experts forecast.
Nguyen Duy Minh, General Secretary of the Vietnam Logistics Association, said that the country’s logistics industry has surged by 15-16 percent yearly and contributed some 3 percent to the national GDP.
There are some 3,000 logistics firms in Vietnam, of which 70 percent are located in Ho Chi Minh City. Logistics is the second most important industry in the nine key services of the city with a year-on-year increase of 10.84 percent last year.
To further develop the logistics industry, Ho Chi Minh City said that it will form logistics centers in concentrated production areas or those near seaports to provide various services and operate as ports, container depots and container freight stations.
According to Minh, Vietnamese logistics firms are strong in port operations, ground transport, customs agents, warehouses, and skilled labor. Local logistics firms are also able to provide any kind of logistics service to all businesses.
Multinational firms, which have a large market share, have advantages, including more shipping contracts with large shipping firms, better information technology, advanced management, and better relationships with global firms.
Logistics infrastructure has been the focus, with construction of the North-South Highway, northern Quang Ninh Province’s Van Don International Airport, and Lach Huyen Deep-Water Port.
To reduce pressure on ground transport, many firms have shifted to delivering goods via sea transport, inland waterways and railways.
The growing IT industry in Vietnam has helped improve the use of technology in logistics services, including last-mile delivery and shipping of frozen products.
Japanese and Chinese investors have poured more investment in freezer storage and refrigerated transportation, which could increase the shipment of fresh fruit.
Preferential policies on customs procedures, inspection, supervision and control have also created favorable conditions for logistics firms to operate, said VLA Chairman Le Duy Hiep.
Despite improvements in recent years, challenges include high road fees, inefficient sea transport management and limited capacity to develop air transport, among others.
According to VLA, logistics costs in Vietnam remain high at an average of 16.8 percent of total GDP while costs in Singapore are 8.5 percent, Malaysia 13 percent, the Philippines 13 percent and Thailand 15 percent.
Co-ordination and co-operation between logistics service providers and local manufacturers is not very effective, it said.
Many logistics service providers complain that despite the higher volume of exported goods, manufacturers are increasingly outsourcing and signing contracts with international logistics companies.
To further boost development of the logistics industry, Hiep said, lower costs and a better trained workforce are needed.
While cooperation between goods owners and logistic service providers should be enhanced, providers should improve technology application, transport and warehouse management and international transport management.
Hiep said that authorities should remove unofficial costs to encourage competitiveness among logistics companies.
Pham Quoc Long, deputy general director of GEMADEPT, said that VLA should provide small- to medium-sized enterprises with guides to improve cooperation and reduce unfair competition between them.
In addition to costs, experts stressed the necessity of training high-quality labor forces in the sector.
Workers should be assigned tasks closely linked to their skills, and standards should be set for different job positions, Long said.
In 2016, Vietnam ranked 64th out of 160 countries in the World Bank’s Logistics Performance Index and fourth in ASEAN after Singapore, Thailand and Malaysia.
To further develop the logistics industry, Ho Chi Minh City said that it will form logistics centers in concentrated production areas or those near seaports to provide various services and operate as ports, container depots and container freight stations.
According to Minh, Vietnamese logistics firms are strong in port operations, ground transport, customs agents, warehouses, and skilled labor. Local logistics firms are also able to provide any kind of logistics service to all businesses.
Multinational firms, which have a large market share, have advantages, including more shipping contracts with large shipping firms, better information technology, advanced management, and better relationships with global firms.
Logistics infrastructure has been the focus, with construction of the North-South Highway, northern Quang Ninh Province’s Van Don International Airport, and Lach Huyen Deep-Water Port.
To reduce pressure on ground transport, many firms have shifted to delivering goods via sea transport, inland waterways and railways.
The growing IT industry in Vietnam has helped improve the use of technology in logistics services, including last-mile delivery and shipping of frozen products.
Japanese and Chinese investors have poured more investment in freezer storage and refrigerated transportation, which could increase the shipment of fresh fruit.
Preferential policies on customs procedures, inspection, supervision and control have also created favorable conditions for logistics firms to operate, said VLA Chairman Le Duy Hiep.
Despite improvements in recent years, challenges include high road fees, inefficient sea transport management and limited capacity to develop air transport, among others.
According to VLA, logistics costs in Vietnam remain high at an average of 16.8 percent of total GDP while costs in Singapore are 8.5 percent, Malaysia 13 percent, the Philippines 13 percent and Thailand 15 percent.
Co-ordination and co-operation between logistics service providers and local manufacturers is not very effective, it said.
Many logistics service providers complain that despite the higher volume of exported goods, manufacturers are increasingly outsourcing and signing contracts with international logistics companies.
To further boost development of the logistics industry, Hiep said, lower costs and a better trained workforce are needed.
While cooperation between goods owners and logistic service providers should be enhanced, providers should improve technology application, transport and warehouse management and international transport management.
Hiep said that authorities should remove unofficial costs to encourage competitiveness among logistics companies.
Pham Quoc Long, deputy general director of GEMADEPT, said that VLA should provide small- to medium-sized enterprises with guides to improve cooperation and reduce unfair competition between them.
In addition to costs, experts stressed the necessity of training high-quality labor forces in the sector.
Workers should be assigned tasks closely linked to their skills, and standards should be set for different job positions, Long said.
In 2016, Vietnam ranked 64th out of 160 countries in the World Bank’s Logistics Performance Index and fourth in ASEAN after Singapore, Thailand and Malaysia.
Source: http://www.hanoitimes.vn/economy/2018/03/81E0C39C/ftas-set-foundation-for-logistics-development/