Ideas to support Vietnam Logistics

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At the forum “LOGISTCS: From planning to execution to connect global values” was held in HCM, the industry experts said that to promote the full potential of the services sector that is the “heart” of the export sector, in addition to quickly bring the Draft Action Plan for the national logistics to go in implication, logistics companies, as well as the ministries and departments concerned have much work to do.

Le Duy Hiep, Chairman of Viet Nam Logistics Associate (VLA) said that, infrastructures, technology, testing (relating to customs) and logistics capacity are the cause of logistics performance index (LPI) of Vietnam in 2016 drop.

VLA survey data of 2016 showed that the scale of Vietnam logistics companies are small, the service is still on a single and not highly integrated yet. Along with that, human resources for logistics have yet to be standardized, and this is a big problem. According VLA, until 2030, the industry will need 200,000 high-quality human resources in terms of skills, expertise and specialized English language proficiency as stipulated by the ASEAN …

“The cost of logistics accounts for over 20% of the total operating costs of the companies in the industry, and Vietnam also has no KPI for quality of service for the whole logistics industry …”, Mr.Hiep said.

Also expressed concern, Mr. Ousmane Dione, Country Director of World Bank said the logistics service in Vietnam is creating pressure on the export sector.

“This important service sector has many barriers, such as: restrictions on infrastructure, overall coordination of functional departments … Therefor, to solve these problems, not only the logistics industry need mechanisms but stakeholders also need to be regular communicate to jointly explore, unlocking constraints together, “said Mr.Dione.

“Infrastructure and transport services in the main ports are the biggest holdbacks for Vietnam logistics industry today” – Mr. Charles Kunaka, senior economist of the World Bank.

Reportedly, at present, the experts of the World Bank and the ministries and departments concerned such as the Ministry of Industry and Trade, the Ministry of Transport … is urgently consult businesses and the other relevant members to complete all draft action Plan for the national logistics.

Charles Kunaka, senior economist of the World Bank said that Vietnam should have a national action plan for logistics, because the cost of transport services Vietnam is now higher than the national income the average (cost shipping services of these countries in about 10-20% of the total operating costs of industrial businesses).

“Infrastructure and transport services in the main ports are the biggest holdbacks to the current logistics industry Vietnam. The logistics services in Vietnam will grow more if there is improvement. Of course, that’s just one of a series of problems to be solved so logistics can develop, ” Kunaka said and noted, while Vietnam still plan the first action for industry development, the markets in the region were “a step ahead”. Therefore, Vietnam needs to regularly update services that international services are using …

At the Forum, to solve the problem of reducing the cost of logistics services, representatives of the Ministry of Transport said that the need to reduce transport costs, because costs often account for more than 50% of the cost of services logistics.

At the same point of view, Ms. Jung Eun Oh, Head of Communications World Bank also said that Vietnam’s logistics industry should pay attention to all the other specific services, especially services transported by trucks should be improved more. According to him, transportation services by truck currently experiencing many problems, typically more than 30% of the vehicle’s return is empty.

Ms. Jung Eun Oh follow up, Vietnam currently underutilized power of logistics. While competition in this sector is extremely harsh, especially to compete on cost and this often leads to many implications. For example, low transportation cost increases logistics costs, and to ensure fiscal balance, will lead to increasing the number of flights or load …, this is easier to put pressure on the driver, making the road system rapidly degrade …

“Vietnam should have policies to help improve the overall logistics services, as well as containing provisions on minimum service levels for transportation services by truck in particular. Need to analyze and determine the needs of each area of logistics, to ensure effective investment. And more importantly the need to create more opportunities for the private sector to invest in the infrastructure of the logistics industry in the context of limited investment budget as the current … “Ms Jung Eun Oh propose.

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