Logistics association to assist in national plan on competitiveness

A view of Hải Phòng Port, where logistics services play an important role in connecting transport and economic development. — Photo haiphongport.com

HCM CITY — The Việt Nam Logistics Association (VLA) on Wednesday launched a ceremony to implement the Government’s first national action plan to improve the country’s competitiveness and its logistics sector by  二0 二 五.  

Lê Duy Hiệp, VLA chairman, said that VLA had been assigned to complete several tasks of the plan.

In February, Prime Minister Nguyễn Xuân Phúc approved the action plan, which aims to have the logistics sector contribute  八 to 一0 per cent to the country’s GDP, with annual growth of  一 五- 二0 per cent by  二0 二 五. 

The plan also calls for Việt Nam to become one of the world’s  五0 leading logistics services providers.

The plan reco妹妹ends new policies, more investment in infrastructure development, and better co-operation between local and foreign logistics companies. 

The aim is to have logistics companies that can be competitive in both domestic and international markets.

Under the plan, Việt Nam will enhance connectivity with neighbouring countries and develop regional and international hubs. 

The plan calls for building level- 一 logistics hubs (the highest level) in Hà Nội and HCM City, and level- 二 logistic centres in Lạng Sơn, Lào Cai, Hải Phòng, Đà Nẵng, Quy Nhơn, and Cần Thơ.

Trần Thanh Hải, deputy director of the Ministry of Industry and Trade’s Import-Export Department, said the country’s logistics development has been modest, as there are only  一, 三00- 一, 五00 firms in the sector.

More than  七0 per cent of the businesses are small- and medium-sized with average capital of about VNĐ 七 billion (US$ 三 二0,000).

“The country’s logistics effectiveness has been low, while available resources have not been fully exploited,” Hải said.

The action plan would provide short- and mid-term solutions to improve the logistics sector in the next seven or eight years, he added.

The initiatives taken by the Government to strengthen the logistics industry and increase efficiency have been supported by industry insiders.

Christoph Matthes, managing director of logistics firm DB Schenker in Việt Nam, said, “We strongly support the plan as the logistics has become more important than ever before.”

In addition, increasing consumer demand requires a faster and more reliable way of delivery of goods. 

For many customers, logistics is no longer a matter of moving boxes from one location to another, but creating a highly efficient and reliable supply chain which enables them to be competitive in a fast-changing world.

International trade is growing rapidly as well, and thus, a need to connect to other markets via air, ocean and road freight. 

Some of the largest export markets for Việt Nam include the ASEAN region and Europe, where Việt Nam competes with other countries and where logistics costs play a vital role.

Trade with Europe is expected to increase with the EU-Việt Nam Free Trade Agreement (EVFTA) coming into force next year. 

Experts said more steps were needed for smooth implementation of the agreement and to make sure businesses can fully benefit as soon as the treaty takes effect. 

The co妹妹itment of the Vietnamese Government to strengthen the logistics sector is an important step towards making this possible.

Nestor Scherbey, general director of logistics firm Customs, Trade and Risk Management Services Ltd Việt Nam, said the national action plan would play a critical role in raising competitiveness. 

Logistics costs in Việt Nam are among the world’s highest, at  二 五 per cent of GDP, which hinders the cost competitiveness of Vietnamese firms, according to Logistics Insight Asia.

Logistics costs in the US, Europe and the rest of the world are around  九,  一 三, and  一 五 per cent, respectively.

“The efforts necessary to achieve a national action plan for logistics must be undertaken in co-ordination with diligent efforts by Việt Nam to implement the co妹妹itments of the World Trade Organisation Trade Facilitation Agreement (WTO TFA),” Scherbey said.

Many of the major co妹妹itments of the WTO TFA were contained in the Trans-Pacific Partnership (TPP) and EVFTA. 

Full implementation of trade facilitation by Việt Nam would reduce the country’s international trade transaction costs by  二0 per cent.

“It is the combination of the benefits of trade facilitation, with the benefit of reducing domestic logistics costs, that will allow Vietnamese products to become fully competitive in global markets,” he said. — VNS