AI logistics: reducing cost, strengthening businesses

Deputy Prime Minister Trinh Dinh Dung receives Robert Yap, Executive Chairman of YCH Group

Hanoi (VNA) - In the context that Vietnam's logistics industry still has many shortcomings, has not yet reached its full potential, affecting the competitiveness of enterprises, the construction of logistics centers and ports applying artificial intelligence (AI) and connecting unique and new 4.0 technologies in Vietnam is considered a "bright spot" in the overall picture of the logistics industry.

Change logistics management thinking in forth industrial revolution

With the rapid development of the economy, the gap in the traditional competitive areas such as goods quality or prices is narrowing. Manufacturers and exporters have moved to compete on the speed of delivery, streamline and reduce the cost of the flow of goods in the distribution management system. Logistics has thus become an important element in the entire production, circulation and distribution process of the economy, especially in international trade today.

However, according to a research of the World Bank (WB), Vietnam's logistics is equivalent to 20.9% of GDP, of which transport costs account for about 59%. This is a much higher figure than in developed countries in the world and in the region.

According to the analysis of economic experts, the lack of inland ports, logistic centers of large scale and convenient location in each key economic region to act as a hub for goods distribution and transfer has affected the optimize transport activities, especially multimodal transport. This is a big barrier, the bottleneck for transport activities increases transport costs, reducing product price competitiveness. This is particularly important in the context that Vietnam has just signed 12 free trade agreements with many countries and large economic communities.

At the national teleconference on logistics held in April 2018, Prime Minister Nguyen Xuan Phuc emphasized that high logistics costs are a major barrier, affecting the competitiveness of businesses and hinder the development of Vietnam's economy. The reduction of logistics costs in general and transportation costs in particular is an urgent task and has great significance in improving the competitiveness for economic development.

In addition, in order to remove the barriers of the development of logistics services, it is necessary to change the mindset of logistics management so that Vietnam can catch up, accompany and rise up in the 4.0 industrial revolution. Therefore, it is necessary to quickly apply strong technological solutions to increase the operational efficiency of the industry and reduce expenses for enterprises. Logistics enterprises should proactively apply modern science and technology following the trend of forming logistics industry in the 4.0 science and technology revolution to improve competitiveness, service quality and reduce  service fees.

Comprehensive solution for logistics

In the context that Vietnam logistics enterprises have only provided a few simple services in the logistics chain such as warehousing, freight transport, freight forwarding, loading and unloading, sorting services, packaging,. .., recently T&T Group has decided to "shake hands" with the leading Asian partner in the field of logistics, YCH Group (Singapore) to invest in developing the International Logistics Center and inland ports applying artificial intelligence and technology 4.0 connectivity in Vietnam. This project will contribute to reducing costs, increasing competitiveness for manufacturing businesses, helping them better connect with external markets, creating conditions for boosting export activities.

According to Mr. Jeffrey Tan, Business Development Director - YCH Group, the International Logistics Center and Inland Port is an important project with the participation of not only Vietnam but also all countries in ASEAN and China. The project will become the hub connecting China, ASEAN countries and other logistics centers in the region through Vietnam. Besides, this is not just an inland port. After completion, the International Logistics Center and Inland Port will provide the entire supply chain solution for customers and enterprises in Vietnam. /.