Most of the domestic logistics enterprises in Vietnam in general and in Hanoi in particular lack comprehensive development, professionalism as well as the application of modern technology, Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade (MoIT) Tran Nguyen Nam was quoted by the Vietnam Business Forum Magazine (VBF) as saying.

According to the Hanoi Department of Industry and Trade, most of the logistics service providers (LSP) are small and medium-sized, with the average capital of 18.6 billion VND. More than 60 percent of the LSPs in Hanoi are branches of LSPs in Ho Chi Minh City .

Another drawback of the LSPs in Hanoi is that up to 90 percent of them have not applied information technology into their operations. The linkage among the LSPs is weak. Many regulations are lax, impractical and not clear enough to support the businesses.

There is a big development gap between domestic LSPs and foreign ones, said Deputy Director of the Hanoi Department of Industry and Trade, Tran Thi Phuong Lan, in a recent seminar on developing logistics industry and trade inspection in Hanoi.

The number of foreign LSPs accounts for only 2 percent but their market share is up to 80 percent. They mainly provide international transport services and value-added services such as consulting, cross-docking, and order tracking.

Nguyen Tuong, Head of Representative Office of the Vietnam Logistics Association, said that the current competitiveness of the Vietnamese state-owned LSPs and private ones is so weak compared to other foreign companies. They are not capable of providing high quality logistics services. Furthermore, Tuong indicated that the current network of transport and urban infrastructure is not consistent and does not meet the needs of shippers.

Tuong suggested that Hanoi should establish a steering committee managed the Department of Industry and Trade to deal with problems that arise in the logistics industry.
Besides, logistics enterprises should improve their quality of service to compete with foreign businesses and gain the trust of customers.-VNA