Domestic logistics businesses should seek to improve their capacity, infrastructure and new services to enhance their competitiveness under pressure from signed or to-be-signed free trade agreements (FTA), experts said.

The Hai Quan (Customs) Online newspaper quoted Deputy General Director of Avina Logistics JSC Le Hoang Oanh as saying that the signing of free trade pacts and the establishment of the ASEAN Economic Community (AEC) in late 2015 will increase goods exports and imports as well as foreign investment.

According to Oanh, many logistics firms from ASEAN member states have expanded their investment in Vietnam. She noted that ASEAN businesses have a better understanding of Vietnamese culture and etiquette than those outside the bloc, facilitating easier development and integration in the market.

She revealed that her company will improve personnel capacity and invest in management technology for rapid, accurate and effective goods transport while promoting cooperation with other logistics firms and focusing on road transport.

Meanwhile, Deputy General Director of Thang Loi Logistics JSC Ngo The Hung said it is difficult for domestic logistics players to compete with foreign rivals since they have greater investment capital. In addition, many FDI customers tend to choose logistics providers who hail from the same country as them.

He added that his company is increasing investments in building storage facilities an improving its road transport capacity from Thailand, Laos, and Cambodia to Vietnam and China, in anticipation of the establishment of the AEC.

Logistics companies at home are following the same strategy of increasing their capital for investment in infrastructure and service development, according to Secretary General of the Vietnam Logistics Business Association Tran Huy Hien.

He cited most recently the Gemadept JSC’s injection of over 340 billion VND (16 million USD) to build a logistics centre at the Song Hau industrial park in southern Hau Giang province. Small- and medium-sized enterprises are also doing all they can to expand production, he added.

He pointed to capital as the biggest challenges for Vietnamese logistics firms weak in technology, human resources and experience.

The connection between businesses is not strong enough, he added.

He suggested the State design separate loan policies for logistics firms and simplify goods customs clearance to help businesses reduce transport time and cost.-VNA