Cat Lai Port in HCM City. Small and medium-sized logistics enterprises need to embrace digital transformation to enhance their global competitiveness post-pandemic, an online conference on the logistics industry heard recently. (Photo: VNA) HCMCity (VNS/VNA) - Vietnamese logistics firms, especially small andmedium-sized ones, need to get up to speed on digital transformation to enhancetheir competitiveness if they want to enter global markets after the pandemicends, experts have said.
Nguyen Ngoc Dung, Vice Chairman of the Vietnam E-commerce Association, said itis high time that SMEs realised the advantages of and the urgent need fordigital transformation, pointing out that most of them have remained slow inembracing it.
“Successful digital transformation will bring many benefits to businesses suchas reducing costs and enabling them to access all markets.”
A shipper in Vietnam delivers two parcels a day on average since it takes timeto locate addresses and wait for recipients to collect the order, whereas ashipper in a developed market could deliver 200 a day with map data to optimiseroutes, he said.
“High logistics costs not only affect the competitiveness of goods, but alsopose an obstacle for businesses when entering new markets.”
He was speaking at a seminar on “Logistics industry before the turning point ofdigital transformation” last week.
Nguyen Tuong, Deputy General Secretary of the Vietnam Logistics BusinessAssociation, said the COVID-19 pandemic has affected global investment andtrade, and supply chains have been disrupted.
Enterprises, especially logistics firms, must apply hi-tech solutions to reducecosts, he added.
Tuong listed three challenges that prevent logistics companies from adoptingdigital transformation: financial capacity, human resources and identifyingsuitable technologies.
There are only a few international standard software offerings in Vietnam,making it difficult for firms to identify optimal ones, he said.
Besides, logistics companies’ managements are not confident about data andpayment security when implementing digital transformation, he said.
“Both executives and staff remain hesitant about changing their habits for thedigital environment. Thus, we need to change the perceptions held by logisticscompanies.”
According to the Vietnam Logistics Business Association, not many logisticsfirms adopt integrated solutions in their logistics and supply chains.
Around 40 percent of software applications remain very basic such asinternational forwarding management, warehouse management, transportmanagement, electronic data exchange, and customs declaration, he added.
Tuong said the Government should prioritise development of infrastructure andlogistics service centres, and offer income and other tax breaks.
Policies are needed to ease business conditions, simplify inspection proceduresand mobilise resources for investment in logistics, especiallyregional and international logistics centres, he added.
Ngo Khac Le, a lawyer and arbitrator at the Vietnam International ArbitrationCentre and an expert in logistics and transport, said SMEs can learn from theexperience of large logistics enterprises that have applied digitaltransformation at a rather high level.
Experts said to capitalise on the EU-Vietnam Free Trade Agreement, Vietnamesefirms need to meet three main criteria: product origin, quality and digitalcapability.
EU businesses are 10-15 years ahead of their Vietnamese counterparts in termsof digital capacity, and so the latter must strive to achieve comparable levelsto be able do business with them, they said.
Thus, digital transformation is an inevitable process and Vietnam would be leftbehind if it does not do it, they warned.
Enterprises should start to get acquainted with e-contracts, pay digital taxesand digitise all business activities, they said.
Digital transformation refers to creating a new operating method based ondigital technologies like IoT, cloud, big data, AI, and blockchain to createnew production and business models.
Vietnam’s logistics costs are 6 percent higher than Thailand’s, 7 percenthigher than China’s and 12 percent higher than Malaysia’s.
The high costs have hampered the competitiveness of Vietnamese goods, accordingto experts.
According to a recent report by the World Bank, logistics costs areequivalent to 20 percent of Vietnam’s GDP, while in other countries it is 9-14 percent.
Economists said in the context of the prolonged epidemic, the use ofdigital transformation for market access and penetration is even more vital.
If Vietnam wants to improve the quality of logistics services it needs to havea clear roadmap./.
Nguyen Ngoc Dung, Vice Chairman of the Vietnam E-commerce Association, said itis high time that SMEs realised the advantages of and the urgent need fordigital transformation, pointing out that most of them have remained slow inembracing it.
“Successful digital transformation will bring many benefits to businesses suchas reducing costs and enabling them to access all markets.”
A shipper in Vietnam delivers two parcels a day on average since it takes timeto locate addresses and wait for recipients to collect the order, whereas ashipper in a developed market could deliver 200 a day with map data to optimiseroutes, he said.
“High logistics costs not only affect the competitiveness of goods, but alsopose an obstacle for businesses when entering new markets.”
He was speaking at a seminar on “Logistics industry before the turning point ofdigital transformation” last week.
Nguyen Tuong, Deputy General Secretary of the Vietnam Logistics BusinessAssociation, said the COVID-19 pandemic has affected global investment andtrade, and supply chains have been disrupted.
Enterprises, especially logistics firms, must apply hi-tech solutions to reducecosts, he added.
Tuong listed three challenges that prevent logistics companies from adoptingdigital transformation: financial capacity, human resources and identifyingsuitable technologies.
There are only a few international standard software offerings in Vietnam,making it difficult for firms to identify optimal ones, he said.
Besides, logistics companies’ managements are not confident about data andpayment security when implementing digital transformation, he said.
“Both executives and staff remain hesitant about changing their habits for thedigital environment. Thus, we need to change the perceptions held by logisticscompanies.”
According to the Vietnam Logistics Business Association, not many logisticsfirms adopt integrated solutions in their logistics and supply chains.
Around 40 percent of software applications remain very basic such asinternational forwarding management, warehouse management, transportmanagement, electronic data exchange, and customs declaration, he added.
Tuong said the Government should prioritise development of infrastructure andlogistics service centres, and offer income and other tax breaks.
Policies are needed to ease business conditions, simplify inspection proceduresand mobilise resources for investment in logistics, especiallyregional and international logistics centres, he added.
Ngo Khac Le, a lawyer and arbitrator at the Vietnam International ArbitrationCentre and an expert in logistics and transport, said SMEs can learn from theexperience of large logistics enterprises that have applied digitaltransformation at a rather high level.
Experts said to capitalise on the EU-Vietnam Free Trade Agreement, Vietnamesefirms need to meet three main criteria: product origin, quality and digitalcapability.
EU businesses are 10-15 years ahead of their Vietnamese counterparts in termsof digital capacity, and so the latter must strive to achieve comparable levelsto be able do business with them, they said.
Thus, digital transformation is an inevitable process and Vietnam would be leftbehind if it does not do it, they warned.
Enterprises should start to get acquainted with e-contracts, pay digital taxesand digitise all business activities, they said.
Digital transformation refers to creating a new operating method based ondigital technologies like IoT, cloud, big data, AI, and blockchain to createnew production and business models.
Vietnam’s logistics costs are 6 percent higher than Thailand’s, 7 percenthigher than China’s and 12 percent higher than Malaysia’s.
The high costs have hampered the competitiveness of Vietnamese goods, accordingto experts.
According to a recent report by the World Bank, logistics costs areequivalent to 20 percent of Vietnam’s GDP, while in other countries it is 9-14 percent.
Economists said in the context of the prolonged epidemic, the use ofdigital transformation for market access and penetration is even more vital.
If Vietnam wants to improve the quality of logistics services it needs to havea clear roadmap./.
VNA
