Attracting more investment in the logistics industry creates motivation for promoting import-export activities (Photo: VietnamPlus)
Hanoi (VNA) – Vietnam is making all efforts to take advantage of the opportunities brought by the EU-Vietnam Free Trade Agreement (EVFTA) to boost its logistics industry, which plays a crucial role in supporting, connecting and promoting the socio-economic development of the country.
Vietnam's logistics industry has witnessed substantial development in recent years, with an annual growth of 13%-15%.
In recent years, the sector has been strongly invested to take advantage of opportunities from international economic integration.
Joining new-generation FTAs, including EVFTA, has brought many opportunities to Vietnam to attract investment and promote transportation demand. However, Vietnam's logistics industry has faced many challenges after more than two years since the trade deal came into effect.
High-quality logistics service
With a total import-export turnover of nearly 700 billion USD, Vietnam has become one of the 20 economies with the largest trade scale in the world in 2021. The country has also been the EU's largest commodity trading partner in ASEAN and ranked among the top 10 export countries to the EU market.
Logistics service providers play a significant role in delivering the shipments of Vietnamese products, such as textiles and garments, footwear and seafood, to the EU at a reasonable cost.
According to Deputy Director of the Ministry of Industry and Trade (MoIT)'s Foreign Trade Agency Tran Thanh Hai, the long geographic distance between Vietnam and the EU is a matter of concern following last year's six-day Suez Canal blockage caused by a stuck oil tanker.
He said that potential problems could arise in the bilateral trade activities.
Experts said joining the EVFTA also brings great opportunities to Vietnam's logistics sector, including increasing customers using logistics services and high-quality logistics centres invested by EU investors.
They stressed that Vietnamese logistics businesses have a chance to set up partnerships with EU companies, thus learning from their experience and boosting business activities.
Experts said that joining the EVFTA is also an opportunity for businesses to participate in the service chain of EU logistics companies and even their value chain, adding that Vietnamese logistics can enhance their cooperation to better their service provision.
According to Mai Tran Thuat, director of Supply Chain Solutions, Bee Logistics Group, the EVFTA created many opportunities for logistics businesses in Vietnam.
Along with the trend of shifting supply chains over the past time, EU businesses have poured great investment into Vietnam. Therefore, this is also an opportunity for logistics businesses to have more employment and improve their revenue during the COVID-19 period.
Businesses like Bee Logistics have cooperated with big firms to act as subcontractors for them, thus increasing the connection between Vietnamese logistics enterprises with European businesses, Thuat said.
However, Ngo Chung Khanh, deputy head of the Ministry of Industry and Trade's multilateral trade policy department - the unit directly involved in negotiating and signing the EVFTA pointed out challenges related to the logistics industry's competitiveness.
Le Hoang Khanh Nhut, general director of Da Nang Rubber Joint Stock Company, said logistics makes up a large proportion of the firm's product cost.
There were periods when firms had a hard time as logistics costs rocketed dozens of times, he stated, stressing it was difficult for the businesses to balance the cost of production.
However, Thuat noted that the complicated development of the COVID-19 pandemic over the last two years also created many opportunities for Vietnamese logistics enterprises, as many EU businesses have been interested in investing in Vietnam following the trend of supply chain shifting.
He added that logistics firms need to pay special attention to preparing resources, primarily financial, technological and human resources.
Meanwhile, Hai emphasised the need for Vietnam to focus on developing logistics centres at major ports to ensure the appropriate number of ships in and out.
He said that logistics is a field with huge potential for technology application, adding that it is also a key to helping businesses increase competitiveness.
He revealed that the Ministry of Industry and Trade would build a logistics service development strategy that aims to help import-export enterprises reach out to the world market./.
