Illustrative image (Photo: VNA) HCM City (VNA) - Vietnam has emerged as apowerful manufacturing powerhouse in Asia but “weak logistics activities havelimited its trade competitiveness”, the deputy minister of industry and tradesaid at a logistics forum held in HCM City on November 24.
Speaking at the fourth annual Vietnam Logistics Forum,Deputy Minister Do Thang Hai said Vietnam, like many emerging Asian economies,had been following an export-led growth model through trade liberalisation andforeign direct investment.
The country, which has registered high economicgrowth, has had one of the highest export growth rates in Asia during the lastdecade, making it one of the most attractive investment destinations formanufacturing in Asia, he said.
Since its membership in World Trade Organisation(WTO), the country’s import-export value has increased 2.9 times, from 111.2billion USD in 2007 to 327.76 billion USD in 2015. Retail market revenue hasincreased by 20-25 percent annually.
To achieve these results, the logistics sector hasplayed an essential role in the country’s socio-economic development, Hai said.
The sector “plays a key role in linking activities ofthe global value chain, from supply, production and distribution to marketexpansion in many economic sectors,” he said.
Vietnam this year ranked 64th out of 160 countries inthe World Bank’s Logistics Performance Index, and fourth in the ASEAN region,after Singapore, Malaysia and Thailand.
With an annual growth of 16-20 percent in recent years,logistics has been among the sectors with the most stable growth.
However, the sector is facing challenges that limitthe country’s trade competitiveness, speakers at the forum said.
Most local logistics providers are at a disadvantagewhen it comes to offering modern logistics value-added services and Vietnamesemanufacturers have suffered from relatively low levels of logistics performanceand high logistics costs.
Ruth Banomyong of Thammasat University in Thailandsaid several estimates have shown that Vietnam’s logistics costs are muchhigher than those of China, Thailand and Malaysia.
“There is limited availability of reliable datarelated to logistics in Vietnam,” Banomyong said. “The private sector does nothave access to reliable logistics statistics to develop their respectivestrategic plans.”
Au Anh Tuan, deputy director of the Supervision andControl Department at the General Department of Customs, said “The legalframework and regulations covering the logistics sector remain difficult andthe lack of close coordination between relevant organisations has had anegative impact on the sector’s performance.”
Tran Bao Ngoc, director of the Transport Department,said that poor connectivity was a constraint to a multimodal transport system,caused by poor infrastructure and vehicles as well as a lack of moderninformation system in river ports, seaports and railway stations.
Tran Thanh Hai, deputy head of the Ministry ofIndustry and Trade’s Import Export Department, said a majority of logisticenterprises, mostly small- and medium-sized, had weak capacity and small marketshare.
In addition, competition from foreign logisticscompanies has put pressure on small- and medium-sized local service providerswho need to find niche segments to serve.
There is also currently no official authority in Vietnamwith overall responsibility for logistics.
Most speakers agreed that it is critical to improvethe current state of the logistics sector to sustain economic growth.
The Ministry of Industry and Trade has been assignedto develop a logistics national action plan, a challenging task as logistics isa sector that involves several government agencies.
The ministry is developing an action plan which willaddress logistics issues and provide guidance to the Government to formulate acomprehensive policy for boosting the logistics sector.
Private investment in infrastructure to developlogistics services should be stimulated through private-public partnership, saidDeputy Minister Hai.
Laws and regulations should facilitate the operationof the industry, while ensuring fair and transparent competition and be similarto international standards, he said.
Le Duy Hiep, Chairman of the Vietnam LogisticsAssociation, called for policy incentives in taxation, land use and bankcredit, and for investment in logistics infrastructure, such as airports andseaports, logistics centres, inland customs depots and IT systems.
Hiep said investment was also needed in e-commerce anddistribution and urban retail networks as well as in IT at the distribution andretail level.
To enable trade, he said that administrativeprocedures should be simplified to reduce costs and time for logisticsservices.
Hai from the Import Export Department, said logisticsis related to many sectors, including transport, industry and trade, planningand investment, customs, border defence, quarantining, banking, and educationand training.
Therefore, it is vital to establish a nationalcoordination committee for logistics to help identify the role and function ofeach ministry and promote consistent coordination among the agencies to dealwith logistics-related problems.
Some countries, such as Australia, Japan, Thailand andMalaysia, have implemented this institutional model, according to Hai.
In these countries, an inter-agency logisticscommittee is typically established at the national or provincial level. Thecommittee is supported by policies that strengthen the entire system and enableparticipation, consultation and public-private partnership, he said.
Also speaking at the event, Massimiliano Cali, senioreconomist at the World Bank, said the Vietnamese logistics sector should be reformedbased on policy lessons from Indonesia.
He recommended that the country establish a logisticsstatistical system to support strategic planning, evidence-based policy makingand monitoring of transport policies.
Vietnam has 1,300 logistics businesses, mainlyoperating in shipping and delivering, transport, warehouse, seaports, loadingand uploading, distribution, customs procedures and integrated logisticsservices.
More than 70 percent of Vietnamese logistics companiesare small- and medium-sized, and only 5 to 7 percent of the human resources areproperly trained.
Local logistics firms handle only 25 percent of totalbusiness, leaving the rest of the market to foreign-owned companies.
The forum was organised by the Vietnam Economic Times,the Vietnam Logistics Association, the Ministry of Industry and Trade, theMinistry of Transport and the World Bank.-VNA
Speaking at the fourth annual Vietnam Logistics Forum,Deputy Minister Do Thang Hai said Vietnam, like many emerging Asian economies,had been following an export-led growth model through trade liberalisation andforeign direct investment.
The country, which has registered high economicgrowth, has had one of the highest export growth rates in Asia during the lastdecade, making it one of the most attractive investment destinations formanufacturing in Asia, he said.
Since its membership in World Trade Organisation(WTO), the country’s import-export value has increased 2.9 times, from 111.2billion USD in 2007 to 327.76 billion USD in 2015. Retail market revenue hasincreased by 20-25 percent annually.
To achieve these results, the logistics sector hasplayed an essential role in the country’s socio-economic development, Hai said.
The sector “plays a key role in linking activities ofthe global value chain, from supply, production and distribution to marketexpansion in many economic sectors,” he said.
Vietnam this year ranked 64th out of 160 countries inthe World Bank’s Logistics Performance Index, and fourth in the ASEAN region,after Singapore, Malaysia and Thailand.
With an annual growth of 16-20 percent in recent years,logistics has been among the sectors with the most stable growth.
However, the sector is facing challenges that limitthe country’s trade competitiveness, speakers at the forum said.
Most local logistics providers are at a disadvantagewhen it comes to offering modern logistics value-added services and Vietnamesemanufacturers have suffered from relatively low levels of logistics performanceand high logistics costs.
Ruth Banomyong of Thammasat University in Thailandsaid several estimates have shown that Vietnam’s logistics costs are muchhigher than those of China, Thailand and Malaysia.
“There is limited availability of reliable datarelated to logistics in Vietnam,” Banomyong said. “The private sector does nothave access to reliable logistics statistics to develop their respectivestrategic plans.”
Au Anh Tuan, deputy director of the Supervision andControl Department at the General Department of Customs, said “The legalframework and regulations covering the logistics sector remain difficult andthe lack of close coordination between relevant organisations has had anegative impact on the sector’s performance.”
Tran Bao Ngoc, director of the Transport Department,said that poor connectivity was a constraint to a multimodal transport system,caused by poor infrastructure and vehicles as well as a lack of moderninformation system in river ports, seaports and railway stations.
Tran Thanh Hai, deputy head of the Ministry ofIndustry and Trade’s Import Export Department, said a majority of logisticenterprises, mostly small- and medium-sized, had weak capacity and small marketshare.
In addition, competition from foreign logisticscompanies has put pressure on small- and medium-sized local service providerswho need to find niche segments to serve.
There is also currently no official authority in Vietnamwith overall responsibility for logistics.
Most speakers agreed that it is critical to improvethe current state of the logistics sector to sustain economic growth.
The Ministry of Industry and Trade has been assignedto develop a logistics national action plan, a challenging task as logistics isa sector that involves several government agencies.
The ministry is developing an action plan which willaddress logistics issues and provide guidance to the Government to formulate acomprehensive policy for boosting the logistics sector.
Private investment in infrastructure to developlogistics services should be stimulated through private-public partnership, saidDeputy Minister Hai.
Laws and regulations should facilitate the operationof the industry, while ensuring fair and transparent competition and be similarto international standards, he said.
Le Duy Hiep, Chairman of the Vietnam LogisticsAssociation, called for policy incentives in taxation, land use and bankcredit, and for investment in logistics infrastructure, such as airports andseaports, logistics centres, inland customs depots and IT systems.
Hiep said investment was also needed in e-commerce anddistribution and urban retail networks as well as in IT at the distribution andretail level.
To enable trade, he said that administrativeprocedures should be simplified to reduce costs and time for logisticsservices.
Hai from the Import Export Department, said logisticsis related to many sectors, including transport, industry and trade, planningand investment, customs, border defence, quarantining, banking, and educationand training.
Therefore, it is vital to establish a nationalcoordination committee for logistics to help identify the role and function ofeach ministry and promote consistent coordination among the agencies to dealwith logistics-related problems.
Some countries, such as Australia, Japan, Thailand andMalaysia, have implemented this institutional model, according to Hai.
In these countries, an inter-agency logisticscommittee is typically established at the national or provincial level. Thecommittee is supported by policies that strengthen the entire system and enableparticipation, consultation and public-private partnership, he said.
Also speaking at the event, Massimiliano Cali, senioreconomist at the World Bank, said the Vietnamese logistics sector should be reformedbased on policy lessons from Indonesia.
He recommended that the country establish a logisticsstatistical system to support strategic planning, evidence-based policy makingand monitoring of transport policies.
Vietnam has 1,300 logistics businesses, mainlyoperating in shipping and delivering, transport, warehouse, seaports, loadingand uploading, distribution, customs procedures and integrated logisticsservices.
More than 70 percent of Vietnamese logistics companiesare small- and medium-sized, and only 5 to 7 percent of the human resources areproperly trained.
Local logistics firms handle only 25 percent of totalbusiness, leaving the rest of the market to foreign-owned companies.
The forum was organised by the Vietnam Economic Times,the Vietnam Logistics Association, the Ministry of Industry and Trade, theMinistry of Transport and the World Bank.-VNA
VNA
