Globally, strong globalization is taking place alongside the development of market economies and the era of Industry 4.0 technology. Nowadays, people are not only discussing the natural law of "universal gravitation" but also frequently mentioning the artificial law of "universal connectivity" (Internet of Things) due to advancements in science and digital technology.
With the changing landscape both domestically and globally, two key focal points have emerged in the economy: standards and supply chain of products. The logistics industry, as part of supply chain management, involves the efficient flow of goods, services, and relevant information from origin to destination based on customer demand. With the development of digital technology, logistics has progressively become a central aspect of the supply chain. Logistics not only incurs substantial investment costs and exerts a significant impact on product prices – averaging about 5% of the total national GDP, 20% of the final price of goods – but also plays a decisive role in the quality of international trade. Regardless of distance, customers worldwide desire their products to be delivered quickly and flawlessly. The adoption of digital transformation in logistics has been relatively slower compared to other industries in the past decades. However, over the last five years, this industry has witnessed an increasing number of enterprises closely collaborating with technology companies as this field opens up a market worth hundreds of billions of USD. According to statistics, around 2.3 trillion USD worldwide will be invested in technology and services enabling digitization by 2023.
Vietnam's economy is open and relies heavily on international trade, with bilateral economic relationships established with over 230 countries and territories. Vietnam has signed 16 free trade agreements (FTAs) with 60 economies. In general, in 2021, the country's total import and export turnover reached 670 billion USD, nearly double the GDP. Vietnam holds a strategically important position in the region, particularly in the South China Sea – a crucial maritime route connecting the Pacific and Indian Oceans, Europe and Asia, and the Middle East and Asia. This route is considered the world's second busiest international transportation route. The South China Sea holds immense strategic importance, with over 90% of global trade conducted by sea and 45% of that trade passing through the region, with a total trade value of nearly 5.5 trillion USD annually. Many countries and territories in East Asia heavily rely on this maritime route, including Japan, South Korea, Taiwan, Singapore, and China.
The 13th National Party Congress has identified the development of a comprehensive infrastructure system as one of the three strategic breakthroughs for the country's development. In terms of maritime infrastructure, a synchronized system of seaports is being invested in, with a capacity of about 570 million tons per year. The two international gateway ports, Cai Mep-Thi Vai and Lach Huyen, have the capability to handle large vessels ranging from 130,000 to 200,000 DWT heading to the West Coast of the United States, Canada, and Europe. An efficient system of support dry ports is also being developed to complement seaport operations and logistics services. In terms of aviation, important airports have been upgraded, including Noi Bai, Tan Son Nhat, and Da Nang, while new ones like Phu Quoc and Van Don have been built, aiming for a total airport capacity of about 90 million passengers per year.
However, the application of digital technology in logistics, specifically in Vietnamese enterprises, still faces numerous limitations, primarily in terms of artificial intelligence (AI) intelligence. Statistically, while Singapore invested 68 USD per capita in AI solution companies, China invested 21 USD, and the US invested 155 USD in 2019, Vietnam, along with Thailand, Malaysia, Indonesia, and the Philippines, all fell below 1 USD. This poses challenges for Vietnam to invest more vigorously to harness the digital foundation for production and distribution of goods, promoting the economic growth of the country.
Furthermore, digital transformation also carries significant risks. A recent survey with senior executives revealed that the risk of digital transformation is their number one concern in 2019, as about 70% of digital initiatives did not achieve their goals. Of the 1.3 trillion USD spent on digital transformation in 2022, an estimated 900 billion USD will be wasted. Therefore, for successful application of digital transformation in the logistics industry, businesses need to elevate their awareness to leverage digitization processes, enhance efficiency, build trust among trade partners and stakeholders, optimize supply chain routing, manage transportation vehicles effectively, make intelligent decisions through cognitive computing and AI support.
In reality, digital technology will help the logistics sector overcome challenges by optimizing processes, streamlining communication from start to finish, managing supply chains, improving customer experience, and controlling costs. According to recent studies, digital technology in general and AI in particular could elevate the ASEAN region's economy, including Vietnam, to a higher level. If ASEAN members catch up with the pace of AI application, they could collectively add nearly 1 trillion USD to the region's GDP by 2030 (with Vietnam contributing over 100 billion USD).
The application of digital technology in logistics businesses represents a highly scientific breakthrough process, demanding pioneering research and proposing suitable economic-social planning models for each region and natural environment. It requires a suitable time model to ensure success. The Logiinds Corporation (a subsidiary of the CT Group) serves as a prominent example. In their 2023 plan, Logiinds focuses on building modern external warehouses at Tan Son Nhat and Da Nang airports. Logiinds' digital technology application strategy encompasses four phases: Initiating digital transformation; transforming the digital business model; charting new business directions; and ultimately restructuring the business framework. This phase marks the peak of the digital transformation process, establishing an all-encompassing enterprise structure system through long-term digital transformation.
To build a digital business environment that provides tangible benefits and supports startup enterprises as well as efficient digital business transformation, macroeconomic management agencies should establish five specific macro policies:
National Logistics Standard Policy: Technical standards take precedence in technology, making it necessary to formulate a comprehensive national logistics standard policy for Vietnam that aligns with the digital transformation trends and rules of developed industrial nations. Perfect integration of software and hardware standards of logistics and transportation systems is essential to create a synergistic strength.
Digital Skills Training: Any technological solution must consider its impact on the workforce and prioritize human capital. There is a need to establish a common commitment to train digital skills for the workforce.
Economic-Social Capital Clusters: Logistics forms the base of the economic pyramid and is essential not only for all supply chain activities but also for broader economic activities such as tourism, commerce, and investment. However, logistics is one of the most resource-intensive areas requiring substantial investment. Along with the transportation system, the logistics sector, with the application of digital technology, becomes a critical resource for the national product resources and serves as a foundation that tightly connects with the four remaining primary resources: natural resources, human resources, finance, and society. Only by closely linking these resources can the success of the developing logistics sector be ensured, facilitating the initiation, breakthrough, and dissemination of the country's second economic innovation.
International Cooperation in Developing Logistics Centers: The supply chain is a global business area currently undergoing transformation. Therefore, policies that promote international cooperation in developing logistics centers are essential, particularly in critical economic areas like the Mekong Delta, the Red River Delta, and the central region. Developing economic integration within ASEAN is important, as it will be central to negotiating international trade and building a national supply chain strategy, ensuring Vietnam's pivotal role in the region.
Cybersecurity: While digital transformation brings numerous benefits, it also carries inherent risks. Therefore, enhancing collaboration and improving capabilities in the field of cybersecurity is crucial when developing and implementing technology application strategies.
In conjunction with the awareness and efforts of the business community in the digital transformation domain, the effective establishment and implementation of relevant government policies will position Vietnam's logistics sector as increasingly important. It will not only contribute to the socio-economic development resources of the country but also play a role in the transition of the regional and global economy.
Cre: Báo Nhân Dân
