Opportunities and Interwoven Challenges
Deputy Minister of Industry and Trade Do Thang Hai mentioned that a report on the Logistics Performance Index (LPI) for emerging markets in 2022, recently published by Agility, ranked Vietnam 11th among the top 50 emerging logistics markets and 4th in Southeast Asia. The development of the logistics sector is closely linked to significant achievements in economic development, thanks to the government's efforts to open up and integrate into the international economy, actively participate in comprehensive and deep Free Trade Agreements (FTAs), which bring many opportunities for the Vietnamese business community as a whole and logistics companies in particular.
Logistics holds the promise of continued rapid growth in 2023 Logistics has the potential for continued rapid growth in 2023. Photo: TL Logistics is one of the fastest-growing and most stable economic sectors, with an average annual growth rate of 14-16%, contributing 4-5% to GDP. Alongside these advantages, Deputy Minister Do Thang Hai also shared that Vietnamese businesses engaged in global trade, particularly with Europe and the Americas, continue to face many difficulties and challenges. These include limited infrastructure, lack of synchronization, especially in transportation and logistics infrastructure such as warehouses and logistics centers. Logistics companies also face issues such as information gaps, insufficient collaboration, outdated technology, etc. These are significant limitations that keep Vietnam's logistics costs very high, posing a burden on businesses.
Sharing a similar viewpoint, Ms. Vo Thi Phuong Lan, Vice President of the Ho Chi Minh City Logistics Association (HLA), mentioned that the average logistics cost in Vietnam is currently around 16.8-17% of the value of goods. However, in practice, some businesses end up paying as much as 20-25% for these costs.
To reduce logistics costs for businesses, Ms. Vo Thi Phuong Lan suggested that import-export businesses should change their terms of sale from FOB to purchasing goods CIF to have more control over using suitable transport schedules, finding reliable competitive suppliers to save shipping costs, and mitigate risks during transportation.
Making Vietnam a significant logistics hub in the region
Assessing the development of the logistics sector in 2023, Mr. Tran Thanh Hai, Deputy Head of the Import-Export Department under the Ministry of Industry and Trade, said that the government and relevant ministries and sectors are particularly concerned with developing logistics to make Vietnam a significant logistics hub in the region. Deputy Prime Minister Le Minh Khai recently signed Resolution No. 163/NQ-CP on December 16, 2022, to accelerate the synchronous implementation of key tasks and solutions to enhance the competitiveness and development of Vietnam's logistics services. Currently, many localities have developed plans and schemes for logistics development.
Resolution No. 163/NQ-CP emphasizes that the viewpoint is to develop logistics services into a high-value-added sector, linking logistics services with the development of production, domestic and international trade, and the development of transportation and information technology infrastructure. It aims to develop the logistics service market, focusing on enhancing the competitive capacity of logistics service providers, maximizing the geographical advantages to make Vietnam a significant logistics hub in the region, and developing logistics that are closely linked with sustainable supply chains, improving the quality of the workforce, promoting digital transformation, and technology application.
In the resolution, the Ministry of Finance is tasked with reviewing and resolving issues related to tax policies, fees, charges, and service prices to create favorable conditions for logistics service providers. It is also responsible for coordinating with relevant ministries and sectors to promote trade facilitation, customs procedure reform, reduce and simplify specialized inspection procedures, standardize documents, and implement commitments under the WTO Trade Facilitation Agreement.
The Ministry of Industry and Trade is supervising various ministries, sectors, localities, and associations to implement synchronized, effective solutions, mechanisms, and policies to enhance the competitiveness and develop Vietnam's logistics services according to the Action Plan for enhancing the competitiveness and development of Vietnam's logistics services by 2025 under Decision No. 200/QD-TTg and Decision No. 221/QD-TTg.
"The next advantage is that Vietnam's manufacturing and trading activities are recovering and increasing significantly. On December 15, it was recorded that Vietnam's total import-export turnover reached a record high of $700 billion USD for the first time. Just five years ago, in 2017, Vietnam reached only $400 billion USD... This is a significant advantage because the volume of goods produced, circulated domestically, and traded with international commerce is increasing, which will lead to increased demand for logistics services," emphasized Mr. Tran Thanh Hai.
To boost logistics activities, the Ministry of Transport has issued Decision No. 1254/QD-BGTVT approving the Scheme for Developing Vietnam's Seaborne Transportation Fleet. With this scheme, the Ministry of Transport aims to increase the market share of goods transported to and from Vietnamese seaports by Vietnamese maritime fleets to 10% by 2026 and 20% by 2030.
Cre: thoibaotaichinhvietnam.vn
