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Enhance logistics capacity to accelerate exports to the EU

10:40 | 14/10/2022

VCN - Vietnam-EU trade has grown positively after more than 2 years of implementing the Vietnam-EU Free Trade Agreement (EVFTA). However, in order to reduce the pressure on logistics costs and speed up exports to the EU, in the coming time, more attention should be paid to solutions to improve competitiveness for logistics service enterprises in particular and the logistics industry in general.

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Enhance logistics capacity to accelerate exports to the EU
Vietnam should develop logistics centres at major ports to ensure the appropriate number of ships in and out. Photo: Internet

EU logistics enterprises dominate

EU is one of the traditional markets of Vietnam. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), assessed that after the EVFTA took effect, the volume of goods traded between Vietnam and the EU increased a lot, even with items with a large volume of transportation such as textiles, footwear, and seafood.

Despite many difficulties in the past two years, thanks to the positive impact of the EVFTA Agreement, the two-way trade turnover between Vietnam and the EU has grown quite positively. In 2021, Vietnam's exports to the EU increased by 14% compared to 2020; In the first eight months of 2022, exports increased by over 20% year on year. Notably, the EVFTA is one of the new generation FTAs with a rather high rate of taking advantage of preferential Certificates of Origin (C/O). In 2021, the rate of taking advantage of preferential C/O was about 14% of export turnover while this rate from the beginning of the year until now is about 25%.

From another perspective, Mr Le Hoang Khanh Nhut, General Director of Da Nang Rubber Joint Stock Company, said that logistics costs are still a "headache" story. Recently, logistics comprises a massive cost in the value of products. In a difficult period like 2021, logistics costs increased dozens of times, hindering enterprises from balancing costs in production.

Mr Tran Thanh Hai further analyzed that the remote geographical distance in the Vietnam-EU trade relationship is also a potential risk. Logistics enterprises make an essential contribution to promoting bilateral trade activities. However, when analyzed carefully, it can be seen that in this relationship, EU logistics enterprises own the advantage of large-scale, long-term operating experience.

According to some experts in the logistics industry, the difference in capacity makes Vietnamese logistics enterprises suffer fierce competition with EU logistics enterprises, which are very strong and occupy a significant market share in the world logistics market. Which many strong EU logistics enterprises have business operations in Vietnam, such as DHL Group, Kuehne + Nagel, DB Schenker, Maersk...

Acknowledging the weakness of domestic logistics enterprise against "big players", Mr Mai Tran Thuat, Director of Supply Chain Solutions, Bee Logistics Group, shared: "Temporarily, we are agents or making cooperation with major firms as subcontractors to increase our presence for European businesses as well as to increase jobs."

Developing shipping lines, logistics centres

According to Mr Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), before the opportunity opened up from the EVFTA, the Vietnamese logistics industry faced competition from EU logistics enterprises and enterprises themselves. Vietnam will also compete with each other for sources of goods. "Opportunities exist, but whether they can be taken advantage of or not is another matter. Vietnamese logistics enterprises capital, advanced technology as well as skilled human resources, "said Mr Ngo Chung Khanh.

What makes Mr Hoang Khanh Nhut more concerned is the shortage of shipping lines which resulted in the heavy dependence and domination of foreign shipping lines. "Especially, amid China's blockade because of the Zero-Covid strategy, if it cannot manoeuvre empty containers, Vietnam will not be able to source ships, leading to uncontrollable costs proactively," Nhut said.

The representative of Da Nang Rubber Joint Stock Company suggested that Vietnam develop logistics centres at major ports to ensure the appropriate number of ships in and out. At the same time, Vietnam must also invest in shipping lines to keep the initiative and master the "game".

Mr Mai Tran Thuat shared that to improve capacity, enterprises themselves were also determined to have internal improvements. For example, businesses must invest money in technology, significantly advanced technologies and software to meet the requirements set by foreign logistics investing partners. Besides, enterprises also pay attention to facilities, infrastructure, and system of goods collection for foreign enterprises. In addition to the "self-advocacy" of enterprises, Mr Thuat hopes that the Government and the Ministry of Industry and Trade will have appropriate policies to support logistics enterprises shortly.

In order to support and promote the development of the logistics industry, from the perspective of state management agencies, Mr Tran Thanh Hai highly appreciated the efforts of the Government, ministries, branches and localities.

It is widely known that there have been such dramatic changes in infrastructure, especially transport infrastructure, through expanding roads and constructing new highways, seaports and airports. new flight…. Soon, the Ministry of Industry and Trade will develop a strategy for developing logistics services with a longer-term vision than the previous action plans; laying the foundation to support Vietnam's logistics enterprises, moving forward to enable import-export enterprises to reach out to the world market actively," said Mr Hai.

By Thanh Nguyen/ Thu Phuong