Reducing logistics costs: A solution for competitiveness and attracting import-export goods

Do Thanh Trung, Deputy Minister of Planning and Investment: Four key tasks to implement

The question is how Vietnamese logistics companies can adopt new technologies, leverage the country’s available potential, and seize external opportunities to compete effectively domestically and internationally, thus allowing Vietnam’s logistics sector to reach its full potential.

To achieve this, we believe that ministries, sectors, and localities, along with businesses, need to collaborate on implementing four key tasks and solutions:

First, regarding policy mechanisms, the government should continue refining mechanisms, policies, and legal frameworks for logistics services and support policies for logistics companies, while further streamlining administrative procedures.

Second, regarding infrastructure development, efforts should focus on improving logistics infrastructure, including transportation and logistics networks. This involves reviewing infrastructure plans to ensure system connectivity and alignment with strategic plans for industrial, agricultural, and export-import production, as well as with the socio-economic development strategy.

Third, regarding human resources development, there needs to be close coordination among central agencies, local authorities, universities, vocational schools, and companies to identify labor needs and ensure suitable education and training.

Fourth, regarding corporate competitiveness, logistics companies must enhance their competitiveness through digital transformation, technology investment, and building a high-quality workforce adept in new technologies. Additionally, they should pursue partnerships, joint ventures, and mergers and acquisitions to create stronger, more capable enterprises.

Bui Thien Thu, Director General of the Inland Waterway Department: Promoting regional connectivity

Our transportation infrastructure is gradually being completed, encompassing diverse logistics support networks, including waterways, 37 seaports, about 595,000 km of roads (including expressways and railways), and over 1,000 vessels for both nearshore and deep-sea shipping.

Our inland waterway network spans over 17,000 km, effectively supporting socio-economic activities alongside other transport infrastructure.

Thanks to infrastructure development, logistics costs have been steadily decreasing, from previously over 20% of GDP to around 16.8-17% today.

To accelerate logistics development, inter-industry and inter-regional connectivity is crucial, as well as a coordinating leader to drive transformation in logistics thinking, awareness, and actions. Ministries like the Ministry of Industry and Trade and the Ministry of Planning and Investment have done commendable work, but stronger collaboration could drive further growth in logistics.

Yoshihiro Wake, Director of International Market Development, ABeam Consulting: Improving delivery times

In Japan, logistics networks are highly developed, enabling next-day deliveries. However, delivery times remain a significant challenge in Vietnam. Technology adoption and digital transformation are essential to improve delivery times and reduce costs.

When discussing logistics centers, it’s not only about sustainability but also the need for efficiency, so customers receive goods as quickly and conveniently as possible, which is essential. "We have developed key applications in Vietnam aimed at optimizing transportation strategies, enabling customers to constantly adapt and refine their operations to suit the environment."

To address the challenges posed by the distributed nature of logistics centers and the rapidly evolving business environment, ABeam Consulting has developed a digital twin that helps clients analyze data and determine the best methods for reducing operational costs. This digital twin constantly monitors and adapts to meet changing market conditions, which is especially relevant in Vietnam's fast-paced environment.

Cao Hong Phong, Deputy CEO of Gemalink: Policy support needed for businesses

Developing smart, sustainable ports is a long-term process that requires businesses to have a clear strategy, roadmap, and appropriate investment. Additionally, government support, assistance from relevant authorities, and cooperation from stakeholders are essential to achieving this goal.

Businesses should focus on creating a roadmap that aligns with their current conditions, resources, and sustainable development goals. This is crucial. From the regulatory perspective, companies need support and facilitation from the government and related agencies, especially through policy assistance. This includes reducing barriers, simplifying procedures, lowering fees, providing tax incentives, and offering financial support, such as concessional loans and financial aid packages for green investments. Additionally, a complete legal framework promoting green investment would foster a stable business environment.

Tran Thanh Hai, Deputy Director of the Import and Export Department (MoIT): Infrastructure connectivity and cost reduction

The key to reducing logistics costs is to accelerate the connectivity of transportation infrastructure and invest in developing logistics centers, dry ports, and multimodal transportation.

Infrastructure is a critical factor for the development of the sector. Many major projects have been built; for example, Vietnam now has a privately-invested airport. Vietnam also has three seaports in the world's top 50 largest ports, several new expressways, and upcoming plans for high-speed rail investment.

Alongside transportation infrastructure, warehousing has also advanced. Recently, the number of warehouses has significantly increased, now equipped with modern, automated technology and with higher handling capacity. This is our "hard infrastructure." Soft infrastructure, such as information technology, human resources, and the legal environment, is also being developed. Together, these elements form a comprehensive support system that enables logistics companies to conduct their operations effectively.