Remove the "bottlenecks" hindering the development of the logistics industry

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A large-scale logistics center is expected to be built at Cat Lai port to remove bottlenecks for logistics. Photo: T.H

That is the information given at the Seminar "Customs accompanies enterprises to develop logistics activities to improve the competitiveness of import and export goods" held by Customs Magazine in the afternoon of August 10 in Ho Chi Minh City.

Logistics is identified as an important service industry in the overall structure of the national economy, playing the role of supporting, connecting and promoting socio-economic development of the whole country as well as each locality and enhancing the competitiveness of the economy

Over the past years, Vietnam's logistics industry has made significant progress with an average speed of 14 - 16%/year, with a scale of 40 - 42 billion USD/year. The number of businesses and the quality of logistics service business is increasing, making a significant contribution to the peak of the import and export value of 732.5 billion USD in 2022 – and affirming Vietnam's important position on the international trade map.

According to Saigon Newport Corporation, although the system of seaports and airports has been invested and expanded, it has not yet met the growth needs of the logistics industry, leading to overcrowding and delays in handling procedures.

According to a report of the Ministry of Transport, about 20% of seaports in Vietnam are in accordance to the logistics industry requirement, while more than 50% of seaports suffer from overload and lack of facilities. About 20% of the roads in Vietnam are modernly built and matching with the requirements of the logistics industry, while more than 50% of the roads suffer from poor quality and are not safe for transportation.

Currently, about 30% of airports in Vietnam meet the requirements of the logistics industry, while more than 40% of airports suffer from overload and lack of logistics facilities. Warehouse facilities are not enough in number and have not been fully invested in facilities, lowering storing capacity and managing goods. In addition, only about 10% of warehouse facilities are well- equipped, while more than 50% of warehouse facilities suffer from overload and lack of facilities. Warehousing facilities in Vietnam have not met the standards of facilities and fire safety, making it difficult to store and manage goods.

Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade) pointed out the weaknesses that hinder the development of the logistics industry. Specifically, in recent years, although the logistics service industry has had very good growth, there are still weaknesses that need to be improved. Firstly, logistics infrastructure reveals many backwards and has not been synchronized in spite of the Government investment in many new airports and new ports.

Secondly, the business capacity is one key point to be mentioned. According to the General Statistics Office, Vietnam has about 43-45 thousand enterprises operating in the field of logistics but the majorities are small and medium ones with limited capacity to provide services within the border of Vietnam. Although Vietnamese goods have been exported to more than 200 markets, the reach of businesses can only go to neighboring countries in the region, it is impossible to go further like Europe and the US.

The third weakness is about human resources. The logistics service industry in Vietnam is lacking professional human resources, especially the middle management team. Fourth is about technology. Although some large enterprises in the industry have pioneered the application of new technologies, in general, the application of technology in the logistics service industry in Vietnam is not clear enough.

These above factors have made logistics costs in Vietnam higher than many countries in the world (the world is currently only about 10.6% and Vietnam is about 16.8%). This limits the competitiveness and investment attractiveness of the economy. Therefore, reducing logistics costs becomes an urgent requirement of the economy...

At the seminar, representatives of many logistics businesses added that businesses are often forced by foreign shipping companies to charge high prices but have no solution. In addition, overlap specialized inspection procedures have prolonged customs clearance time and caused additional fees for enterprises.

Therefore, in order to improve the export capacity of enterprises, it is necessary to reduce this cost to at least equal to the global cost. To be able to do this, many businesses believe that relevant authorities need to accelerate investment in the construction of modern airports and warehouse facilities to improve traffic capacity and merchandise management. At the same time, it is high time to increase investment in transport routes, including roads, railways and waterways to improve freight transport capacity. In addition, it is necessary to create a favorable business environment for enterprises operating in the logistics sector, including reducing cumbersome legal regulations, reducing operating costs, and facilitating small and medium-sized to enter the industry.