HANOI: The logistics industry has made big strides in recent times, significantly contributing to the country’s economic growth and generating a good number of jobs.
In the World Bank ratings, Vietnam ranks 64th out of 160 countries in terms of logistics development and fourth in South-East Asia after Singapore, Malaysia and Thailand.
It was also among the top 10 in the 2023 Emerging Markets Logistics Index compiled by Agility, one of the world’s leading freight forwarding and contract logistics providers.
Vietnam’s logistics costs are equivalent to 16.8% to 17% of its gross domestic product, much higher than the global average of 10.6%.
This has weakened the competitiveness of its goods, chairman of the Vietnam Logistics Association Le Duy Hiep said.
He pointed to limitations in infrastructure, seaport planning and connectivity between various means of transport.
The World Bank also said Vietnam’s logistics industry still showed shortcomings in terms of capacity and the pace of digital transformation.
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Although the government has pushed ahead with a national logistics development strategy for 2035 that integrates digital transformation, it requires greater efforts to boost the sector’s digitisation.
The railway network has yet to be fully tapped to serve trade with China and Asean members, despite its great potential.
Hiep suggested offering more incentives to help logistics firms bolster their competitiveness.
Deputy Minister of Planning and Investment Tran Duy Dong said the number of logistics businesses increased rapidly to over 3,000.
The government is trying to improve the investment environment, increase public spending, stimulate demand and remove difficulties faced by manufacturers and exporters, he said.
Infrastructure is a key factor in the development of the logistics industry.
In the past two years, many important highways and regional roads have been built.
Vietnam’s goal is to have 3,000km of highways by 2025 and 5,000km by 2030, besides coastal roads, ports and airports.
“These are necessary conditions for Vietnam to develop the logistics industry,” Dong said.
“To achieve the goal of cutting logistics costs, improving the business environment and enhancing the competitiveness of the logistics industry amid international economic integration and the fourth industrial revolution, we still have much work to do.”
With regards to the legal framework for the industry, specific policies expanding on guidelines have not been announced or there are overlaps, he said.
Transport and logistics infrastructure are not synchronised to create transport corridors, though the need for high-quality transshipments of goods is growing, he added.
Vietnam also lacks centralised logistics areas in locations connected with ports, airports, national highways or production facilities, a significant hurdle to the development of the logistics industry, he said.
“The current question is how to take advantage of the opportunity to turn logistics into an important economic sector, both meeting domestic needs and being internationally competitive, while keeping up with development trends.
“The global trend is green logistics to achieve sustainable development goals.”
Industry and Trade Minister Nguyen Hong Dien said to develop the logistics industry rapidly and efficiently, the ministry would coordinate with other agencies, local authorities, and businesses to draft a strategy until 2035.
It would also coordinate with the Transport Ministry and various localities to ensure coordination between traffic and logistics centres across the country, he said.
It would help provinces and cities, industry associations and businesses reduce congestion at ports and border gates, he added.
It will also promote links between logistics and production businesses and the role of the Vietnam Logistics Forum.
Dong said the government would improve the logistics infrastructure, review plans and ensure the synchronisation of infrastructure with transport services. — Viet Nam News/ANN