Logistics Sector: United to Complete

According to the Vietnam Freight Forwarders Association (VIFFAS), Vietnam has nearly 900 logistics enterprises, 80 per cent of which are private firms. However, Vietnamese enterprises have no representative offices in foreign countries. Therefore, it is very difficult for Vietnamese firms to win logistics service bids in foreign countries.

 

Nguyen Tham, vice chairman of VIFFAS said that Vietnamese logistics firms are young and small in comparison with the rest of the world. The firms have mainly operated over the five past years, with average registered capital of around VND15 billion (US$900,000) each. Meanwhile, to receive a multimodal order, an enterprise must have assets for mortgage or bank guarantee worth US$120,000 to provide the service and the figure will increase by US$150,000 for order forms issued in the US, under US shipping regulations.

 

Vietnam now has no units specialising in logistics training. Workers in Vietnamese logistics enterprises learned from foreign countries, or by reading books or attending training courses sponsored by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). The training courses mainly benefit staff in the public sector.

Besides, most shipping contracts have purchasing terms on a CIF basis and selling terms on an FOB basis, so allowing transportation conditions to languish limits the opportunities available for domestic logistics providers, which contributes to reducing the country’s export revenue.

 

According to Nguyen Thanh Bien, Deputy Minister of Industry and Trade, positive changes in the logistics sector in the year since joining the WTO have contributed to attracting foreign investment into Vietnam. The increase in projects and manufacturing factories offers the Vietnamese logistics sector many chances to develop and expand their services. 

 

Some Vietnamese enterprises have supplied logistics services for neighbouring Laos and Cambodia, and cooperated with foreign partners to ship commodities to China, Laos, and Cambodia. These exported services bring foreign currencies to Vietnamese firms.

 

After joining the WTO, the Vietnamese logistics sector has started cooperating and uniting with foreign partners, especially those with highly developed logistics services. Vietnam has amended its law systems in accordance with WTO principles, making policies more clear and open. According to a project of the Industry and Trade Ministry, Vietnam’s export revenue will increase three times from the current figure by 2015, of which logistics export revenue will account for 15 per cent, a significant figure.    

There are 30 world leading logistics enterprises in Vietnam. Therefore, domestic firms need to cooperate closely to compete with foreign contenders. Especially, VIFFAS, which links Vietnamese firms, both its members and non-member companies, must draw the participation of more firms to assemble all of Vietnam’s logistics enterprises into a cohesive logistics organization.       

The Vietnamese logistics sector also needs to build domestic specialized training centres, in addition to partnering with foreign logistics training centres, to update knowledge and techniques in the sector, helping firms meet the requirements to offer the service on the international market.