Increasing competitiveness for Vietnamese goods from logistics

Increasing competitiveness for Vietnamese goods from logistics

The high cost of logistics (supply chain management) is one of the reasons why it is difficult for domestic enterprises to improve the competitiveness of Vietnamese goods.

Therefore, investing in logistics is considered to be the most important task in order to contribute to bringing Vietnamese goods to the world market.

 

High logistics costs are one of the major barriers affecting the competitiveness of the Vietnam economy. 

 

As an enterprise specializing in the export and import of wooden furniture, Mr. Nguyen Quoc Trinh, Director of Furniture Export and Import Co., Ltd. (Hoang Mai district) shares, costs such as customs procedures; Inland transport; Freight and surcharges are collected by shipping lines at their own discretion ... for a very large export shipment. This is one of the reasons why Vietnamese goods are difficult to compete with similar products and the same quality of regional countries.

 

From the perspective of the distributor, Mr. Shiotani Yuichiro, General Director of AEON Topvalu Vietnam Co., Ltd. said, looking at the mango shelves of AEON supermarket system in Japan, Vietnam's mango price is as high as Mexican mangoes, but more expensive than Thai and Filipino mangoes, although sweetly equivalent. Meanwhile, Pakistani mangoes are also exported to Japan and are cheaper than Vietnam. One of the reasons for the high price of Vietnamese mangoes is the higher logistics costs than other countries.

 

High logistics costs not only affect the competitiveness of goods but also become an obstacle for businesses to enter new markets. Nguyen Tien Vuong, Deputy General Director of Hanoi Trade Corporation (Hapro), said that the high price of products made it difficult for many Vietnamese agricultural products to compete with Thai goods, due in part to shipping costs. higher than this one.

 

Or as the Textile - industry has contributed a large export turnover but is also suffering the burden of logistics costs the most. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, said Vietnam's logistics costs for the textile industry are now higher than in other countries in the region. Specifically, logistics costs of Vietnam are 6% higher than Thailand, 7% higher than China, Malaysia 12% and 3 times higher than Singapore. This has reduced the competitiveness of textile products compared to other countries in the region even though Vietnam is considered a low labor cost country.

 

Need specialization of logistics services

 

Although there have been many improvements in logistics infrastructure, according to Mr. Tran Thanh Hai, Deputy Director of Import and Export Department (Ministry of Industry and Trade), there is a lack of connection between means and forms of transportation, especially between road, sea, and rail. Besides, most logistics enterprises are small and medium, lack of capital, lack of experience, management skills, so they lose out in the competition. Units providing different stages of logistics chains such as warehousing and transport services, etc., which do not have a chain link, are also weak points of Vietnamese enterprises compared to foreign ones.

 

In addition, the logistics industry also faces a series of other difficulties. For example, Hanoi now has enough conditions to develop into a logistics service center of the country. However, the barriers of infrastructure are not corresponding; the legal system governing logistics activities is still overlapping and unstable; unprofessional human resources ... are slowing down the development of the city's logistics service industry.

 

In particular, Vietnamese logistics companies only operate within the domestic or a few ASEAN countries, while the scope of activities of many foreign companies such as APL Logistics (a subsidiary of Kintetsu World Express, Inc., - a freight company based in Japan) is close to 100 countries. This is one of the obstacles that make it difficult for Vietnamese enterprises to provide services along the value chain.

 

Proposing ideas to improve the competitiveness of this service sector, the Minister of Industry and Trade Tran Tuan Anh suggested that ministries, branches, and localities should strongly implement the Prime Minister's Decision 200 / QD-TTg. Government (February 14, 2017) on approving the action plan to improve Vietnam's competitiveness and development of logistics services by 2025.

 

According to the Minister, the scale of export and import at the level of over 500 billion USD of our country must be considered to see a big "pie" of logistics. Therefore, the development of logistics services needs to aim towards the dual goal of perfecting the mechanism for development and urgently cutting costs and improving competitiveness. In addition, when implementing the Planning Law, attention must be paid to the connection of transport infrastructure with logistics centers in order to have a comprehensive plan in developing this field.

 

Mr. Nguyen Manh Hung, Director of Hung Cuong Co., Ltd. (a transportation enterprise) recommends that in order to improve competitiveness and develop logistics services, the following solutions should be considered: Human resource development, infrastructure, and policy institutions. In particular, it is necessary to promote links with foreign investors, logistics professionals to provide businesses with management software, management processes ...

 

According to Mr. Nguyen Tuong, Deputy General Secretary of Vietnam Logistics Business Association, in addition to policy and infrastructure issues, it is necessary to take the active participation of relevant levels and sectors, especially companies. Providing logistics services. In addition, it is necessary to improve water and road connectivity as well as make good use of railways, develop airways, build irradiation and inspection centers in key agricultural areas. Along with that, changing the mindset to make a wholesale market by the center of agricultural logistics, technology applications, agricultural logistics trading floor ... is also very important.

 

Logistics is an important contributor to the economy. Therefore, specialization of this service is an indispensable need, to ensure the competitiveness of Vietnamese goods in the global market.

 

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