Logistics Industry Outlines New Strategies to Catch Bigger Opportunities
Jun. 27 – The Vietnamese logistics market is still at a very early stage of development, so there are still various difficulties in this area. Nonetheless, the logistics industry is a huge contributor to the country’s gross domestic product. To increase development, logistic companies in the country are looking at new strategies and try to catch bigger opportunities in 2011.
The World Bank ranked Vietnam alongside China, India, Thailand, Uganda, the Philippines and South Africa as the fastest growing developing nations in terms of economy.
In the Logistics Performance Index, Vietnam’s general score was 2.96 points and its infrastructure score was the lowest with 2.56 points (on a scale 0-5 points). But still with this performance the logistics industry is responsible for 20 percent of GDP. It can be concluded that Vietnam has improved in warehousing, delivery, transportation and distribution to help solve the transport problems.
According to Mr. Nguyen Hong Truong, Deputy Minister of Transport, there is one big problem in Vietnam. Vietnam has about 1,200 companies working in the logistics area, but most of them are small scale. These small companies can only handle about 20 percent of the market demand. Meanwhile, foreign companies which set up joint ventures – which account for 20 percent of the companies in the market – are responsible for 80 percent of the Vietnamese market share. It’s attributed to the better qualification of foreign businesses. Because of that, Mr. Truong hopes for a boost in the country’s logistics industry from 2014 on, when its allowed to set up wholly foreign-invested entities in Vietnam in accordance with Vietnam’s commitments to the World Trade Organization (WTO).
To develop the industry to a sustainable level, it’s important to have highly skilled and professional labor force. Also, the small companies work together to keep the pace of the foreign competitors or they should have joint ventures to acquire technology, accumulate capacity, capital and experience.
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