NEW MEASURES NEEDED TO DEVELOP LOGISTICS SECTOR

It is necessary to take new measures to improve the competitiveness of local logistics companies, said Minister of Industry and Trade Tran Tuan Anh at the Vietnam Logistics Forum 2017 in Hanoi City last Friday.

The forum “Improvement of Competitiveness and Development of Vietnam’s Logistics Services” was held by the Ministries of Transport and Industry-Trade, the World Bank (WB), and the Vietnam Logistics Association (VLA), according to media reports.

Minister of Industry and Trade Tran Tuan Anh said logistics should be regarded as an infrastructure service sector and that the industry is struggling with many bottlenecks, such as poor coordination among relevant sectors; weak transport, trade, and information technology(IT) infrastructure; and a shortage of skilled labor.
Minister Anh urged competent agencies to adopt measures to develop transport and IT infrastructure, and logistics centers.

He told ministries and agencies to seek ways to develop high-skilled labor in the logistics sector so that it can adapt well in the economic integration process.

VLA chairman Le Huy Hiep saidthe domestic logistics sector has an annual growth rate of 15-16%. He cited the WB’s Logistics Performance Index as indicating that Vietnam was ranked 64th among 160 countries, and took the fourth place among ASEAN countries behind Singapore, Malaysia and Thailand last year.

More than 3,000 local companies, 70% of them small and medium enterprises,are active in the sector.

Hiep said the sector is facing a lot of challenges, and performing poorly, especially on a global scale. A few companies have their representative offices abroad but mainly in Myanmar and Cambodia.

Local enterprises provide some services of good quality such as warehousing, inspection and container services.

Hiep also noted logistics cost accounts for 20.8% of gross domestic product (GDP), totaling a whopping US$41.26 billion.

Local logistics cost is higher than in regional nations like Cambodia, Myanmar, and Thailand.

Pham Minh Duc, a WB economist, said the Government should furtherslash administrative and logistics costs, which are now higher than the ASEANaverage.

He suggested the Government simplify customs regulations, improve infrastructure and logistics quality, boost the competitiveness of the sector, strengthen inter-sectoral collaboration, and cooperate with the private sector.

The WB is willing to support Vietnam to solve these issues to create favorable conditions for improving trade, logistics, and competitiveness, Duc stressed.

Vietnam has so many rules, leading to higher costs than in other countries, he said, adding administrative procedures should be streamlined.

Earlier, the Prime Minister approvedan action plan for developingthe logistics sector and improvingitscompetitiveness until 2025.

The plan aims to raise the sector’s contribution to GDP to 8-10%, and its growth rate to 15-20%, and reduce logistics cost to 16-20% of GDP by 2025.

“This is the first time our country has come up with a comprehensive logistics action plan,” said Hiep of VLA.

Source: The Saigon Times