CATEGORIES

© Copyright 2004; Hanoitimes - Economic and Urban Newspaper;

The tribune of Hanoi People’s Committee

Publication Permit: 29/GP-CBC

Editor - in - Chief: Nguyen Thanh Loi

Managing Editor: Ta Thu Giang

Email : thugiang@hanoitimes.vn

Head Office: 21 Huynh Thuc Khang Street, Dong Da District, Hanoi

Branch Office: 221 Tran Phu Street, Ha Dong District, Hanoi

WORDS ON THE STREET 70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Trade - Service
Logistics is new growth engine for Vietnam's sustainable development: experts
Hai Yen 15:14, 2018/08/22
"As a market economy, there is no other option for sustainable development than a high competitiveness," stated the head of the Institute for Brand and Competitiveness Strategy (BCSI).
Vietnam's competitiveness in global market remains low, which requires the logistics sector to step up its game and become the new growth engine for the country's sustainable development, according to the BCSI.
 
Speakers at the conference. Source: Hai Yen.
Speakers at the conference. Source: Hai Yen.
High logistics cost leads to low competitiveness of Vietnam's exports and a low return for the economy, said Nguyen Van Nam, president of the BCSI at a conference on August 21. "Vietnam's logistics cost is two or three times higher than other countries with similar economic scale."

In the process of economic integration, Vietnam has trade relations with 180 countries and attract investments from over 100 countries and territories. However, Vietnamese companies do not create much value addition in the supply chain, as most of them only participate in the lower end of the global value chain, Nam added. 

About 21% of small and medium enterprises (SMEs) in Vietnam joined the global supply chain while the percentages in Thailand and Malaysia are 30% and 46%, respectively. Thus, Vietnamese enterprises are less likely to benefit from the spillover effects of FDI firms through the technology transfer, know-how and management skills, he added.

The challenge for Vietnam in the coming time would be to form and optimize modern supply chain, reducing costs and enhancing competitiveness for enterprises and economy as a whole, Nam stressed. 

"As a market economy, there is no other option for sustainable development than a high competitiveness," Nam continued.

Logistics as competitive advantage

Vo Tri Thanh, director of BCSI, stated 47% of Vietnamese enterprises reported profit by the end of 2016, citing high logistics costs as one of the main reasons.

Thanh pointed to three reasons behind local companies' low efficiency in supply chain management. Firstly, companies are not fully aware of the supply chain and related legal frameworks. 

Secondly, the lack of expertise among enterprises and the drive to optimize their supply chains. 

Thirdly, government agencies should play more active role in reducing the logistics costs, which is currently making up nearly 16% of GDP. 

"Enterprises should understand that logistics is not purely of reducing production cost, but represent their competitive advantage," Thanh added.

Sharing Thanh's view, Jay Fortenberry, lecturer at Portland State University and chairman of the Fortenberry Group, said ultimately, the goal of the supply chain is to produce a competitive advantage to the business, which can only be done by providing the best possible service to customers.

Daniel Wong, Fortenberry's colleague at Portland State University, said he saw inadequate logistics infrastructure as the biggest risk for Vietnam to become ideal destination for investors and facilitate its role in global supply chain. 

"Improvements in roads, sea and airports are what Vietnam should focus on," Wong said.

Wong also added that Vietnam should address the issue of lacking qualified human resources in logistics sector, which is considered a long-term solution for Vietnam's logistics development. 
Comments
Other news
18:45, 2024/11/28
Vietnam, Hesse (Germany) promote high-tech cooperation
Bilateral trade between Vietnam and Hesse has reached around EUR1 billion (US$1.05 billion) annually, accounting for one-tenth of total trade between Vietnam and Germany.
15:34, 2024/11/27
Big discounts on offer at Hanoi's November Promotion Festival
The event is part of the Hanoi Concentrated Promotion Program 2024, held in May, July, and November, attracting up to 2,000 businesses.
17:23, 2024/11/26
Hanoi unveils 150 most popular Vietnamese products and services for 2024
The "Most Popular Vietnamese Products" voting program is part of the city's broader efforts to encourage the consumption of local goods.
16:50, 2024/11/23
Hanoi hosts the Vietnam Regional Specialties Fair 2024
This year's fair will contribute to the promotion of trade and the expansion of typical regional products, especially agricultural and food products that meet export standards.
14:06, 2024/11/20
Hanoi strengthens export competitiveness and trade protection measures
Hanoi will work with the Ministry of Industry and Trade to ensure that businesses and manufacturers are ready for new challenges.
10:49, 2024/11/16
US reiterates Vietnam is not manipulating currency
The US Treasury Department’s positive evaluation underscores Vietnam’s progress in balancing its economic and monetary policies while fostering strong bilateral relations with the US.