The Vietnam Logistics Forum 2017 had leaders of Associations, the World Bank and experts point out challenges and potential development for logistics industry in Vietnam. The event organized by the Ministry of Industry and Trade, World Bank in Vietnam, Association of Logistics Services Vietnam (VLA) in conjunction with the Vietnam Economic Times was held on December 15 in Hanoi.
Logistics costs of Vietnam are higher than those of other countries in the region
Mr, Le Duy Hiep, Chairman of the Vietnam Association of Logistics Service Enterprises, said that Vietnam's logistics services are growing at a rate of 15-16 percent / year. According to the World Bank's LPI, in 2014 Vietnam ranked 53 out of 160 countries and in 2016 the position was 64th, making the country stay at 4th among ASEAN countries, after Singapore, Malaysia and Thailand.
The number of logistics enterprises is estimated at 3,000, of which 70 percent are small and medium enterprises and 7 percent has capital of VND1,000 billion.
According to Mr. Hiep, Vietnam logistics industry is now having such shortcomings as small scale and weak operation, especially in the international markets. Most of the companies are operating domestically and very few have foreign offices (in Myanmar, Cambodia). In countries where logistics industry are developed like Singapore, Thailand, Vietnamese businesses are rarely seen.
After 10 years, services such as warehouse, checkout and storage have been well developed. However, air freight and ocean freight are still at ignorance.
An other obstacle to the industry is the high logistic cost which accounts for 20 percent of GDP, equivalent to USD41.26 billion.
Every year, this industry needs 20,000 and by 2020 it is expected to employ 200,000 people. "This is a challenge for the logistics industry in Vietnam," said Hiep, adding that logistics infrastructure is not synchronized, still suffering from congestion and high surcharge of air and sea cargo.