Shortcomings of Logistics Industry

There are nearly 1,000 enterprises but the internal logistics account for less than 20-25% of the market share, while the number is less than 1/10, the "giants" of foreign logistics in Vietnam have "swallowed up" 80% of the market.

Risk of loss in total

An Enterprise confessed that 80 - 85% of internal logistics enterprises only operate as a kind of "trigger" or focal point for foreign agents, only "dot" a very small part of the market is hiring customs, transporting Domestic shipping and selling international freight. "Embracing" almost the entire large market segment, foreign ship owners double or triple a year raise rates and surcharges unreasonably, but Vietnamese shippers still have to be patient. This is also the reason why Vietnam's logistics costs are very high, accounting for 20% of the cost of the product cost, while in countries only from 8-10%.

According to Dr. Chu Quang Thu, former Director of the Vietnam Maritime Administration, logistics, understood in the simplest way, is the connection between the flow of goods, money and open information. Or more specifically, the closed cycle from the supplier of raw materials, products to the consumer. In order to have this connection, Enterprises logistics must set up a wide and transparent network system. But considering this criterion alone, the domestic logistics Enterprises cannot meet it. The linkage of Vietnam in the logistics field is still only at the first and second parties (cargo ships and ports), while foreign shipping lines have moved to the fourth (global link), even the 5 (electronic link). This situation is the result of three great weaknesses of the domestic logistics industry: the system of laws and regulations has not created horizontal links (linking all banking, customs, warehousing, and forwarding services. …). For example, the transportation is managed by the Ministry of Transport, while the management of the goods are under the Ministry of Industry and Trade, so it does not create favorable conditions for customers. The Law on Road does not have a single line on logistics ... On the other hand, the custom of buying CIF and selling FOB Vietnam import-has made logistics Enterprises unable to compete with foreign enterprises. Third is the serious lack of professional logistics manpower.

According to Mr. Thu, about 1,000 logistics Enterprises today are just a "change of name" from the previous logistics enterprises, but have never had real logistics Enterprises, creating a systematic link as foreign Enterprises. According to the WTO integration roadmap from 2012, no later than 2014, the transport and logistics service sub sectors will be open to foreign enterprises. This means that in less than 2 years, foreign logistics Enterprises will be able to officially do business in Vietnam without any restrictions. It is entirely possible that multinational corporations will dominate almost the entire domestic market.

Mistakes from planning

Dr. Ly Bach Chan, an advisor of the Vietnam Freight Forwarders Association (VIFFAS) also said that the domestic transport infrastructure has not created a complete system strong enough, linking between provinces and regions to exploit. The most typical example is the port cluster in Ba Ria-Vung Tau, the volume of goods transported in reality is very low compared to expectation, also because the road system connecting the port, the warehouse system is incomplete.

An expert said that the gaps in the current logistics system, due to mistakes from planning, spreading and clustering too many berths, airports, without even anticipating stepping on each other, lack of goods lead to many ports, many airports are dry with food. Domestic Import-Export Enterprises "Coal" Logistics Enterprises do not have sufficient capacity, do not have bonded warehouses to store goods, but the fact that the "solid" style of import-export has also made the logistics pie to cede most Foreign Enterprises. Many bonded warehouses have been built but are also abandoned due to lack of connection with ports. In fact, the late realization of the important role of logistics is also an important cause of loss. loss of domestic logistics activities. In early 2011, the Prime Minister recently issued Decision 175 approving the overall development of Vietnam's service sector until 2020, and for the first time, Vietnam has a logistics service strategy, “considering logistics as a key factor to promote the production of distribution systems for other service industries and domestic goods circulation and import and export ”. But there are no steps to detail them.

Learn from Singapore

Right from the 80s of the 20th century, the country has mobilized capital from government bonds, people's savings funds to invest synchronously in infrastructure including transshipment ports, modern highways, and airways… one step ahead for the development of future logistics services. Singapore has also built a system of seaports, shipping, airlines, logistics companies into a unified chain of services under the model of One - stop shop (only one stop is to buy all) and achieve success, being one of the countries with top logistics services in the world.