Hanoi (VNS/VNA) - Despite difficulties caused by the COVID-19 pandemic,the domestic logistics industry still has many opportunities forgrowth if it improves competitiveness with foreign competitors.

Accordingto the Ministry of Industry and Trade (MoIT), import and exportturnover of goods will continue to grow this year, creatingdemand for logistics services. By the end of 2021, Vietnam's total import andexport turnover is expected to reach a record level of more than660 billion USD.

Morethan 4,000 logistics enterprises are operating international logisticsservices in Vietnam where their operation has been increasinglyimproved thanks to increasing digital transformation applicationsand better business processes, especially ones providing servicesto European, American and Chinese markets. 

Accordingto the MoIT’s Vietnam Logistics Report 2021, in the first nine months of2021, the number of newly registered transport and warehousing enterprisesincreased by 4.61 percent, and capital increased by 43 percent overthe same period in 2020.

MoITdata showed that in 2021 many logistics enterprises grew in revenueand profit, most with double-digit growth, adding that the volume of goodstransported by road and waterways in 10 months of2021 significantly improved compared to the same term of 2020.

Thetotal tonnage of ships increased sharply by 22 percent over the sameperiod. The economic situation in the main export markets of Vietnamalso recovered.

TheGDP of major consumer markets in the world such as the US, EU, Japan, and Chinais forecast to continue to grow in 2022 and 2023.

Overthe years, Vietnam’s logistics industry has made remarkable progress. Vietnam'slogistics efficiency index is currently ranked 39 out of 160, up 25 placescompared to 2016, which is third among ASEAN countries. However, logisticscosts in Vietnam were still much higher than throughout the world.

Accordingto World Bank (WB) 2020 data, logistics costs in the country were about20.9-25 percent of GDP. Meanwhile, the cost in Thailand was19 percent, Malaysia 13 percent, Singapore 8 percent,and the US 7.7 percent.

Highlogistics costs push up the cost of import and export goods of 2020 data, whichloses its competitive advantage compared to other countries in Asia such as China,Thailand, the Philippines and Indonesia.

Withpressure in the fierce competition of international trade, the race intechnology continues to create competitive advantages, save time,optimise costs, create flexibility and reduce risks.

Arepresentative of the Vietnam Logistics Service Association (VLA) said about95 percent of logistics firms were small and micro enterprises, andmost of the revenue and market share belonged to foreign logistics enterprises.

Theassociation said the proportion of newly established transport and warehousingenterprises compared to the total number of enterprises in thecountry was still modest and the capital scale ofenterprises in the industry was still limited.

Inthe first nine months of 2021, there were 2,509 transport and warehousingenterprises that had to temporarily suspend operations, an increase of14.1 percent over the same period in 2020. At the same time, 571enterprises completed dissolution procedures, up 17.7 percent overthe same period in 2020, the association said.

“Currently,Vietnamese logistics enterprises continue to face stiff competition withforeign logistics enterprises,” a VLA representative also said.

HoThi Thu Hoa, Director of the Vietnam Logistics Research and DevelopmentInstitute, said that in order to improve the competitiveness of theeconomy and trade activities, Vietnamese logistics enterprises needed tofocus on the provision of high value-added services such as third-partylogistics services and fourth-party logistics services, internationalmultimodal transport services, and cross-border logistics services.

Hoasaid: “In order to have strong logistics enterprises, in addition toproviding logistics services with the highest quality and standards, businessesneed to make efforts in building a system that can flexibly adapt to marketfluctuations.”

Shesaid it was particularly necessary to promote the digital transformationprocess in logistics management through electronic port applications, automaticmonitoring, application of cloud computing technology and artificialintelligence to support and care activities, and at the same time develophigh-quality human resources./.