Logistics industry faces challenges to integration

Domestic logistics companies have only a year to meet commitments to integrate into global transport services.
A report from the Ministry of Industry and Trade states that about 60 percent of the country’s commercial value is from logistics services, which make up between 15-20 percent of GDP.

The Vietnamese logistics industry has attracted a number of foreign investors and there are currently close to 1,000 companies that have been established in the country.

These firms have under performed in the domestic market and in the international market, according to the report.

The Vietnam Freight Forwarders Association (Viffas) says the Vietnamese logistics services have not yet fulfilled their potential.

The association says only 10 percent of companies truly provide logistics services and the remainder just work for foreign companies, adding that a lack of transparency has impacted on competition.

According to Viffas, Vietnamese companies are only able to supply simple logistics services.

Marketing abilities are also noted as weak, lacking professionalism, the association says.

Due to these shortcomings, about 70 percent of the market share was captured by foreign companies.

This figure may increase when the commitments to the World Trade Organisation to open the market to foreign transport service companies comes into effect in 2014, and similar commitments to ASEAN are put place in 2013.

Viffas has proposed to set up a national logistics committee and a logistic association to address these issues.

Tags: Vietnam logistics industry