Only about 40% of logistics service businesses are using different types of technology. The application of digital technology in logistics has not really met the development needs in time.
According to the Agility 2022 rankings, Vietnam’s logistics market is ranked 11th in the group of 50 global emerging logistics markets. The compound annual growth rate (CAGR) in the period of 2022-2027 of Vietnam’s logistics market is forecasted to reach 5.5%.
Vietnam is currently the leading country among ASEAN countries in the number of logistics service enterprises licensed by the US Maritime Activities Administration (FMC).
THERE ARE STILL MANY BARRIERS
However, sharing at the seminar “Digital transformation to build a modern and sustainable logistics industry” on April 27, Mr. Phan Van Chinh – Director General of the Import-Export Department (Ministry of Industry and Trade) said that besides the remarkable results, the logistics industry also has many limitations.
Specifically, the cost of logistics services is still high; The promotion of links between logistics enterprises, between logistics enterprises and manufacturing and exporting enterprises is still weak. Moreover, a network of large-scale logistics enterprises capable of leading the market has not been formed, promoting the development of the logistics industry.
According to Mr. Chinh, one of the main reasons for these limitations is that the application of digital technology in logistics has not really met the development needs in time in the new situation.
In addition, Mr. Le Quang Trung – Vice Chairman of the Vietnam Association of Logistics Service Enterprises, said that currently only about 40% of logistics service enterprises are applying different types of technology depending on the scale and nature of services.
In particular, mainly services, including: customs declaration (100% electronic), tax payment (100% of electronic invoices), seaport operation management services, journey management of freight vehicles, warehouse management,…
According to Mr. Trung, the digital transformation of the logistics industry still has many barriers.
- First, cognitive thinking, habituation in dealing with subjects. Even in ports, in forwarding practices, there are still conflicts with new operating procedures due to differences between units and differences between regions.
- Second, technical and technological issues. Transforming and choosing the right technology for each industry in current conditions is not easy.
- Third, people, personnel, and deployment capacity shift from traditional methods to digital technology. Shippers are farmers, so they still follow the old way, the ability to apply new technology is very difficult.
- Fourth, financial. This is also a big problem, because digital transformation must invest comprehensively and synchronously from equipment to software, human resources …
- Fifth, the policy corridor for digital transformation is still not synchronous, the data system is not uniform, the infrastructure is not complete.
LINK TO BUILD A COMMON DATA SYSTEM
At the seminar, all opinions said that logistics is one of the key industries, which is considered as the “lifeblood” of the national economy, requiring strong investment, especially in the aspect of “digitalization” to be able to respond and adapt to the market context, maximally supporting the development of other industries. If the digital transformation is successful, we can shorten the waiting time at the port by up to 70%.
To overcome barriers, especially in the context of digital transformation, according to Mr. Trung, the issue of cooperation is really necessary.
Concurring, Mr. Tran Thanh Hai – Deputy Director General of the Import-Export Department (Ministry of Industry and Trade) emphasized that in the digital transformation process, there should be the companionship, coordination, support and linkage of all related units. This will create a spillover and promote our successful digital transformation.
From an expert perspective, Ms. Cao Cam Linh said that the most important thing is that businesses know when they need digital transformation and how to transform digitally. For the group of infrastructure and operation enterprises, this is a group with a large asset value, so it is imperative to apply digital transformation on the basis of acquired big data and conduct analysis.
As for small and medium enterprises, micro must know exactly what digital transformation is, what digital maturity is. “If we mature high in low digital transformation, it will be very good for businesses without necessarily chasing big businesses with comprehensive digital transformation,” Ms. Linh recommended.
According to Mr. Truong Tan Loc – Marketing Director, Saigon Newport Corporation, logistics businesses need to change old thinking to new thinking, change old ways. It is necessary for the companionship, support and cooperation of businesses, minimizing risks and simplifying processes in building and developing new solutions for local logistics systems as well as inter-regional connections.
It is necessary to build a common data system for Vietnam’s seaport system, connecting with ports in the region and in the world, contributing to increasing exploitation efficiency, increasing Vietnam’s competitiveness with neighboring port clusters such as Singapore or Thailand and Hong Kong.
With state agencies, representatives of Saigon Newport said that the State and localities need to build a synchronous infrastructure system, accelerate the progress of transport infrastructure connection projects, multimodal connectivity to facilitate the development of logistics services. Increase investment in logistics infrastructure and warehousing to strengthen the logistics ecosystem, remove traffic “bottlenecks” to facilitate the connection and transportation of goods, promote regional connectivity.
In addition, it is necessary to simplify procedures, build and connect shared databases, move towards digitization and solve online procedures. The legal basis system also needs to be updated to keep up with technology trends to encourage businesses to boldly invest and develop new services and technologies.
At the same time, develop qualified human resources that can meet the requirements of digital transformation. Enterprises need to strengthen training and development of high-quality personnel, have a cooperation model with schools and training centers to build training programs that are practical and highly applicable.