Logistics firms work for foreign conglomerates in home market
VietNamNet Bridge - In developed countries, logistics make up 15-20 percent of GDP. But in Vietnam, the industry can satisfy only 25 percent of market demand.


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Tran Van Bao from the Hanoi Economics University, said that since 2001, especially after Vietnam joined WTO in 2007, the Vietnamese logistics market has been growing rapidly with more than 1,000 businesses, of which 18 percent are state-owned, 80 percent are privately run and 2 percent foreign invested.

The number of businesses providing logistics services in Vietnam is even higher than other South East Asian countries and logistics is among the business fields with the highest growth rates in Vietnam.

Domestic logistics firms provide trucking transportation, cargo terminals and seaport services. Many foreign firms have entered Vietnam or scaled up their business in Vietnam. Samsung has teamed up with MP Logistics to set up a firm in the sector.

The Vietnamese logistics market has been growing rapidly with more than 1,000 businesses, of which 18 percent are state-owned, 80 percent are privately run and 2 percent foreign invested.

However, according to Bao, Vietnamese logistics firms can only provide certain services. The most important area in logistics activities in Vietnam is maritime shipping with 90 percent of imports/exports. However, Vietnamese firms can only undertake 20 percent of jobs, while the remaining falls into foreign hands.

Bao noted that Vietnamese logistics firms tend to work as agents for foreign firms or team up with foreign partners to set up joint ventures. Vinalines, for example, has set up a subsidiary which works as the agent for some foreign freight and forwarding conglomerates and receive commissions on import/export volume. 

“Vietnamese firms are inferior in the logistics markets. They have to work for foreigners in the home market. This is a big problem,” he said.

Dang Dinh Dao, former head of the Economic Studies and Development Institute, believes that Vietnam needs to establish a national logistics committee with members from the Ministries of Transport, Planning & Investment, Industry & Trade, Finance and Information.

He also thinks that encouraging private investors to develop logistics firms is an important solution to develop the industry in Vietnam.

Nguyen Tuong, deputy secretary general of the Vietnam Logistics Association, complained that logistics firms meet many barriers in their development path.

Hai Phong City began collecting high port infrastructure fee in January, which has made it more costly and time-consuming to implement logistics services.

Meanwhile, Circular 103 has led to a reduction of 50 percent in the volume of goods left at bonded warehouses. And the high road tolls and underground fees also lead to higher costs.


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Thanh Lich
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