VietNamNet Bridge – The logistics services market in Vietnam is on a growth trajectory owing to rapid globalization and the approval for 100% owned foreign companies to enter the market, say experts.

On May 18, at seminar in Ho Chi Minh City, experts said logistics services are broadly comprised of courier services (such as FedEx, EMS International and DSL), freight forwarding, third party logistics (3PL) and reverse logistics.

Growing business of all types and industries are the key drivers of the market, they said.

“Poor infrastructure is the major challenge faced by the courier industry,” said Bui Quoc Nghia, director of the Vietnam Institute of Logistics, at the seminar.

“One of the major critical challenges faced by companies today is of insufficient integration of transport networks, information technology, warehousing and distribution facilities.”

He said, infrastructure is the backbone of every country’s growth and prosperity and for the logistics industry to flourish in Vietnam, special emphasis has to be laid on the enhancement of the infrastructural facilities.

Particular focus needs to be given on building world-class road networks, integrated rail corridors, modern cargo facilities at airports and creation of logistics parks that need to be given a status equivalent to that special economic zones.

The importance of good storage and warehousing facilities can’t be underestimated and are critically essential to the growth of the logistics industry.

With the increase in the transportation of perishable products over recent years brought about by integration, agencies associated with logistics will have to give a lot more importance to enhancing warehousing facilities, he underscored.

Warehousing will also need to go to the next level taking into account the changing dynamics of manufacturing in industries across the board, global procurement and new models of sales and distribution.

Mr Nestor Scherbey, senior advisor of the Vietnam Trade Facilitation Alliance (VTFA), in turn said complex trade regulations are another major obstacle hindering the development of the logistics industry.

Regulations exist at a number of different tiers, said Mr Scherbey, as imposed by national, regional and local authorities. These regulations often differ from region to region, hindering the creation of national networks.

He also talked about the importance and synergy of logistics development and its correlation to improvements in the supply chain, noting much more research needs to be done in this area.

It is important to prioritize research and development so that any weaknesses in the logistics industry can be identified and resolved, thereby facilitating further improvements across the supply chain of the economy.

VOV