Red tape must be removed for domestic logistics firms to develop and compete in a market which had great potential, driven by a boom in international trade, but was now dominated by foreign rivals, attendees were told at a conference held by the Central Institute for Economic Management (CIEM) on Monday.

Tan Cang Sai Gon Port. Booming international trade and e-commerce presents many opportunities for the logistics sector. 

CIEM’s Director Nguyen Dinh Cung said that foreign logistics companies dominated the market while domestic firms faced administrative hurdles, such as complicated procedures and business prerequisites, as well as poor connectivity and underdeveloped infrastructure.

“If the red tape is not removed, domestic logistics firms will not be able to develop and compete with foreign rivals, while opportunities would rest in the hands of international firms,” Cung said.

Cung said that the logistics industry was the backbone of international trade, thus it was necessary to improve its efficiency in Viet Nam. Cung cited statistics showing that countries with the same GDP per capita and more efficient logistics operations achieve a one per cent advantage in GDP and two per cent in trade.

According to Michael Krakowski, German Agency for Development Co-operation (GIZ) Programme Director and Chief Technical Advisor of the Macro-economic Reforms/Green Growth Programme, it was necessary to develop policies to enable the logistics industry to take opportunities from the Fourth Industrial Revolution.

CIEM said that the competitiveness of Viet Nam’s logistics industry remained low due to underdeveloped infrastructure and poor connectivity, plus the burden of numerous administrative procedures and business prerequisites.

In addition, the application of IT in domestic logistics remained modest.

Nguyen Thi Minh Thao, head of CIEM’s Business Environment and Competitiveness Department, said that although the Government had paid significant attention to boosting logistics in recent years, the industry faced significant red tape.

Thao cited an example of a company submitting documents to register 200 vans but after three months had not received approval because it was required to submit more documents.

Thao also said that the operation of transportation platforms in Viet Nam remained inefficient due to a lack of customer trust as well as confidence of participants. In addition, there was a lack of measures to ensure safety for goods during transportation.

Tran Duc Nghia, director of logistics company Delta International Ltd, said that it was necessary to promote the application of IT in logistics companies to improve operation efficiency.

According to real estate and investment management services firms Jones Langla Salle, it was prime time for logistics, driven by advancements in the e-commerce sector.

The Ministry of Transport recently issued a plan to develop solutions to lower logistics costs and improve the connectivity of the transportation infrastructure system.

Accordingly, at least 60 per cent of business prerequisites in transportation would be eliminated.

In addition, policies of taxes, fees and service charges would be amended to attract investment in logistics.

Focus would also be placed on improving the infrastructure system, including roads, railways, waterways and marine transport.

Viet Nam is calling for foreign investment in logistics infrastructure to improve connectivity with countries in the region and around the world.

In July, Prime Minister Nguyen Xuan Phuc issued Directive 21 CT-Ttg about lowering logistics costs. — VNS