Breakthrough Solutions: Reducing Costs and Elevating Vietnam’s Logistics Competitiveness

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Breakthrough Solutions: Reducing Costs and Elevating Vietnam’s Logistics Competitiveness

On 31st November, Vietnam Logistics Summit 2024 discussed in depth the most pressing issues of the industry, towards sustainable green development, promoting digital transformation and developing smart infrastructure.

Vietnam’s logistics sector boasts an impressive average annual growth rate (14-16%) and a favorable LPI ranking (43/154 in 2023). However, the industry is severely challenged by high logistics costs (equivalent to 20% of GDP) and inconsistent infrastructure.

4 Core Strategies for Vietnam’s Logistics Development:

At the summit, Mr. Do Thanh Trung – Deputy Minister of Science and Investment suggested four solutions to promote Vietnam’s logistics industry.

Refine Legal and Policy Frameworks:
- Amend and issue new regulations governing logistics services, multimodal transport, and cross-border transport.
- Internalize international commitments to create a stable legal basis conducive to logistics operations.
Synchronize Infrastructure and Transport Connectivity:
- Review master plans to ensure synchronicity and connectivity across all transport modes (sea, road, rail, inland waterways) and between regional economic hubs.
- Prioritize transport market restructuring by reducing the road transport share and increasing the share of rail and inland waterways to mitigate costs and congestion (e.g., local container shipping costs can exceed international rates).
- Integrate logistics centers, dry ports (ICDs), and bonded warehouses into a unified national system.
Accelerate Technology Adoption and Digital Transformation (Logistics 4.0):
- Digital transformation is essential for optimizing operations and enhancing efficiency.
- Integrate modern technologies like AI (route optimization, demand forecasting), Blockchain (transparency, security), and IoT (real-time cargo data) for smarter supply chain management.
- Improve logistics infrastructure integrated with e-commerce activities.
Develop High-Quality Human Resources:
- Workforce quality is the decisive factor for sustainable development. Demand is projected to exceed 200,000 personnel by 2030, but current supply meets only about 10% of the market need.
- Training programs must feature close collaboration between training institutions and businesses, focusing on practical skills, supply chain management, foreign languages, and digital technology (Source: Government News).