Hanoi (VNA) - Technology is seen as oneway to help domestic logistic enterprises cut costs to gain an edge amidsthigher demand in global transport.

A survey by Vietnam Logistics Association (VLA)revealed that 87 percent of logistic enterprises agreed that technology createsa competitive edge and 83 percent it’s up to them to better use technology.

IT use in Vietnamese logistic firms, though at amedium level compared to the world, has increased in recent years.

About 40-50 percent of businesses have usedtechnology in transportation, higher than the 15-20 percent two years ago. Somebig firms have even utilised technology from the world’s leading companies suchas Oracle and IBM.

However, as most of them are small and mediumsized enterprises (SMEs), they mostly use mandatory applications such ascustoms declaration software Manifest on the national one-stop system or truckpositioning software. Only 10-15 percent of companies use technology to managetransportation, vehicles or warehousing.

According to VLA’s chairman Dao Trong Khoa, it ishigh time for logistic firms to apply technology in their business as the localindustry is facing many challenges, including increasing complexity in globaltransport, higher customer demand and declining profit margins.

The boom of e-commerce is changing the market, asthe size of each order is getting smaller while the number of orders is gettingbigger. Moreover, the workflow of local companies overlaps which causes wasteand higher costs.

According to him, digital bills of lading canallow businesses exchange information with authorities across the borderwithout the need for paper. Digitalising waybills also helps create big data,so firms can exploit this data to grow their business.

Nguyen Nang Toan, Director of Saigon NewportLogistics Centre under the Saigon Newport Corporation, said technology wasconsidered an investment for the company, not a cost.

The Saigon Newport Corporation is a big logisticscompany which accounts for half of Viet Nam’s market share of containershipping services and uses Oracle’s logistics solutions. But according to Toan,local SMEs can use ‘local’ software suitable for their business scale andfinancial capability.

He emphasised unsuitable solutions or technologymay extend time and raise costs without getting results.

Khoa suggested the government deliver solutions toimprove transport infrastructure, reduce environmental charges andbuild-operate-transfer fees to help reduce logistics fees.

Logistics cost in Vietnam are still high,accounting for 16.8 percent of enterprises’ costs, higher than the average of12.5 percent in Asia-Pacific, in which transport cost accounts for up to 50percent.

Regarding transport and logistics, the Stateshould plan wharves and transport grounds to avoid traffic jams andunreasonable expenses, he said, adding that the Ministry of Industry and Tradeshould advise on the re-construction of the logistics centre.

He also proposed the use of electronic deliveryorder with digital signature in all transactions which will help save cost andtime and eliminate the risk of carrying cash.-VNA