Hanoi (VNS/VNA) - There are 4,000Vietnamese businesses operating in the logistics field but most of them aresmall-scale with weak human resource quality, the Ministry of Industry andTrade (MoIT) reported.

According to the report, Vietnameselogistics enterprises are mainly operating on a small scale, with up to 90 percentof enterprises having capital of less than 10 billion VND (432,500 USD) (lowerthan the average registered capital of the enterprises), 1 percent of firmshave capital of over 100 billion VND, 1 percent have capital from 50 billionVND to 100 billion VND, 3 percent have capital of 20 VND to 50 billion VND, and5 percent have capital of 10 VND to 20 billion VND.

Up to 2,000 logistics businesses areone-member limited liability companies.

Only 400 businesses have joined the VietnamLogistics Business Association (VLA).

According to VLA statistics, memberenterprises represent over 60 percent of the national market share, including manyleading enterprises in the industry. The leading logistics enterprises currentlyinclude SNP, Gemadept, Transimex, IndoTrans, TBS Logistics, Sai Gon New Port,Delta, U&I Logistics, Sotrans and Minh Phuong Logistics, which are allmembers of VLA, providing services to all strategic markets of Vietnam.

The application of information technologyin logistics is modest and mainly focused on customs declarations and vehiclemonitoring and supervision. However, businesses and logistics centres aremaking efforts to innovate operations. In addition to the main functions ofpreserving, labelling, packaging, splitting, handling goods and preparingorders, logistics centres are applying information technology in goodsmanagement and tracking, as well as accessing location.

Some specialised logistics centres arealmost automated such as logistics centres of Samsung, Unilever, P&G,Vinamilk, and Masan. Major logistics centres are currently concentrated in HaiPhong, Dong Nai and Binh Duong, applying modern management systems of Gemadept,TBS, Sai Gon New Port, Transimex, Mapletree, Damco, DHL, Kerry Express andViettel Post.

Limited connection

Notably, there are 45 logistics centres innine provinces and cities of Vietnam, but most of them are second classlogistics centres (regional level), and are not yet developed in accordancewith the orientation of developing first class centres (national level).

The connection between modes of transportis a major limitation, pushing up logistics costs. This connection is clear onthe main transport corridors, with the focus on connecting railways and inlandwaterways with seaports, urban centres and production centres.

According to Deputy Prime Minister Vuong DinhHue, MoIT’s report has helped the Government to make an overview of the currentlogistics field in Vietnam. These are important data to develop this industry,contributing to promoting trade facilitation in the country as well asexporting goods.

VLA’s data showed that, together with thegrowth rate of GDP, industrial production value, import and export turnover,retail value of goods and transport services and infrastructure, in recentyears, Vietnam's logistics services have a relatively high growth rate of 12-14percent, the percentage of enterprises outsourcing logistics services is about60-70 percent, contributing about 4-5 percent of GDP.

With the World Bank's report in 2018,logistics performance index (LPI) of Vietnam is ranked 39 out of 160, up 25places compared to 2016 and ranked third place in ASEAN countries.-VNS/VNA