Weak logistics sector retards development

CA - The country's logistics sector faces many challenges in improving its low competitiveness with businesses in the sector being held back by their small size, poor infrastructure and a lack of modern equipment, according to a recent seminar.

The sector must overcome a raft of challenges if it is to help improve freight forwarding and shipping to Vietnamese exporters, who already pay high fees for what many complain to be a low-quality service.

At the seminar on raising the logistic sector's competitive edge, held in HCM City on Wednesday, participants said that though the country was expected to fetch a significant export and import turnover of US$200 billion next year, exporters were facing many challenges to fulfil the target with some of the difficulties stemming from the weak domestic logistics industry.

Meanwhile, links among businesses, ministries and authorities in provinces and cities needed to be strengthened.

At the seminar, most participants complained about the unfavourable factors adversely affecting export-import activities while reducing the export sector's competitive edge.

These factors include continually rising shipping fees, high interest rates, fluctuations in the foreign exchange rate between the domestic currency and US dollar, complicated export-import and customs clearance procedures, tax policies and the issuance of Certificates of Origin (C/O).

A representative from the Viet Nam Pepper Association said the poor quality of transportation, a lack of equipment and warehouses, high shipping fees and low service quality were considered the major problems for the logistics industry.

He said these problems had resulted in the domestic shipping sector only being able to secure 20 per cent of the market share in the domestic market.

As foreign shipping fleets had secured 80 per cent of market share, they could charge high prices for freight forwarding and shipping services, he added.

Meanwhile, VIFFAS's Chairman Do Xuan Quang said the local logistics sector had had many opportunities to develop as the national economy was still experiencing rapid growth.

Participants agreed that the local logistic sector should continue to invest in modern equipment, warehouse and adequate means of transportation in order to sharpen its competitiveness and increase service quality.

VIFFAS's Deputy Chairman Le Duy Hiep said infrastructure for the local logistics industry should receive more investment to meet the nation's export and import demands while improving links between logistics and export-import companies.

Do Ha Nam, general director of the Viet Nam Intimex Joint Stock Corporation, said domestic shipping fleets needed to improve their capacity and slash shipping times in order to meet freight forwarding and shipping demands from the export and import sector.

Nam also said customs clearance procedures should be streamlined to create favourable conditions for businesses involved in export -import activities, adding that the country should also focus on building new warehouses, thereby cutting shipping cost for Vietnamese goods set for export.

The seminar, which was held by the Industry and Trade newspaper, VIFFAS and Viet Nam Logistics Review, attracted over 200 businesses, associations and producers involved in the export-import sector and logistics industry.