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VietNamNews

Poor infrastructure hinders freight firms

Update: July, 03/2012 - 09:42

 

Goods and materials are loaded at Cat Lai Port in HCM City. A comprehensive development plan is needed to improve logistics services in Viet Nam. — VNA/VNS Photo Huy Hung
HA NOI — The lack of co-ordinated port, airport, depot and road infrastructure together with low capacity in the flow of goods and materials (logistics) have held back the sector's development, according to the Viet Nam Freight Forwarders Association.

Domestic logistics enterprises occupy only about 25 per cent of market share although numbering nearly 1,000, more than ten times the number of foreign firms operating in Viet Nam.

Up to 80 per cent of domestic freight transport companies are small in scale while around 30 of the world's leading forwarders currently offer services in the country.

Director of SGN Logistics Ta Thi My Linh told Nguoi Lao Dong (The Labourer) newspaper it was hard for domestic logistics enterprises to compete with foreign ones.

She added that the cost of logistics services in Viet Nam was high compared to other countries in the region and the world, which has lowered local competitiveness.

Meanwhile, as scheduled, Viet Nam would have a fully open logistics market by 2014 on which competition between local and foreign firms would drastically increase.

Jonathan Beard, managing director of GHK International (Hong Kong), said at a recent meeting on supply chains in Ha Noi that Viet Nam has yet to become a "marine country" despite having a more than 3,260-km coastline and an advantageous location.

He pointed out that the port system in the northern part of the country was still small in scale and dispersed, failing to meet increasing freight transport demand.

According to VIFFAS Chairman Do Xuan Quang, a comprehensive development strategy for Viet Nam's logistics to 2020, with a vision to 2030, is essential.

Focus should be placed on training human resources in logistics services, Quang proposed.

According to the VIFFAS, there is a current shortage of qualified logistics staff, with only 40 per cent of demand met.

Besides, information and communications technologies should be applied to logistics services to increase quality, he added.

With the Prime Minister's Decision 175 on local service development approved last year, logistics is regarded as a key factor in promoting the distribution of other service goods as well as import and export. — VNS

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