The Government’s Supportive Policies for Advancing Vietnam’s Logistics Sector
Vietnam’s logistics sector is currently undergoing a significant digital transformation, propelled by supportive government policies aimed at enhancing competitiveness and operational efficiency. As highlighted in a recent survey by Vietnam’s Digital Trade Project in collaboration with the US Agency for International Development (USAID) and the Ministry of Industry and Trade (MoIT), there is a clear emphasis on leveraging technology to drive this change.
A Surge in Digital Investments
The logistics industry is embracing new technologies at an impressive rate, with 68% of companies actively investing in systems like warehouse management and smart transportation solutions. This shift is evident as businesses recognize the importance of these tools in improving operational efficiency. The survey further disclosed that 67% of participants have adopted comprehensive digital transformation strategies, with half facilitating stronger connections with customers and suppliers through innovative software solutions.
Financial Commitment to Transformation
Annual investments for digital transformation range significantly, with 67% of companies allocating between VND 1 billion and VND 5 billion (approximately USD 39,421 to USD 197,088). These investments are motivated by clear objectives: reducing costs, enhancing accuracy in cargo handling, minimizing transport times, and elevating customer service experiences.
Pioneering Examples of Technological Application
A prime illustration of this tech-savvy approach can be seen with J&T Express. The organization recently inaugurated the largest transit center in Northern Vietnam within Quang Minh Industrial Park, equipped with advanced automated systems for monitoring item codes and dimensions. This hub is capable of processing up to 2.4 million parcels each day with a remarkable 99% accuracy rate, demonstrating the tangible benefits of embracing automation.
Similarly, Viettel Post Corporation has made strides by launching the Viettel Logistics Park in the Dong Dang Border Gate Economic Zone. Covering an expansive 143.7 hectares, this facility can accommodate a significant daily vehicle flow and offers a complete suite of import-export logistics services. By utilizing digital twin technology, the park is set up for real-time data analytics, enabling predictive insights into cargo flow and enhancing overall logistics performance.
Government Initiatives to Enhance Logistics
With Vietnam ranking 43rd out of 139 countries for logistics performance, governmental support has become paramount. The logistics sector in Vietnam is fueled by annual growth rates of 14%-16%, with revenues estimated between USD 40 and 42 billion. However, challenges remain, particularly as over 90% of the 35,000 logistics firms in the country are small and medium-sized enterprises (SMEs). Many of these organizations are still at nascent stages when it comes to technology and digital investment.
Barriers such as limited funding and inadequate skilled workforce hinder the broader adoption of digital tools. Furthermore, inconsistencies in technological infrastructure lead to inefficiencies within management and operations, exacerbating the competitive divide between larger and smaller firms.
Strategic Government Policies for Growth
In response to these challenges, the government is enacting supportive policies designed to stimulate the logistics sector and promote digital transformation. Tran Thanh Hai, Deputy Director of the MoIT’s Import-Export Department, emphasized the crucial role that the National Digital Transformation Program will play by 2025, urging that logistics be recognized as a priority area. This initiative also aims to ease SMEs’ access to cutting-edge technologies.
Experts like Pham Thi Lan Huong from the Vietnam Digital Trade Project advocate for improvements in the legal framework governing e-commerce and digital security. This would create a conducive environment for logistics companies to thrive. Additionally, the establishment of a green logistics startup fund has been proposed to support businesses seeking innovative and sustainable logistics solutions.
A Forward-Looking Approach to Logistics and Sustainability
The future landscape of Vietnam’s logistics sector is likely to be characterized by an increasing focus on sustainability and globalization. Trevor O’Regan, an international expert, asserts that competitive advantages will hinge on effective use of AI and digital commerce. His insights underscore the importance of establishing recognized universities and research institutes that specialize in global supply chain management to cultivate the skilled workforce necessary for this evolution.
As Vietnam’s logistics sector continues its digital transformation journey, the interplay of government policy, technology, and a commitment to sustainability will drive its future success.