Logistics sector insider calls for joint efforts to cut high costs

Logistics enterprises in Vietnam should join hands to lower high logistics costs and improve the industry’s competitiveness, CEO Cap Trong Cuong of Vietnam Container Shipping JSC said on Tuesday.

In Vietnam, logistics costs are equivalent to around 16.8% of GDP, much higher than the global average, according to the Vietnam Logistics Business Association (VLA). The Vietnamese ratio is also higher than those in Southeast Asia - 8.5% in Singapore, 13% in Malaysia, and 15.5% for Thailand.

The reason is businesses in Vietnam's logistics sector have not effectively supported each other, Cuong told a meeting held by the VLA to introduce the very first Vietnam International Logistics Exhibition (VILOG), set for August 10-12 in Ho Chi Minh City. He noted the sector has many large-cap companies with broad networks but cooperation within the industry remains low.

If all agree to cut high logistics costs, we can do it, said the CEO of Vietnam Container Shipping, a major firm in the sector regularly referred to as Viconship.

He added that loading and unloading fees at seaports in northern Vietnam’s Hai Phong city are currently the world’s lowest, at about $33 for a 20-foot container, even lower compared to Cambodia and Myanmar.

Tran Thanh Hai, deputy director of the Import-Export Department, Ministry of Industry and Trade, said Vietnam’s low loading and unloading fees are agreed upon by shipping lines and port operators, and the low levels, which regulators cannot interfere with, show that shipping lines have the upper hand.

As for the industry’s development, Hai said it has achieved an annual growth rate of 14-16% in recent years, and the current market size is in the range of $40-42 billion per annum.

According to an assessment in 2022 by Agility, a Kuwait-headquartered supply chain service company, Vietnam ranked 11th in the group of 50 global emerging logistics markets.

Directed by the industry and trade ministry, the first Vietnam International Logistics Exhibition in HCMC this August will showcase the sector’s development and its potential to further attract foreign investment. It also aims to promote technology transfer, human resources training, and a green ecosystem in the industry.

According to the organizers, the VLA and Vietnamese firm Vinexad, the show’s main categories of goods and services will include transport & forwarding, services & warehouse systems, packaging & cold chain, and logistics IT.

The exhibition has received registrations with over 200 booths from more than 150 firms from 16 countries and territories, such as Belgium, Canada, Taiwan, Germany, South Korea, the U.S., Hong Kong, Malaysia, Russia, Japan, Singapore, Turkey, Switzerland, mainland China, Vietnam, and Italy.

The show will feature foreign brands like Karl Gross Logistics, Nippon Express, Swisslog, and Fresco. Long-standing Vietnamese brands joining the event will include Saigon Newport, Viconship, Vinafco, Ratraco, and Vinatech, according to the organizers.