Vietnam logistics businesses can develop niche strengths: VietAviation CEO

Although FDI enterprises account for a large slice of Vietnam’s “logistics cake,” domestic companies are holding their own in the currently volatile economic situation. There are niche activities that give domestic firms their strength, said Duong Quang Duy, CEO of VietAviation Logistics Co., Ltd.

Currently, the bigger slice of the logistics cake in Vietnam is in the hands of FDI enterprises. As a domestic startup in this field, how does VietAviation Logistics manage?

It is true that international companies are professional logistics service providers. However, they can’t do everything. Vietnamese logistics businesses have their own strengths to develop.

VietAviation is a start-up in the field of logistics and we have our own path. Our approach is that transportation firms deliver cheap freight rates to the Vietnamese people, help Vietnamese businesses improve their competitiveness to enter the Chinese market and, in the future, India.

Cheap freight rates and fast shipping are advantages when it comes to competing with rivals and surviving. Currently, VietAviation's express delivery and logistics freight rates (including by sea and air) are about 15% cheaper than those of international logistics companies.

Why did you choose China as your most important market? Are there advantages and disadvantages to this?

Currently we are shipping agricultural products, Vietnam’s strength, to China. My desire is to build VietAviation Logistics into a bridge helping Vietnamese businesses steadily enter the Chinese market, including Hong Kong, Macau and Taiwan.

We can do this thanks by reducing costs and developing a variety of logistics services because we have a certain understanding of this market; and we also recognize the extremely large trade potential between Vietnam and China, especially for agricultural products.

However, we have to acknowledge that besides the impacts of the political and economic situation at home and abroad, VietAviation, as a young start-up, is facing many difficulties including the lack of investment capital and weak personnel strength.

It has been reported that many Vietnamese logistics firms deliver poor quality service at high rates. Can you comment?

In fact, the high rates come from many factors including the international geopolitical context, the state's investment policy for infrastructure, and technical barriers in the import and export field.

Regarding domestic logistics businesses, my personal assessment is that they are very dynamic and good at adapting to change.

However, at a higher level, there should be intervention from the government to support Vietnamese logistics businesses. Only then will the logistics sector in particular and our supply chain in general develop rapidly and integrate deeply into the global economy.

As an initial step towards establishing supply chain links, VietAviation has cooperated with major partners like military-run telecom service provider Viettel and delivery company Ahamove to optimize capacity based on available facilities.

In addition, we have more than 60% of employees fluent in Chinese, 80% good at English, and about 20% who know how to use three languages to facilitate negotiations.

Before starting your business, you were a lecturer at several universities. What do you think about the quality of human resources in the logistics industry today?

I think logistics service providers need to promote training and retraining to improve labor productivity. Specifically, they can enhance internal training and apply digitalization to logistics activities.

The quality of the workforce in this field remains relatively low. Young Vietnamese are still weak in using foreign languages as also applying soft skills at work.