The Hanoitimes - According to experts on logistics market, it is expected that the Vietnam’s logistics market will reach the scale of 1.4 billion USD per year in the upcoming 2 – 3 years.
This growth rate is higher than other markets in the world, which shows the potential for strong development of the Vietnam’s logistics market. However, the importance is that the logistics need to focus on serving small and medium enterprises (SMEs) in export and facilitating global trade. Vice Chairman of FedEx Trade Networks., Inc in Asia under the FedEx Corporation – Mr. Edward Hui said, Vietnam is among the fastest growing economies in the world, abundant workforce and reasonable production cost. The government and related ministries have pushed forward for economic development through the encouragement for foreign direct investment (FDI) in production and manufacturing, increasing export. In particular, in global trade, Vietnam export has increased steadily, and gradually becomes important trading partners in major world markets such as the US, Europe, Korea and Japan.
Besides, the Vietnam’s market export with advantages of products such as textile & garment, furniture, shoes, electronic products. These are both fields FedEx Trade Networks have experiences, which can provide logistics services for enterprises from road transport with multi modal transport (truck, train, etc.,) to airlines and sea transport. The global booking logistics system as well as existing database which allow customer to access, monitor, and tracking the status of orders, and the process of transporting orders.
“solutions for global transportation are designed to bring benefits for enterprises, as well as to save transport time, maximizing profit and meeting demands of the logistics , which bring the imported goods to access market faster with competitive price. As one of the motto of FedEd Trade Networks is “we love SME”, and customer is the center, all the company activities are built around the customer’s demand, which is focused on the service and only then come the profit. As such, it will support export enterprises to focus on its operation and development” – Mr. Edward Hui shared.
For SMEs, in order to facilitate in the global trade, it would be very difficult and challenge in custom clearance, utilizing the advantages of free trade agreements (FTAs) with regard to import tariffs to identify the tariff or to receive the lowest possible tariffs. Thanks to expertise and knowledge in the legal trade at major markets in the world, services related to custom clearance and support on tax procedures offered by FedEx Trade Networks will support enterprises efficiently in these issues, which support enterprises to avoid possible risks of violating regulations related to custom and tax, saving time, cost and personnel specialized in this matters.
Thanks to its underdeveloped transport infrastructure and inadequate logistics facilities, logistics costs in Vietnam are estimated to run at about 25% of GDP, far higher than the 18% in China and the 13% in Malaysia. This presages a huge scope for efficiency gains in the longer run, in particular through the establishment of Vietnamese-foreign collaborations. In a 2014 report, the World Bank noted that a more competitive transport and trade logistics system in Vietnam could be a new driver of sustained economic growth in the country, enhancing productivity as well as boosting business competitiveness.
Currently, foreign companies dominate Vietnam’s logistics market, particularly in the international transportation segment. There are about 40 foreign shipping firms in Vietnam, handling more than 80% of the country’s imports and exports, primarily with regard to trade with the European and American markets.
According to the Vietnam Logistics Business Association, there are about 1,300 logistics companies in the country. Although domestic companies represent 80% of the total number of logistics firms, they only account for about 25% of total market share. Most of these home-grown businesses are small-scale companies with limited financial and human resources.