The Vietnam Seaport Association said Vietnamese logistics companies presently account for more than 25 percent of market share and the logistics industry is short of breath in the race for bigger market shares with foreign competitors. Even, some domestic logistics companies have pointed their weapons to other domestic competitors as they cannot compete with foreigners. Vietnam seems to be losing its home ground to foreigners.
According to statistical data, Vietnam’s logistics services sector ranked 53rd out of 155 countries rated in the world, with revenues accounting for about 15 - 20 percent of the country’s GDP. These attractive figures have brought world-leading logistics and shipping corporations like APL, Mitsui OSK, Maerk Logistics and NYK Logistics. That explained why the logistics services have expanded so quickly, from a few State-owned companies in the 1990s to nearly 1,000 companies at present. However, for the time being, the competition between domestic companies and foreign companies is unequal. Foreign competitors are affiliates of powerful maritime corporations in the world with very thick experience, abundant financial resources, well-established professional services, and world-wide operations. With these competitive edges, foreign companies occupy more than 80 percent of the market share. Meanwhile, due to insufficient technical infrastructure and poor governance, Vietnamese companies can undertake only simple services in small scale. Their operations also rely on many agents and intermediaries. They mainly complete by lowering service prices.
Mr Tran Duy Hien, General Secretary of the Vietnam Freight Forwarders Association (VIFFAS), said, only 10 percent of Vietnamese operational freight forwarders have enough potentials and capacity to provide logistics services. Most companies now have to rely on foreign partners to take up their forwarding, warehousing facilities and technological levels. As globally defined, logistics denotes many different fields like shipping, railway transportation, waterway transportation, air transportation, warehousing, forwarding, maritime services, supporting services like ports, customs, import, export, banking, insurance and quarantine. And, most of these market segments are falling into the hands of foreign companies. Worryingly, many domestic logistics companies are unfairly competing with each other. They usually lower prices to win bids. And, according to experts, logistics service charges in Vietnam are low in the region. Specifically, the minimum fee for unloading a 20-foot container is US$60 - 70 but the rate is just US$30 in some ports in Vietnam. Unfair competition in prices among domestic companies is a good chance for foreign companies to demand lower fees and take up more market shares.
Mr Ho Kim Lan, General Secretary of the Vietnam Seaports Association, said: Logistics is a promising sector in Vietnam. The top priority of the Vietnamese logistics industry is not to compete with each other or reduce service fees but remedy existing weaknesses like insufficient investment for infrastructure. The country now has only one effective operating highway. This affects the price of products transported from frontiers or seaports. Another drawback is limited investment for seaports to serve shipping better. Another obstacle is time-consuming administrative procedure. In the short term, to develop, Vietnam needs to internationalise logistics companies and train human resources. In the long term, it needs to invest in infrastructure, bridges, wharves, warehouses, airports in Hanoi and Ho Chi Minh City. It also needs to boost e-customs, especially road customs, because cross-border transportation will thrive in the coming time, said Mr Lan.
Anh Phương
Vietnamese
