Vietnam Transport Sector Seen by Entrepreneurs

In recent years, Vietnam economy has continued high growth rates. GDP increased on average 7.5 per cent a year. The export turnover increased 20 per cent a year. In the first quarter of 2006, Vietnam recorded for the first time a trade surplus. Though small, it is a good sign for the efforts to balance the trade and to become a stronger exporter by 2010. It also opens up opportunities for other industries and services, including transport sector, especially small and medium sized enterprises (SMEs) of the sector.

 

According to American Shippers Association, in 2004, the world shipping sector hit the highest profit in the past three decades. Five companies gained profit of over US$1 billion and eight others from US$500 million to US$1 billion. The 14^th Forum of Asian Shippers held in Australia in May 2005 predicted that Dry/Bulk shipments continue to grow in coming years, VLCC (oil tankers) remain stable, while container shipments increase, especially across the Pacific.

 

In 2005, air freight increased only 3.2 per cent over 2004. According to Black Aviation, the air freight will return close to previous growth rates as the economic globalisation continues to expand. Meanwhile domestic and international air freights in Asia gain importance with economic growth in China, India and Vietnam, promising a sustainable development in the region.

 

As for Vietnam, with the termination of State monopoly in transport sector and progresses in air, land and rail services, private companies have participated actively and made the market highly competitive, especially in domestic transport.

 

However, due to limited resources, SMEs could act only as agents for large companies and transnational corporations. Mr. Nguyen Thanh Khuan, Director of Viet Hoa Transport Company, said that SMEs need the support of related authorities in access to soft loans and in business cooperation with local and foreign companies.

 

For his part, Mr. Nguyen Ngoc Que, Director of A.Q Transport Company, said that, in their best interests, transport enterprises must join efforts and develop their strengths in business cooperation and joint ventures. SMEs acting as agents for large companies and corporations are realistic, especially in preparation for WTO accession.

 

Sharing the same view, Mr Dao Thanh Luu, Director of HL Cargo Company, said that the economic integration will increase Vietnamese trade and transport services. Vietnamese entrepreneurs must make joint efforts changing from FOB sales and CIF purchase to FOB purchase and CIF sales, first, because Vietnam companies have adequate capacity and experiences, and second, it generate more jobs and savings for Vietnam.

 

Mr Nguyen Minh Quang, Director of Cao Anh Transport Company, believed that in face of oil price hike and limited means of transport, Vietnamese entrepreneurs must set up transport lines and networks to reduce cost and increase efficiency.

 

While consenting with the views of other participants, Mr Nguyen Bac Truyen, Director of Vietex Transport Company, recommended related authorities to assist the transport sector in taxation, trade promotion and training of human resources.

 

Ms Hoang Thi Bich Phuong, Manager of Gateway Logistics (Vietnam), said that though the transport sector, especially in Ho Chi Minh City, is highly competitive, it has great and untapped potentials. Entrepreneurs should find their own niche. They should develop packaged service instead of selling freight. Business cooperation is essential, even with competitors, to achieve common objectives and interests.

 

Mr Vu Thanh Phat, Director of Mekong Lotus Company, pointed out hat fact that, in spite of high competition, more and more companies are engaging in transport service. They have difficulties in import and export formalities. Mekong Lotus and others can help them.

 

With WTO accession, Vietnamese businesses will have both more opportunities and challenges. And as former Deputy Prime Minister Vu Khoan put it : WTO accession is a means for Vietnam to develop with the world trend. Whether Vietnam can use it efficiently or not, it depends on Vietnamese business community, and in this case, the transport sector.