Formulate policies to develop the logistics industry

According to the Vietnam Logistics Services Association (VLA), this agency recently had a meeting with the representative of the World Bank (WB) in Vietnam to discuss issues on the current status of the logistics industry, current difficulties and obstacles in terms of costs, development planning and short-term prospects and long-term vision.

The report at the meeting showed that there are still many shortcomings in the logistics sector, such as the lack of strong planning for logistics centers. Factories, empty containers, and ports are scattered in different places, causing transportation costs to increase. Not only that, container parking lots near major ports are also not planned.

Specifically, the case of Cat Lai port is a typical example. According to a report by the United States Agency for International Development (USAID), on average, about 16,400 trucks arrive at Cai Lai port every day, but there is no parking space, causing the roads near the port to always be in a state of serious congestion. Solving the problem of regional connectivity and land planning requires the Government 's participation. Because according to records, logistics enterprises are in dire need of private land funds to develop warehouses at reasonable prices. Even in some cases, land leasing is always an obstacle because real estate brokers always push land prices too high.

Ms. Dorsati Madani, Senior Economist of the World Bank, said that in 2023, global merchandise trade growth will be only a quarter of the forecast in June 2022 and the growth situation in 2024 is also forecast to be not very optimistic. Overall, the economic situation will be gloomy in the coming time when indicators such as fixed income, retail sales are still on a downward trend, at the same time, the rising unemployment rate shows an unstable and uncertain future of the economy.

Container warehouse at Tan Vu port. Illustration photo: Tuan Anh/VNA

Based on the report on Vietnam's export situation in the first half of 2023, it shows a decline of about 12% compared to the same period last year and a sharper decrease of about 18% compared to the same period in 2022. Global demand is weaker than expected, global financial mobilization conditions continue to tighten and the difference in currency positions between Vietnam and developed countries is also increasing.

In addition, the quality of Vietnam’s infrastructure is still behind that of other countries in the region. This could affect its ability to attract foreign direct investment (FDI) as well as its potential long-term growth. According to a survey by the World Economic Forum, although infrastructure quality is considered to have improved through increased investment, Vietnam still lags behind other countries in the region. This survey ranked Vietnam 77th out of 141 economies in the world, lower than China, India, Indonesia, Malaysia and Thailand - the countries with which Vietnam is competing to attract foreign direct investment.

The 2021 Global Infrastructure Quality Index ranked Vietnam 51st out of 184 economies, lower than Indonesia at 28th, Malaysia at 29th and Thailand at 33rd. Highway density is an example of infrastructure quality, currently among the lowest in the region, while road transport costs are among the highest in the region. The lack of investment in infrastructure will limit Vietnam’s ability to attract and retain FDI investors. All of these factors will, of course, be major barriers and challenges for the logistics industry in the near future.

Faced with this situation, Mr. Le Duy Hiep, Chairman of the Logistics Services Association (VLA) expressed his expectation for the cooperation and experience sharing from the WB in the coming time; especially the coordination in implementing the Vietnam Provincial Logistics Competitiveness Index (LCI) project. Accordingly, the LCI index in provinces and cities will help formulate policies to develop the logistics industry in localities, impact on reducing logistics costs and support production development, export and attract foreign investment more effectively in the coming time.

The provincial LCI index shows the competitiveness of Vietnam's logistics compared to other countries in the world. Accordingly, it evaluates indicators on infrastructure, technology in supply chain management and logistics, macroeconomic conditions, skills, product market, labor market, financial system, market size, dynamism in the business environment, innovation, etc. The project is currently being implemented and will announce the results by the end of this year 2023 with the participation of many organizations, state agencies and interested businesses. The project provides measurement indicators to help evaluate the development speed, quality, infrastructure, and policies of provincial and municipal governments in Vietnam.

In particular, the project will provide a general picture of the logistics service industry in provinces and cities in Vietnam; the LCI index will be an effective policy review tool to help state management agencies from central to local levels to formulate development policies and logistics planning in accordance with the economic development characteristics of each locality...

According to VNA/Tin Tuc Newspaper

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