Technological advances drive innovation and efficiency in logistics

In the context of logistics increasingly becoming an important link in the supply chain and e-commerce, many businesses have pioneered the implementation of high-tech application solutions, especially free home pickup service for even just one order.

Faced with this trend, a reporter from the Industry and Trade Newspaper had an interview with Economic Expert - Associate Professor, Dr. Nguyen Thuong Lang to clarify the benefits, challenges and risks related to the modern logistics model, from optimizing costs and operations to improving customer experience and business competitiveness.

*Economic Expert - Associate Professor, Dr. Nguyen Thuong Lang.*

Benefits of the free pickup model

- Sir, what do you think about the trend of logistics businesses implementing free door-to-door pickup for even just one order?

Associate Professor, Dr. Nguyen Thuong Lang: In my opinion, technological progress in the logistics sector is an important step forward. It is associated with the need to save costs, save time, optimize delivery processes, optimize operations and the way businesses interact. By doing so, technology, when announced and responded to by businesses, will meet real needs and will certainly tend to spread throughout the logistics industry. Businesses that go first will create advantages in costs, higher and faster optimization processes, and at the same time increase operational efficiency.

Therefore, with the rapid application of technological advances, its spread will be huge. Enterprises should have a strategy to anticipate and approach promptly, even right after the research and development is completed, without needing too much time for testing. It is also important to boldly ask customers for feedback to help evaluate the level of improvement in service quality.

This approach also provides peace of mind to customers, as their shipments will not be interrupted, delayed or delayed, thereby increasing the number of orders. This means promoting the transit of goods, thereby improving the operational efficiency of the production chain, supply chain or economic chain. As a result, both logistics enterprises, service-hiring enterprises and product-supplying enterprises benefit.

- Is the free pick-up policy economically sustainable when compared to the current market's last-mile fee problem?

Associate Professor, Dr. Nguyen Thuong Lang: Compared to this problem, the fee that customers pay for the final station of the current market, in my opinion, the last mile logistics perspective is a very progressive approach and has been widely applied by logistics companies around the world . Up to now, the method of fulfilling two orders but only charging the cost of one order is a promotional and demand-stimulating method, and at the same time an effective competitive tool. I think this is one of the tricks to make the market more vibrant, while also encouraging suppliers to find sharper competitive tools.

On the other hand, when using the service, consumers will feel respected and their value is enhanced. In other words, customers are really king, and service providers also seek to come up with smart models that bring real benefits. As a result, the connection between the two sides is strengthened, the market becomes more dynamic, and competition will promote innovation. Innovation in turn leads to cost reduction and the development of smarter models. I think this is a very good, progressive way of doing things and is in line with the trend of the market economy.

Risks, challenges and cost optimization problems

- What do you think are the main economic risks of this model?

Associate Professor, Dr. Nguyen Thuong Lang: In my opinion, all high-tech, fast-implementation models always come with certain risks. The first risk comes from the customer. For example, customers can change their minds: one person places two orders but only takes one, another places three orders but only takes one… In the context of price competition, this can easily lead to dumping. I think this is very normal.

*Technological advancement in the logistics sector is a major step forward. Illustration photo*

The second risk is technological risk. Corporations that do not keep up with technological advances will become obsolete, be pushed out of the market, or even cease to exist. This is the process of forming and developing a business, and this risk is market risk.

The third risk is related to technology, specifically information security. New technology can lead to the problem of customer or payment information being leaked, especially if security technology is not developed quickly enough. This can create risks for both parties.

However, I believe that all these risks, once detected, can be promptly resolved. Today, with technological advances, innovation, especially in the digital technology field, and the application of artificial intelligence and fully automated models, I believe that these risks will be significantly reduced.

- In your opinion, in the context of price competition, what is the decisive factor for a business's success and how should a business consider profit and scale?

Associate Professor, Dr. Nguyen Thuong Lang: In my opinion, that game is essentially still a game; the so-called price reduction is essentially a race to reduce prices and costs. I think that the businesses that can maintain an acceptable profit margin, or at the lowest level but for the longest time, will certainly win.

There are businesses that accept losses to wait for large scale. I think the risk in this case is often very high, so they must have a problem of optimizing costs, and especially ensuring their profit margin at the lowest, lowest level. But in the long run, if they achieve large scale and attract a large number of customers, the low profit at the beginning will be offset by large output. I think these two factors must occur simultaneously to create specific numbers. If they only accept one of the two extremes, the business may not be successful: Accepting zero profit but large scale is also insignificant, or small scale but high profit but high price, not competitive. Therefore, the problem now is to optimize the scale of the business.

Comment (0)