Vietnam logistics industry is highly regarded for its potential and growth room, yet it suffers from low efficiency and a lack of digitalization.
"Vietnam is gradually replacing China as the world's factory, with an increasingly internationalized manufacturing sector and an important link in the global retail chain. However, many stages in logistics operations are still manually executed, reducing business efficiency," Mr. Kim Dongkyun, head of the Smart Logistics Department at Samsung SDS Asia-Pacific.
Vietnam ranks fourth in Agility's 2023 Emerging Markets Index for global logistics opportunities, just behind China, India, and Mexico. This sector is also seen as rapidly growing, with an increase of over 23% from 2020-2022, according to Nextrans.
However, this investment fund also estimates Vietnam's total logistics costs to be high, accounting for about 20% of GDP. Each product has to bear transportation costs amounting to 30-40% of its price. Meanwhile, in the US, South Korea, and Japan, this rate is below 15%. This difference indicates that the logistics sector has much room for improvement.
"The logistics market in Vietnam has not been fully digitalized compared to Europe countries, US, or South Korea, and there are many areas that need improvement as it is very difficult to operate manufacturing sectors without digitalization," a representative of Samsung SDS commented on the weakness of Vietnam's logistics.
The room for improvement through digitalization makes this sector a "fertile ground" for technology companies such as Samsung, Amazon, Alibaba, and domestic ones like Viettel and FPT.
Regarding business operations in Vietnam, Amazon has mentioned that their warehouse operation solutions help retailers save costs when selling abroad. Similarly, Samsung stated that the Cello Square solution developed by Samsung SDS enhances productivity and minimizes risks in the transportation process.
These technology companies leverage their platforms to transition from being customers of the logistics industry to becoming service providers, such as Samsung SDS, Amazon Global Selling, or Viettel Logistics. Mr. Kim Dongkyun believes that digitalization can help reduce inventory age by up to 50%, one of the factors that determine capital tie-up in the system.
Digitalization solutions in logistics are not necessarily dependent on high or special technologies. However, due to the nature of large-scale production and import-export operations, the challenge of digitalization lies in the lengthy period of quality testing, ensuring reliability, and the ability to personalize depending on business needs.
"Whether it's SDS or domestic companies in Vietnam, the cost difference will not be significantly large. In fact, we do not sell Samsung's logistics solutions but share them, so customers do not incur initial system investment costs," Mr. Kim Dongkyun responded when asked about businesses' concerns regarding the cost of digitalizing logistics.
Source: https://zingnews.vn/nganh-logistics-viet-nam-co-muc-do-so-hoa-thap-post1408639.html
Forwarders are warning customers that demand on Asia-Europe ocean trades is beginning to look a lot like the pandemic peak.
A 15-month stretch of growth in the services economy came to an end in April, according to the new edition of the Services ISM Report on Business, which was issued today by...
Forwarders are warning customers that demand on Asia-Europe ocean trades is beginning to look a lot like the pandemic peak.
Global business leaders are increasingly looking to India and Southeast Asia as alternative supply chain destinations while trade relations between China and the US deteriorate
Rates on big lanes out of China mostly maintained positive momentum of recent weeks and months.
Analysts suggest that the "rise" of e-commerce is reshaping the logistics market and creating a more diverse range of assets, most notably urban logistics real estate. Competitive...
Starting June 3rd, 2024, logistics companies, express delivery services, and transportation companies involved in sea, air, and rail freight related to exports from Vietnam...
THE INTERNATIONAL Air Transport Association has reported a continuing strong annual growth in air cargo demand in March 2024.
April was the fourth month in a row that global air cargo demand increased by over 11% but the market has begun to slow down after a busy start to the year, according to analysis...
US containerized freight imports have had a stellar start to 2024, with first-quarter growth of 15% year over year, even with supply chain disruptions in the Red Sea, Panama...
ALS