Infrastructure and mechanisms are key to reducing logistics costs
On July 4, at the 90th HUBA Businessmen Coffee, Mr. Le Van Danh - Deputy Director of Ho Chi Minh City Department of Industry and Trade, said that logistics is currently identified as one of the five key economic sectors of the city and is also a priority sector in development targets. To promote this sector, Ho Chi Minh City is implementing many groups of solutions.
First of all, it is to complete the multimodal transport infrastructure system including roads, inland waterways, railways, aviation and seaports. A series of key projects such as ring roads, Ho Chi Minh City - Chon Thanh expressway, Ho Chi Minh City - Moc Bai, Ho Chi Minh City - Can Tho, expansion of Ho Chi Minh City - Trung Luong expressway... are being accelerated. It is expected that in the next 5 years, the road transport network will better meet transportation and logistics needs.
At the same time, the city also implements the planning of new railway lines, notably the line connecting Binh Duong with Cai Mep - Thi Vai port cluster. When put into operation, this railway line will significantly reduce transportation costs, shorten time and improve logistics efficiency.
For inland waterways, Ho Chi Minh City is proposing to the Central Government to decentralize management of major channels to proactively invest in and upgrade infrastructure. Meanwhile, the Cai Mep - Thi Vai port area continues to be expanded with many new ports, aiming to become an international transshipment port. When synchronously connected with roads, railways and waterways, this system is expected to make a significant contribution to reducing logistics costs.
In addition to infrastructure, the city identifies digital transformation, green transformation and human resource development as important pillars. Businesses need to promote the application of technology to optimize production, management and transportation processes, while aiming for efficient energy use, emission reduction and sustainable development.
In addition, the city is drafting a Special Urban Law with a proposal to supplement a mechanism for developing free trade zones and integrated logistics centers. These centers will enjoy many preferential policies on taxes, land rent and investment procedures to quickly form a modern logistics network, serving economic growth.
Businesses need to change their thinking to reduce costs
According to Ms. Dang Minh Phuong - Chairwoman of the Ho Chi Minh City Logistics and Seaport Association, the increase in logistics costs stems from many reasons. First of all, geopolitical fluctuations in the world have caused fuel prices to increase, leading to transportation costs. In addition, transport infrastructure has not kept up with economic development, connectivity is not synchronized, and congestion at roads and seaports still occurs frequently.
In addition, businesses also have to bear many incurred costs such as software copyright, technology costs and many other hidden costs. If previously Vietnam's logistics costs were usually estimated at 17-18% of GDP, according to Ms. Phuong, the actual figure now has exceeded 20%, increasing product costs and reducing the profit margin of enterprises.
In the context of the world shifting strongly to sustainable development, digital transformation and the application of artificial intelligence (AI), Ms. Phuong believes that Vietnamese businesses need to change their approach, especially optimizing resources through the sharing economy model.
Accordingly, instead of each business investing in its own vehicles but not operating at full capacity, businesses can share warehouses, vehicles, and distribution systems to reduce costs. This model has been effectively applied by many countries such as Singapore.
Another limitation is that domestic enterprises have not yet exploited outsourcing logistics services well. While most FDI enterprises use professional logistics units to optimize costs, many Vietnamese enterprises still implement the entire logistics chain themselves, making the efficiency not high.
From that reality, Ms. Phuong proposed that businesses gradually switch to multimodal transport, combining roads with waterways and railways; promote the sharing economy; accelerate the application of AI and digital transformation; proactively meet the green standards of the international market; apply the inventory management model by suppliers (VMI) to optimize cash flow and supply chains; and at the same time boldly outsource professional logistics services to focus on core production and business activities.
