CHALLENGES FOR VIETNAM LOGISTICS MARKET IN 2016

Julien Brun, General Manager of CEL Consulting, said the current logistics market is highly fragmented. Thousands of logistics services companies are now currently providing only a few simple logistics operations and cannot generate added value for logistics chains. A supply chain is made effective or ineffective depending on connections of different points and operations on strings, and also depends heavily on interface.
 
He cited that in ice cream chain in Vietnam, shipping companies only care about how to keep their vehicles refrigerated en route, cold storage companies only care about products inside their facilities, and none is responsible for keeping it cold when it is conveyed from cold storage facilities to vehicles or from vehicles to cold storage facilities. As a result, product quality is affected.
 
In major cities like HCM City, logistics challenges come from more and more products on the market, more and more points of sale and distribution agents in operation, smaller and smaller order values, and more and more vehicles of various scales in operation. Major challenges of current logistics operations are traffic congestions.
 
Two vital factors for good governance in any particular logistics are the storage of goods and the circulation of goods. Three top criteria in logistics management in general are rapid speed, guaranteed trust and low cost. Thus, to facilitate logistics development in Vietnam, it is necessary to develop core elements to succeed in both hardware and software.
 
Core elements for hardware success are logistics infrastructure, including developing and consolidating port system capacity to receive bigger ships and handling and transporting equipment at ports. Other tasks include expanding the capacity of ports and enhancing the effectiveness of port operations.
 
Core elements for software success comprise clear and rapid clearance. Singapore is a leading port operator with a lot of effective operation and clearance processes for us to learn.
 
In addition, exporters should also create added values for their products rather than sell raw materials or simply processed products as now. Then, logistics will add values to imports and exports.
 
In the coming time, logistics needs to ensure conditions and product quality from factory to end-consumers. Future logistics must certainly increase visibility into the status of goods in real time (anytime, anywhere) by using big data and real-time tracking applications. Packaging will also need innovative solutions to protect goods during the time of logistics operations.
 
In the coming time, the market will witness many logistics solutions and apply new technologies like crowd-sourcing to synthesise small resources together to provide solutions to one kind of work. Crowd-sourcing logistics will probably change the picture logistics elements in the coming time.
 
Finally, to develop logistics in the future, business leaders need strategic visions and cooperate with partners in the entire logistics value chain to achieve a greater benefit and value.

Source: VCCI