Along with the rapid development of e-commerce (E-commerce) in Vietnam with an estimated scale of 13.2 billion USD in 2020, an annual growth rate of 15%, the opportunity for e-logistics in the coming years is not small.
With logistics costs estimated to account for nearly 10% of the revenue of businesses, the sales of electronic logistics activities in Vietnam in the coming years will reach billions of US dollars in the near future.
Electronic logistics (e-logistics) is a relatively new concept not only for people and businesses but also for traditional logistics businesses. Electronic logistics is considered 5PL logistics, ie logistics combined with e-commerce.
Different from the traditional logistics field that specializes in “cutting up salty warehouses” with large orders, electronic logistics has its own characteristics with small orders, large number of orders, many types, fast delivery schedule, etc. requires high precision.
The biggest difference is that while most of the order processing and traditional logistics quotes are done manually, e-logistics requires the implementation of inbound and outbound logistics. fulfillment) is handled by information technology, processes are automated to meet a large number of orders up to millions of orders per day, hundreds of thousands of types of goods, delivery progress within just a few minutes. 1-2 hours.
Playground of the “big guys”
In fact, with the number of logistics, transportation and express delivery enterprises in Vietnam currently up to 30,000, most of them are small and micro enterprises in which 90% of enterprises have capital of less than 10 billion dong. 5% of enterprises with capital of 10-20 billion VND, the ability to participate in the e-logistics supply chain is an impossible task.
In the field of electronic logistics, technology plays an extremely important role. To be able to fully participate in the e-logistics supply chain, businesses must invest millions of dollars in goods sorting lines. With the number of orders up to millions of orders per day, many categories, dispersed in many different delivery locations, if it is not equipped with an automatic goods sorting system, it is impossible to meet the delivery demand and cannot guarantee the delivery of goods. Guaranteed accuracy if manual classification. Many small logistics enterprises currently only process orders and classify goods by manual method, so it is only suitable for small-scale retail businesses with individual categories of goods.
In addition to investing in an automatic goods classification system, businesses operating in the field of e-logistics must also equip additional software for order management systems (OMS), warehouse management (WMS), inventory management, and inventory management. transportation management (TMS), overall management (ERP)… to connect information infrastructures together, in order to provide real-time information, such as looking up information about orders anytime, anywhere . The cost of such synchronous information technology infrastructure investment is also up to tens, even hundreds of billions of dong, which is too big a burden for small and medium logistics enterprises.
One of the major barriers for Vietnamese logistics businesses to participate in the e-logistics field is investing in a warehouse system to manage inventory and store goods. Except for foreign enterprises and some large-scale domestic enterprises that have their own warehouse systems, most of today’s logistics enterprises, if they have a warehousing business, do not have the financial capacity to invest in the system. own warehouse system that must be outsourced and of course logistics costs in the e-logistics chain will not be able to compete.
Electronic logistics requires businesses to have a system of branches, agents, and warehouses widely distributed in the inner city as well as all over the country to ensure coverage of all orders in the fastest time. However, this is a huge challenge for small logistics businesses. In the current Vietnamese market, only large foreign corporations such as DHL, Feedex … or large Vietnamese delivery enterprises such as Viettel Post, Vietnam Post … can meet this demand.
On the other hand, the field of e-logistics requires high-quality human resources to participate in the supply chain because the processing processes in the e-logistics chain involve new technological knowledge, which is much different from the traditional knowledge. Despite traditional logistics methods, Vietnamese logistics enterprises still have a serious shortage of human resources, unable to meet the needs of the market despite having enough financial potential.
Need to change quickly so as not to lose market share
In the face of the rapid and vibrant growth of e-commerce, the Vietnamese government and logistics enterprises need to have a quick action plan so as not to lose market share right at home.
The biggest difficulty of Vietnamese logistics enterprises when participating in the field of e-logistics is investing in information technology systems to meet the needs of e-commerce. Therefore, the Government should spend the budget to mobilize the leading information technology corporations in Vietnam to build and transfer e-logistics management software to Vietnamese logistics enterprises on a free or low cost basis. incentives for businesses to have the opportunity to use and participate in the supply chain of e-logistics.
In addition, the Government needs to have preferential policies on tax, land rent and loan interest to support large-scale Vietnamese logistics enterprises to invest in warehouse systems, goods classification systems, etc. enough to compete with large foreign corporations.
Large domestic delivery enterprises, reputable in the field of delivery for many years, such as Vietnam Post and Viettel Post, need to quickly innovate technology and retrain human resources to be competitive enough. With the advantage of having a network of agents and post offices throughout the country, covering rural, mountainous and remote areas, and a warehouse system invested in delivery activities throughout the country, this is an advantage. The competitive advantage is not small that other competitors cannot have. If they invest in technology and change their management, these leading enterprises can compete fairly with foreign competitors, not to mention have more advantages.
For small and micro logistics enterprises that do not have the conditions to invest in technology or invest in warehousing systems, they can also participate in niche markets, small-scale, and single product categories to serve small businesses. Retail businesses, individuals doing e-commerce business on social networks or mobile application platforms. Operating in such niche markets will be more affordable for businesses because the quality requirements of logistics services for these customers are not too high.
The demand for human resources is an extremely important factor to operate the electronic logistics system. Because this is a new field in logistics activities, requiring higher skills than traditional logistics, it is necessary to train and retrain logistics human resources. This work requires coordination between enterprises in the industry, associations and universities to provide a complementary knowledge base for human resources in the e-logistics industry, to meet the increasing development needs of the e-logistics industry. branch.