The National Digital Transformation Program to 2025, with a vision to 2030, has clearly stated eight priority areas for digital transformation, including the logistics industry.
* The logistics service industry is facing digital transformation opportunities
The logistics service industry plays an essential role, is a spearhead service industry with high added value, as a foundation for trade development, contributing to improving the competitiveness of the economy.
According to the Vietnam Association of Logistics Service Enterprises, the growth rate of the logistics industry in Vietnam in recent years has reached about 14%-16%, with a scale of about 40-42 billion USD/year.
Currently, Vietnam logistics market has the participation of about 3,000 domestic enterprises and about 30 enterprises providing transnational logistics services, with big names, such as: DHL, FedEx, Maersk Logistics, APL Logistics , CJ logistics, KMTC Logistics…
Logistics enterprises are small and medium sized, of which 89% are Vietnamese enterprises, 10% are joint venture enterprises and 1% are 100% foreign owned enterprises.
In the face of competition and the explosion of the digital economy, along with increasingly fast e-commerce, especially under the pressure of the COVID-19 epidemic, logistics businesses have been somewhat aware of the problem of pushing accelerate digital transformation and apply technological achievements to business activities to increase economic efficiency, as well as optimize in production and product supply chains. Digital transformation really becomes imperative for businesses in the industry to overcome difficulties and accelerate development.
According to experts, in 2020, the hottest keywords are digital transformation and COVID-19, both related to logistics.
Social distancing makes people stay at home, but goods, on the contrary, are transported everywhere thanks to logistics services around the globe.
Besides, according to the Vietnam Association of Logistics Service Enterprises, the ratio of logistics costs to Vietnam’s national GDP is 18% of GDP, while this figure in developed countries is only 9-14%. Of the total logistics costs, transportation costs account for 60%, loading and unloading costs account for 21%, warehousing costs account for 12% …
Vietnam’s logistics costs are still quite high compared to other countries, such as China, Thailand, Japan and the EU due to limitations on seaport infrastructure associated with post-port services; The planning of logistics infrastructure, including seaports, inland ports, logistics centers, depots, parking lots for trucks and containers, has not been effective. Therefore, the application of digital technology is a necessary requirement to cut costs.
* Connecting supply and demand – digital transformation problem for logistics
According to the data of the Vietnam Association of Logistics Service Enterprises, currently, Vietnamese logistics enterprises are providing from 2 to 17 different logistics services, of which mainly forwarding, transportation and warehousing services. goods, express delivery and customs declaration. 50%-60% of businesses are applying different types of technology, depending on the size and nature of services of each business.
The effectiveness of the application of information technology in logistics has been proven in practice. For example, Saigon Newport Company, after successfully applying advanced production management and management programs, the company has reduced 55% of the time the ship is in berth; 3/4 reduction in delivery time; 60% reduction in cases of unsafety at work, traffic safety…
Similarly, Vietnam Post Corporation is building a Vmap map platform and a real-time address database for positioning, address data, and assigning codes to addresses to households.
The postal address code platform is capable of digitizing and locating the exact location of customers’ addresses to provide information for businesses in industries, fields and services that need to “find” customers.
This solution contributes to optimizing the transportation and delivery of goods from senders to recipients of postal, transport, logistics, e-commerce businesses, etc. to improve production efficiency, reduce costs and increase enhance the competitiveness of enterprises.
However, digital transformation in this field is facing many challenges. According to Mr. Nguyen Tuong – Deputy General Secretary of the Vietnam Association of Logistics Service Enterprises: most of the problems “obstructing” the movement of the logistics industry are old diseases that have been mentioned many times, such as: operational efficiency. there are many limitations, lack of connectivity in the system; service quality is not high while logistics costs are “higher than the world average”.
High technology application in the services provided has not met the requirements. About 40% are basic solutions and not many businesses apply highly integrated software…
Besides the limitation of initial investment finance (because about 97% of small and medium enterprises), it is difficult to choose the right technology for the service activities of each enterprise. Along with that is the psychology of not really believing in technology and the habit of “afraid to change” of businesses.
From the perspective of the management agency, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade) said that, with the central position of the supply chain, digital transformation in logistics will have the effect of “stimulating activate” the digital conversion of many other components.
According to experts, the future of smart logistics does not lie in single improvements, but requires overall strategies and plans, with the participation of technology and cloud computing. This transformation helps businesses and logistics services to better serve customers, control information flow and optimize automation according to the customer’s order.
Regarding the situation that Vietnam’s logistics costs are still high, according to Mr. Nguyen Hoang Long, Deputy General Director of Viettel Post Corporation, to reduce this cost needs 3 factors. Planning and support from the Government, it is necessary to build large national logistics centers, in which tax, land and wharf costs must be preferential. Optimizing the transport of enterprises, currently 70% of trucks are empty for the return trip, so applying technology to optimize management and reduce costs is something that businesses need to actively invest in, Mr. let me know.
In addition, businesses need to link together, the Government also needs to link businesses, in which businesses with a large foundation and center are associated with small businesses to take advantage of resources. resources of each enterprise.
In order to overcome the habit of “afraid to change” of enterprises, experts and managers believe that, in addition to the determination and concentration of investment resources of the enterprise, there should be cooperation between the shippers and the suppliers. logistics service providers; At the same time, it is necessary to have the support of the State in the reform of related administrative procedures, and to support capital in possible conditions, especially for enterprises taking the lead in digital transformation./.