Technology application in logistics needs special priority.

As one of the key industries, logistics needs careful investment, especially in the aspect of digital transformation to be able to respond and adapt to the market context.

Most logistics businesses in Vietnam are still in the early stages of digital transformation. (Source: PPL)

Recently, at the Workshop on Promoting Digital Transformation in the Logistics Industry, Deputy Director of the Ministry of Industry and Trade Tran Thanh Hai said that it plays an important role in the entire process from social production, import and export, circulation and distribution to consumption, creating added value and making an increasingly large contribution to promoting the growth of the country's import and export turnover.

In the context of Vietnam's deep integration, active participation in free trade agreements and with economic advantages that always have annual growth momentum, Vietnam's logistics service industry will have many opportunities to develop and participate more deeply in the global logistics supply chain.

According to Mr. Tran Thanh Hai, recently, Goverment Ministries, branches and localities have always paid attention to leading, directing and issuing many mechanisms and policies to remove difficulties, promote the implementation of cost reduction solutions, improve competitiveness and create a favorable environment for the development of the logistics service industry.

Along with the integration process, the development of the economy, the increase in import-export and investment activities as well as the implementation of the Action Plan to enhance competitiveness and develop Vietnam's logistics services by 2025, the Vietnamese logistics industry has also achieved certain results.

The Logistics Performance Index (LPI) in 2023 reached 3,3 points, ranking 43rd out of 139 countries and territories, ranking 5th among ASEAN countries, with a fairly high growth rate of service revenue, reaching 14-16%/year with a scale of about 40-42 billion USD/year. The quantity and quality of logistics services have been improved, making an important contribution to promoting the growth of Vietnam's import-export turnover.

Mr. Tran Thanh Hai said that one of the tasks to improve competitiveness and develop Vietnam's logistics services by 2025 according to Decision No. 200/QD-TTg dated February 14, 2 of the Prime Minister is to: Prime minister The Government is researching and applying new technology, technical advances, and modern technology in management, operation, and training on supply chains to achieve higher quality logistics services. In addition, according to the National Digital Transformation Program to 2025, with a vision to 2030 approved by the Prime Minister, logistics is one of the eight industries that need to be prioritized for digital transformation first.

As one of the key industries, logistics needs to be invested carefully, especially in the aspect of digital transformation to be able to respond and adapt to the market context, maximally supporting the development of other industries. Because, applying technology in logistics will bring many benefits, optimize efficiency, thereby contributing to reducing logistics costs in general for the entire economy, realizing the important goal of any country, especially for Vietnam when logistics costs still account for a high proportion.

At the workshop, experts from the USAID Digital Trade Project in Vietnam introduced the Draft Report “Digital Transformation in Logistics in Vietnam – Current Status and Recommendations” conducted by the Project’s domestic and international expert team to assess the level of digital transformation in the port, warehouse, transportation and last-mile delivery service sectors in Vietnam, and at the same time provide specific policy recommendations.

Based on a survey of the practical application of digital transformation in typical cases of 4 groups of port enterprises, warehouse enterprises, transportation enterprises and e-commerce enterprises, the Report states that with a large market size and high growth potential, digital transformation is an inevitable trend in the logistics industry.

The survey shows that awareness of the importance of digital transformation in logistics enterprises is relatively high. However, most logistics enterprises in Vietnam are still in the early stages of digital transformation. Limited capital, limited investment in resources and budget for digital transformation activities, and lack of qualified personnel are the main barriers for logistics enterprises, especially small and medium enterprises. There are differences between industry groups and types of enterprises. Moreover, FDI enterprises and the last-mile delivery group have a higher level of digital transformation due to advantages in capital, international experience, and market pressure.

Based on the analysis of difficulties, barriers as well as successful lessons, the Research Group proposed solutions to promote digital transformation in the Vietnamese logistics industry based on key pillars such as awareness, resources and methods; in which, emphasizing solutions aimed at State management agencies, logistics enterprises, associations, and commercial production enterprises.

At the macro level, the research team proposes solutions to help create institutions, environments, and market resources that are favorable for digital transformation activities of enterprises. These proposed solutions focus on the role of entities such as state management agencies, logistics associations, and industry associations.

Sharing international experience in digital transformation in the logistics industry, Mr. Trevor O'Regan, international expert, USAID's Digital Trade Project in Vietnam, recommended: Vietnam should develop competitive advantages in the global supply chain with AI, digital trade, logistics and sustainability. Moreover, Vietnam should consider developing high-class Special Purpose Vehicles (SPVs). world to become a leading country in logistics innovation; ensure the application of international standards necessary for digital transformation and e-commerce in Vietnam; research and build a Strategic Investment Fund for Vietnam's green logistics/Vietnam's green logistics startup fund...

In addition, Vietnam needs to focus on developing talent and research such as considering establishing a world-class University and Research Institute specializing in global supply chains with AI, digital trade, logistics and sustainability; education Technical and vocational training in supply chain management and logistics.

At the workshop, delegates discussed good experiences and technology applications in logistics to help businesses take advantage of opportunities to develop the market. Thereby, reducing costs, improving competitiveness and service quality, contributing to gradually developing the Vietnamese logistics service industry and participating more deeply in the global logistics supply chain.

In addition, it points out challenges such as lack of capital and human resources and proposes solutions from international experience as well as Vietnamese practice. The decisive role of enterprises and the application of technology such as artificial intelligence and big data in logistics for e-commerce with a comprehensive view of digital transformation strategy.