Bui QuocNghia, director of the institute, said that Vietnam had become a global manufacturing and processing hub by signing more free trade agreements (FTAs) in recent years.
Last year, the volume of exports going through the country’s seaports reached an estimated 427 million tons. The volume is expected to hit 470 million tons this year and about 560 million by 2020.
Mr. Vo Tan Thanh, Director of the Vietnam Chamber of Commerce and Industry (VCCI) in HCM City, spoke at the seminar that FTAs would lead to an increase in both imports and exports, furthering the need for professional logistics services.
Enterprises from mainland China, Taiwan, Japan and the US in recent months have visited Vietnam to seek investment opportunities in a bid to take advantages of FTAs, he said.
According to the director of institute, local enterprises are also implementing restructuring to improve competiveness both in domestic and foreign markets, increasing demand for logistics services.
In recent years, the logistics sector has been growing at a rate of more than 20 percent per year.
The director also made remark that foreign players, however, dominate the market, particularly the international transportation segment, with 80 foreign logistics firms accounting for more than 70-80 percent of market share.
The country has nearly 2,000 domestic companies involved in the logistics sector, yet most of them are small- and medium-sized and lag behind their foreign counterparts in resources, human resources, management and IT use.
The domestics companies account for a modest ratio of total market share, he said.
According to experts, most Vietnamese enterprises usually sign import contracts under the Cost, Insurance and Freight (CIF) form, and export contracts under Free on Board (FOB). As such, the majority of these goods are transported through foreign shipping companies.
Mr. Bui QuocNghia said the logistics industry still has underdeveloped infrastructure and a shortage of qualified human resources, as well as high costs.
In recent years, the Government has invested more in infrastructure to improve freight transport, the seaport network and logistics services.
However, the poor connection between infrastructure and commodity centres has led to high logistics costs in Vietnam compared to other countries like Thailand and China, he said.
The legal and institutional framework for logistics is also complex and in need of closer coordination between agencies.
He said the Government should devise a national strategy for development of the logistics industry.
Delegates at the seminar agreed that the Government should create a legal framework that would help to standardise services, upgrade infrastructure and improve the quality of human resources.
Domestic logistics enterprises should also work together to better compete with foreign players.
Mr. Vo Tan Thanh, the director of VCCI in HCM City, said that Vietnamese logistics firms must improve their competitiveness to expand their market share, particularly in an era of international integration.
However, in order to do that Vietnam is in need of over 995 trillion VND (44.6 billion USD) to upgrade the national transport infrastructure in the next five years.
The requirement was expressed by Deputy Minister of Transport Nguyen Hong Truong at a meeting on May 19 outlining upcoming tasks for the transport sector between 2016 and 2020.
Mr. Nguyen Hong Truong said the capital would be raised from the State budget, official development assistance (ODA) as well as from Government bonds.
The first major tasks include building more than 1,500 km of expressway throughout the country and upgrading the north-south railway in an effort to raise the average speed of passenger trains from 80km per hour to 90 km per hour; and freight trains from 50km per hour to 60 km per hour by 2020.
The ministry would demolish all houses or building works encroaching on railway safety corridors in the localities of Hanoi, HaiPhong, Da Nang, HCM City and Dong Nai during this time, he said.
The total capital needed to implement these plans is estimated to be about 227 trillion VND (10.2 billion USD).
The second task would be to target infrastructure around a range of international airports including Noi Bai, Tan Son Nhat, Da Nang, Can Tho, and Cam Ranh and mobilize capital to construct the Long Thanh International Airport, expected to be built in southern Dong Nai Province, he said.
Upgrades werealso planned for main inland waterways connecting the Mekong Delta with HCM City, and other routes in the rivers of Tien, Hau, Hong and Thai Binh, he added.
Also at the meeting, Mr. Nguyen Hong Truong pointed out the achievements of the sector between 2011 and 2015.
In a report announced by the World Economic Forum late 2015, the Global Competitiveness Index’s Transport Infrastructure Sub-index ranked Vietnam 67th out of a total 140 countries. The rank is 36 levels higher than in 2011.
The raise in position was thanks to the re-structuring of the transport sector, the building of many major expressways and bridges, and the improvement of rural roads across the country, the ministry said.
Statistics from the ministry showed more than 300 important works have been completed during that time, for example, the Noi Bai - Lao Cai Expressway, HCM - Long Thanh - Dau Giay Expressway, Hanoi - Thai Nguyen National Highway No 3, Nhat Tan Bridge and Dong Tru Bridge.
The highlighted works help to shorten travel time and save money for road users. It also raises the domestic transport-infrastructure quality index, the ministry said.
This year, the ministry has asked to the Government to invest additional capital of 10 trillion VND as counterpart funds for ODA ongoing transport projects.
