Are logistics companies ready for the TPP?

Thursday, May 26, 2016 09:57

The Trans-Pacific Agreement has been signed and it promises growth opportunities for all 12 members. Trade is forecast to surge, requiring solid preparations by companies in logistics and port operations. Viet Nam News reporter Thu Ngan asks business executives how their companies are preparing and what Vietnamese companies should do to integrate successfully.

Tran Khanh Hoang, Executive Vice President of Sai Gon New Port Corporation

Tran Khanh Hoang

TPP and free trade agreements offer Viet Nam many advantages in developing its trade and economy thanks to the increase in foreign trade, which I predict will increase by at least 15 per cent.

Meeting the sharply increasing demand while also reducing logistics costs is both an opportunity and challenge for Vietnamese ports and logistics companies.

The biggest weakness of the Vietnamese logistic industry is its small size and lack of connectivity. In my opinion, to successfully integrate, companies should enhance co-operation with each other and improve their capacity by studying the TPP.

As the leading port company in Viet Nam, Sai Gon New Port Corporation has been preparing well to utilise the chances arising from TPP. We have focused on developing our three pillars — ports, logistics and domestic marine shipping services.

Our company has a network of 16 seaports located in all regions of the country.

In the Mekong region, we have developed barge ports on the Tien and Hau rivers.

In the south, Sai Gon New Port Corporation focuses on developing ports in the Cai Mep area in Ba Ria – Vung Tau Province, which can handle 14,000 TEU vessels. Meanwhile, international vessels have become bigger. So our corporation is working with the Ministry of Transport and Ba Ria – Vung Tau authorities to upgrade the ports in this area to berth 18,000 TEU vessels.

In HCM City, two feeder ports have been built and developed. Of them, Cat Lai Terminal, is the biggest port in the country. Last year 4 million TEU of products arrived at this terminal. I think the volume will increase this year.

Phu Huu Port in District 9 will be expanded and put into operation in June.

To meet the increasing demand, besides upgrading existing ports by investing in terminal operating systems, we have plans to build new ports.

In the middle of this month ground was broken for the Hai Phong International Port. The construction will be finished in two years.

When put into operation in May 2018, the port can handle 14,000 TEU vessels, becoming the biggest deep-water port in the north.

Our Tan Cang Logistics has been able to supply all services. With a modern port system and a fleet of modern vehicles, we believe we can meet all demands.

Domestic marine shipping services are being strongly developed. Four medium-sized container vessels of 700 TEU each are connecting ports in all three regions — north, centre and south.

Container barges are also used to connect Phnom Penh in Cambodia with Cai Mep.

In addition, we have set up close co-operation with local authorities and customs so that we can help our customers save time and cost on administrative procedures.

Nguyen Duy Minh, General Secretary of the Viet Nam Logistics Business Association (VLA)

TPP will bring huge opportunities to the Vietnamese logistics industry because the volume of imports and exports will increase.

However, there will be fierce competition as more and more international logistics companies are coming to the country.

To be more competitive, domestic logistics companies should improve their human resources and training.

They should also strengthen co-operation among themselves and enrich their knowledge about TPP, which they can do by attending conferences.

Regularly speaking with exporters and importers, especially of garment, footwear, seafood, agriculture, and wooden furniture is highly recommended.

To support its members, the VLA has organised many conferences to discuss solutions and provide opportunities for co-operation.

Five conferences will be held in Da Nang and HCM City. There will six other conferences in the north focusing on issues like e-commerce logistics and how to improve logistics services.

Many programmes offering members the chance to compare notes with companies in regional countries will be organised.

Training programmes to improve members' awareness of new trade agreements will be held.

The association will this year develop a code of professional conduct for logistics services providers.

Other tasks the VLA will continue to focus on this year include developing logistics in the Mekong Delta, improving the capacity of Cai Mep Thi Vai Port and co-operating with partners to develop training and transportation across borders.

Nguyen Thi Ha Giang, General Director of Maersk Line Vietnam Ltd

I think logistics companies should make strategic investments in technology and fully utilise the benefits of e-commerce to improve efficiency, which is the key to success in this dynamic industry. Direct cargo delivery to terminals in Vung Tau should be built as this will cut down transportation lead time and enable faster speed to market.

We greatly appreciate the Vietnamese Government's strong commitment to greater transparency and compliance to facilitate trade growth. It is working closely with local and international enterprises to help us prepare for aggressively growing our business once the TPP is finally implemented.

As a leading company in containerised ocean transportation, our company is well prepared for the TPP.

Firstly, we further enhanced our products by adding a direct service from Vung Tau to the US's east coast in April, offering the fastest transit time in the market. Together with our existing direct service to the US's west coast, this marked our complete direct coverage between Viet Nam and the US.

Secondly, local networks across Viet Nam are consistently reviewed and improved to respond to our customers' expectations of faster transit times.

Thirdly, together with our US colleagues, we act as a bridge between Vietnamese shippers, exporters and importers and their customers in the US who share the same interest in growing their business opportunities in Viet Nam.

Last but not least, we continue to invest in e-commerce solutions to offer a unique exciting customer experience when shipping with Maersk Line. More importantly, those initiatives will result in more cost savings for our customers through improving productivity and ease of doing business. — VNS

Comments (1)

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pham van long - Friday, 25/03/2016, 16:03 Reply | Like