Containers being shipped along the Sai Gon River. — VNA/VNS Photo Thanh Phan

HA NOI (Biz Hub) — Local logistics companies must upgrade their operations to increase their competitiveness in the future as many free-trade agreements (FTA) have been signed, experts said.

Deputy Director of Avina Logistics Joint Stock Company Le Hoang Oanh said the signing of many FTAs, and especially the establishment of the ASEAN Economic Community (AEC) by the end of this year would bring challenges in terms of higher demand on import and export activities as well as investment of foreign logistics firms in Viet Nam, including ASEAN companies.

Foreign companies in Viet Nam would have more opportunities to use the logistics services of companies coming to Viet Nam from their own countries, and would not use local logistics companies as before, Ngo The Hung, deputy director of Thang Loi Logistics Joint Stock Company, said.

That would put pressure on the local logistics firms to compete with the foreign rivals, Tran Huy Hien, general secretary of the Viet Nam Association of Logistics Enterprises, said. He said the local firms must upgrade their logistics facilities and services to improve their competitiveness in the future.

Gemadept, a large logistics joint-stock company in Viet Nam, had invested VND340 billion for building a logistics centre in the Song Hau industrial zone, in the southern Hau Giang Province, to expand its business, the Hai Quan newspaper said.

More warehouses

Meanwhile, Thang Loi Logistics had added VND3 billion to VND4 billion in investment capital to upgrade and seek warehouses in order to have more customers, Hung said.

The company had invested in the development of land transport vehicles to improve transport services from Thailand, Laos and Cambodia to Viet Nam and China, he said, because there would be more trade opportunities under the AEC and transport over land would be cheaper and faster than air or sea transport.

Avina Logistics would also focus on developing land transport services, Oanh said. Her company would improve the staff abilities and management technology, and even co-operate with other logistics firms to increase competitiveness.

However, Hien said almost all local logistics firms would face several difficulties in upgrading their operations and business because they were small and medium-sized enterprises that lacked capital, technology, skilled staff and experience.

To deal with these challenges, according to Hien, the enterprises need to co-operate among themselves and get state support. This support includes policies to help logistics enterprises get loans, and a strategy for improving linked factors such as transport infrastructure and ports and customs procedures to reduce the cost of logistics services. — VNS