Viet Nam targets to reduce logistics costs by 0.5 – 1 per cent of GDP every year. — Photo vneconomy.vn

HCM CITY (Biz Hub) — International logistics co-operation is essential for Viet Nam, especially in the context of global integration and ASEAN Economic Community (AEC), delegates heard at an international logistics conference held in HCM City yesterday.

"According to the World Bank's Logistics Performance Index, Vietnamese logistics ranks fourth in ASEAN and 48th in the world. The infrastructure index has improved in recent years," said Nguyen Nhat, deputy minister of the Ministry of Transport, at the conference.

"ASEAN logistics co-operation began in 2011, and this relationship should deepen in upcoming years so that we can take advantage of the AEC," he said.

To prepare for a more robust and competitive trade environment, the Government has been developing infrastructure for transport and logistics, including 18 national highways linked with ASEAN and a railway system connecting Laos and Cambodia. Local waterways between Thailand and Cambodia have also been improved.

"However, limited legal framework, poor human resources and weak connections among different means of transport, especially railway and sea, and unprofessional and small companies are all challenges for the logistics industry in Viet Nam," he said.

To improve the situation, Nhat suggested that in the future Viet Nam should deploy an infrastructure network for multi-modal transport, build an entrepot system at international ports, establish big multi-modal transport corporations and strengthen administrative reform to promote commodities circulation.

Speaking at the conference, Alvin Chua, chairman of the ASEAN Federation of Forwarders Association (AFFA), presented an ASEAN master plan for achieving overall ASEAN Connectivity through enhanced physical infrastructure development (physical connectivity); effective institutions, mechanisms and processes (institutional connectivity); and empowered people (people-to-people connectivity).

"ASEAN governments must also address non-tariff barriers to facilitate intra-ASEAN trade and investment along with harmonising standards and achieving conformity of assessment procedures," he said.

In the future, the ASEAN master plan will need to upgrade existing infrastructure, build new infrastructure and logistics facilities and harmonise the regulatory framework as well as nurture an innovative culture.

"Viet Nam must pro-actively participate in acceleration of AEC 2015 Integration into the ASEAN Economy," Stanley Lim, chairman of the Singapore Logistics Association, said.

He suggested that ASEAN governments must concentrate on four key pillars: a single market, as trade barriers among nations fall to a minimum; a competitive economic region, fostering a culture of fair competition; equitable economic development by assisting the growth of SMEs, the backbone of ASEAN's economy; and deep integration into the global economy by deleting trade barriers.

"ASEAN logistics will support trade with efficient movement of goods with professionally skilled labour by efficient cross-border of goods through trade facilitation; a single window for speedy customs clearance; human resource development through training in competence logistics skill sets; and connectivity with multi-modal transport," he added.

According to the ministry of Industry and Trade's master plan for logistics, by 2020, the industry will contribute 10 per cent to GDP at a growth of 25 per cent each year and by 2030 the figure will be 15 per cent and 35 per cent, respectively.

"The master plan targets to reduce logistics costs by 0.5 – 1 per cent of GDP every year, equivalent to $1-3 billion, with investment in logistics to grow by 25-30 per cent annually and create jobs for 4-5 per cent of the population," said Tran Chi Dung, deputy director of the Viet Nam Logistics Institute.

The conference was organised by the Viet Nam Logistics Association with participation of ASEAN top logistics experts from 10 nations, government officials and 150 local companies involved in import, export, logistics, forwarding, transport, airlines, ships, sea ports, insurance and consultancy. — VNS