Covid-19 pandemic - A strong catalyst for the re-positioning of logistics businesses

Nguyen Tuong, Deputy General Secretary of the Vietnam Logistics Business Association (VLA)

The Covid-19 pandemic had a significant impact on logistics businesses due to the disruption of global supply. However, it is also an opportunity for businesses to "transform". Could you please give further information about this?

The logistics market is attracting more than 4,000 businesses, mainly concentrated in Hanoi and Ho Chi Minh City, including about 30 enterprises providing transnational logistics services. When the pandemic broke out, the reduction in the number of orders and revenue has become a problem for logistics businesses.

However, this is also an "opportunity" for businesses to transform, restructure and take advantage of digital technology to create big changes in their output and productivity. This makes traditional logistics businesses faster and there is only one way that is overcoming difficulties to restructure the business, thereby positioning the business in the industry.

It is time to look back at the service platforms of the logistics businesses and look at opportunities for improvement: how businesses can respond to unexpected situations during their operation, or whether there is any potential for e-commerce. This is not only a temporary solution but also a development trend of logistics. Obviously, logistics for e-commerce is a huge opportunity for current businesses.

Has the Covid-19 pandemic created an opportunity for digital transformation? How do you evaluate the fact that logistics enterprises take advantage of this context to overcome immediate difficulties and make long-term development steps?

- Although the digitization trend in logistics has been taking place for a few years, it has really accelerated during the Covid-19 pandemic. Logistics enterprises have many different service segments, so they have different approaches, because many units are now applying independent applications for each service segment. Setting up e-commerce platforms and deploying electronic order solutions will bring opportunities for businesses in the context of the Covid-19 pandemic.

The EVFTA is expected to bring many advantages to the logistics industry, being an important growth engine after the Covid-19 pandemic. In your opinion, what do businesses need to do to realize this?

- It must be said that the EVFTA is a great opportunity for the logistics industry to develop after the Covid-19 pandemic. The agreement is a boost to Vietnam's production and import and export activities. As the production and import-export activities develop, the development of the logistics industry will follow.

The EVFTA will expand the freedom of service delivery, offering logistics businesses many opportunities for growth. The tasks that global transportation and forwarding corporations do not do when entering the Vietnamese market will be opportunities for Vietnamese businesses, especially services such as domestic transport, forwarding and customs procedures.

Additionally, the commitment to eliminate tariffs for vehicles, machinery, and technological equipment for logistics activities from the EU is a good chance for domestic logistics firms to buy products at reasonable prices, save production costs, improve technology capacity, increase self-implementation capacity, and reduce outsourcing services.

The opportunities that the EVFTA brings to the logistics industry are great but not for every unit, because they always go hand in hand with huge challenges. These opportunities will force Vietnamese logistics enterprises to innovate, promote reforms and improve their own competitiveness in the context of deep international economic integration.

Undoubtedly, European logistics firms have much higher qualifications and stronger capital than Vietnamese units. Therefore, it is difficult for Vietnamese enterprises to gain orders, especially when international manufacturers and investors have links with logistics service providers in the EU, while Vietnamese exporters mainly export FOB. If every small opportunity is not exploited, Vietnamese businesses are not able to gain advantages.

To grasp these opportunities, members of the association have constantly expanded relations with EU partners such as Spain, Germany and the Netherlands. Simultaneously, they attach importance to developing technology, improving the quality of human resources to have the best "anticipation" as soon as the Covid-19 pandemic is completely controlled.

Thank you, sir!