Viet Nam's upcoming accession to the World Trade Organisation (WTO) will offer a big opportunity for the development of logistics services in Viet Nam, Deputy Trade Minister Luong Van Tu said.
However, Tu noted that the WTO entry will also provide many difficulties and challenges for local logistics service providers.
According to agreements reached during the negotiations for WTO entry, Viet Nam has agreed to allow foreign businesses to establish joint ventures in the areas of transport, freight forwarding, and warehouse services.
Under the agreements, the JVs must have an investment capital contribution ratio of 49-51 percent. After operating for five to seven years, the JVs can be converted into 100 percent foreign-owned companies.
Nguyen Hung, the Vice Director of the Southern Warehouse and Freight Company, said that many local and foreign freight forwarding and warehouse companies have been established here. At present, there are around 600 logistics businesses in Viet Nam, which are creating thousands of jobs.
According to the Japanese Institute of Nomura, these businesses have met around 25 percent of the local market demand. However, it predicted that the logistics sector would become an important economic sector in the near future, capable of contributing up to 15 percent of the national GDP.
At a seminar on "Development of logistics services - opportunities and challenges" convened in Ho Chi Minh City recently, businesses shared the view that weak and incomplete infrastructures and small-sized and scattered warehouse systems have hindered the growth of logistics services.
Though container sea ports and airports in Viet Nam have been planned for long-term development and roads have been upgraded and expanded, transport systems still remain inadequate, directly inhibiting the operation of logistics services.
On the other hand, small and medium-sized freight forwarding businesses, have not yet formed an association to help promote their businesses.
To help them become more competitive in the integration process, Vu Xuan Phong, Secretary General of the Viet Nam Freight Forwarders Association (VIFFAS), said the State needed to create a liberal and easily understood legal framework for the logistics sector to operate in.
In addition, the State should invest in upgrading infrastructure facilities, establishing distribution centres in major economic regions for exports and imports, and especially in developing a competent workforce for the logistics sector.
For its part, VIFFAS should become more involved in protecting the interests of its members, particularly in training, creating links, providing information, coordinating and directing its members to help them access foreign markets.