Vietnamese logistics firms can expect opportunities but also challenges from the EU-Vietnam FTA, and need to make efforts to improve their competiveness.(Photo: VNA) HCM City (VNS/VNA) - Vietnameselogistics companies need to improve their competitiveness to stay afloat whenthe EU-Vietnam Free Trade Agreement (EVFTA) comes into effect, experts havesaid.
Trade between Vietnam and the EUwould increase strongly thanks to the EVFTA, boosting logistics demand, theysaid.
The deal, currently underratification, has a number of commitments in the logistics sector that exceedthose under the WTO.
When it comes into effect, it wouldopen the door wide to EU logistics service providers, who are highlycompetitive, to enter Vietnam, said Nguyen Thi Thu Trang, Director of the VietnamChamber of Commerce and Industry’s WTO Integration Centre.
This would create competitivepressure but also bring capital, new technologies and opportunities forco-operation, she said.
"This is exactly what Vietnam’slogistics industry needs, and is an opportunity to reduce logistics costs.”
Logistics costs in Vietnamaccount for 21-25 percent of the country’s annual GDP, 12 percent of the costof fishery products, 23 percent in the case of wooden furniture, 29 percent forvegetables, and 30 percent for rice, much higher than that in Thailand,Malaysia or Singapore, she said.
Besides, the country's logisticsinfrastructure falls short of requirements, affecting the distribution ofgoods, and thus the competitiveness of Vietnamese goods, she said.
Therefore, the EU trade dealwould be a challenge to the logistics industry but could push it into reformingand improving its competitiveness, she added.
To enable the logistics industryto benefit from the EVFTA, Nguyen Thi Lan Phuong of the Ministry of Industryand Trade’s Department of Multilateral Trade Policy said it needs to clearlyunderstand the commitments under the agreement.
According to experts, to takeadvantage of the opportunities and cope with the challenges from the EVFTA,businesses need to improve their technology and logistics platform and increasedigitisation and human resource training.
According to the VietnamLogistics Business Association (VLA), the country has 4,000 companies involvedin the transportation of goods on domestic and international routes.
Vietnam ranked 39th out of 160countries in the World Bank’s 2018 Logistics Performance Index, a big jump fromtwo years earlier when it was 64th./.
VNA
