Some recommendations to reduce national logistics costs in Vietnam

Nội dung text: Some recommendations to reduce national logistics costs in Vietnam

1. Some recommendations to reduce national logistics costs in Vietnam Tran, Nguyen Hop Chau1 - Luong, Van Dat1 1 International Business Faculty, Banking Academy of Vietnam Ngày nhận: 30/03/2021 Ngày nhận bản sửa: 25/05/2021 Ngày duyệt đăng: 09/06/2021 Abstract: Logistics is an important service sector in the overall structure of the national economy, playing the role of supporting, connecting and promoting socio- economic development of the country as well as each locality. By using the method of analysis and synthesis, this paper examines the logistics costs in Vietnam during the period from 2014 to 2020, based on the data obtained from literature in the past and some international reports on logistics costs. According to several World Bank’s reports on logistics costs and the Logistics Report of the Ministry of Industry and Trade (MOIT, 2020), logistics costs as a percentage of GDP in Vietnam is still high compared to many countries in the world. Reducing logistics costs becomes a strategic solution to reduce business costs and increase competitiveness for the Giảm chi phí logistics tại Việt Nam Tóm tắt: Logistics là một ngành dịch vụ quan trọng trong cơ cấu tổng thể của nền kinh tế quốc dân, có vai trò hỗ trợ, kết nối và thúc đẩy phát triển kinh tế - xã hội của đất nước cũng như của từng địa phương. Bằng việc sử dụng phương pháp phân tích và tổng hợp, bài báo nghiên cứu chi phí logistics ở Việt Nam trong giai đoạn 2014-2020, dựa trên số liệu thu được từ các nghiên cứu trước đây và một số báo cáo quốc tế về chi phí logistics. Theo một số báo cáo của Ngân hàng Thế giới về chi phí logistics và Báo cáo Logistics của Bộ Công Thương (MOIT, 2020), chi phí logistics tính theo phần trăm GDP ở Việt Nam vẫn còn cao so với nhiều nước trên thế giới. Giảm chi phí logistics trở thành giải pháp chiến lược nhằm giảm chi phí kinh doanh và tăng khả năng cạnh tranh cho quốc gia nói chung và doanh nghiệp nói riêng (United Nations, ESCAP, 2002); và đây là cơ sở để hoạch định các chính sách quốc gia, phát triển và xây dựng cơ sở hạ tầng (Farahani et al. 2009, 58). Tuy nhiên, việc giảm chi phí logistics có thể ảnh hưởng đến doanh thu của các doanh nghiệp logistics Việt Nam, do đó, bài báo đưa ra một số giải pháp nhằm giảm chi phí logistics tại Việt Nam theo hướng nâng cao hiệu quả hoạt động logistics. Từ khóa: chi phí, logistics, LPI, Việt Nam Trần Nguyễn Hợp Châu Email: chautnh@hnvh.edu.vn Lương Văn Đạt Email: datlv@hvnh.edu.vn Khoa Kinh doanh quốc tế, Học viện Ngân hàng Tạp chí Khoa học & Đào tạo Ngân hàng © Học viện Ngân hàng Số 229- Tháng 6. 2021 36 ISSN 1859 - 011X
2. TRẦN NGUYỄN HỢP CHÂU - LƯƠNG VĂN ĐẠT country in general and businesses in particular (United Nations, ESCAP, 2002); and this is the basis for making national policies, developing and building infrastructure (Farahani et al. 2009, 58). However, reducing logistics costs can affect the revenue of Vietnamese logistics enterprises, so this paper provides some solutions to reduce logistics costs in Vietnam in the direction of improving efficiency of logistics activities. Keywords: Costs, Logistics, LPI, Vietnam 1. Introduction prise of 16.8% in Vietnam and of 12.7% in the Asia-Pacific region (MOIT, 2020). Logistics is an important service sec- This rate of Vietnam is higher than the tor in the overall structure of the national region, showing that the logistics costs economy, playing the role of supporting, incurred by Vietnamese enterprises are connecting and promoting socio-economic higher than the average logistics costs that development of the whole country as well counterparts in the region have to spend. as each locality. Nowadays, the scope of lo- On the other hand, the majority of import- gistics has extended beyond the traditional export companies in Vietnam have to use framework of logistics operations, which transportation services (especially in sea not only includes warehousing and freight transport) provided by foreign logistics forwarding, but also covers production enterprises, because Vietnam currently has planning, supply chain management of raw almost no container fleet. Vietnam-owned materials/semi-products/finished products container ships are in charge of about from the point of suppliers to the point of 10% of the market share of transportation end users. Logistics creates the connection services and mainly provide services on in the whole society by introducing opti- short-haul routes like China, Japan, South mal solutions, reducing transportation and Korea and Southeast Asia (MOIT, 2020). storage costs. The development of special- Only a few Vietnamese bulk carriers have ization and globalization in production and transported cargo on the European routes. consumption is promoting international Thus, most of the logistics expenses that logistics. The ability to provide logistics Vietnamese businesses spend fall into the services effectively is not merely an evalu- pocket of foreign logistics enterprises, ation criterion among enterprises, but is instead of contributing to Vietnam’s GDP. leveraged to become one of the factors of As a result, the Government of Vietnam assessing national competitiveness. Reduc- has many strategic plans such as the Ac- ing logistics costs becomes a strategic solu- tion Plan for improvement of competi- tion to reduce business costs and increase tiveness and development of Vietnam’s competitiveness for the country in general logistics services by 2025 in Decision No. (United Nations, ESCAP, 2002); and this 200 /QD-TTg dated 14/02/2017, including is the basis for making national policies, the goal of reducing logistics costs in the developing and building infrastructure direction of improving logistics perfor- (Farahani et al. 2009, 58). mance in Vietnam. According to the 2020 Vietnam Logistics By using the method of analysis and syn- Report, the logistics costs in 2018 com- thesis, the authors examine the logistics Số 229- Tháng 6. 2021- Tạp chí Khoa học & Đào tạo Ngân hàng 37
3. Giảm chi phí logistics tại Việt Nam costs in Vietnam during the period from a business perspective or from a national 2014 to 2020 based on the data obtained perspective. For businesses, logistics costs from literature in the past and some are collected to serve internal purposes international reports on logistics costs. (e.g. calculating costs, making manage- Specifically, in the study of Karri Ranta- ment decisions), or external purposes (e.g. sila & Lauri Ojala (2012), knowledge and competitive advantage, calculating taxes), data on the country-level logistics costs and are usually measured as a percent- worldwide was discussed. On the project age of sales/total costs/selling prices. This conducted by Advance Logistics Group calculation cannot be stereotyped when Consulting (ALG Consulting) of World calculating logistics costs at the coun- Bank, the goal is to support businesses and try level. The data and methods used to farmers to gain market access in the Me- measure logistics costs at the firm level kong Delta River by reducing geographi- do not provide sufficient information for cal and institutional obstacles in transport- estimating national logistics costs (Karri ing goods on the main routes in the region Rantasila & Lauri Ojala, 2012). Within (Ministry of Transport, 2014). Another the scope of this paper, the authors focus significant research on logistics costs is on the national logistics costs. Currently, implemented by MOIT (2019), which there is no set of criteria to measure this gives some policies for the government cost that are widely accepted and used and solutions for businesses to improve worldwide. Therefore, there are various logistics costs in Vietnam. In addition, different perspectives on national logistics there are some international reports inves- costs from the viewpoints of researchers/ tigating the logistics industry in Vietnam organizations/countries. such as the report of Yin et al., (2019) and In the Logistics Report of MOIT (2020), the 2020 Vietnam Logistics report issued “national logistics costs are the total costs by MOIT. From these, the authors have that businesses (including all business identified reasons why Vietnam’s logistics entities in economy) spend on logistics costs are higher than the costs of many activities, which include many different other countries in the world, and have categories depending on the formulas given some recommendations to reduce method of each country, for example: logistics costs by optimizing efficiency of transportation, administration, storage, logistics activities. handling, packaging, communications, This study is structured in 4 sections: customer service, etc.” Section 1: Introduction (including the In the OECD Report (Organization for research imperative, methodology, and Economic Cooperation and Development), research objectives) Karri Rantasila and Lauri Ojala (2012) Section 2: Overview of logistics costs summarized the components of logistics Section 3: Logistics costs in Vietnam costs mentioned in the past studies as well Section 4: Conclusions and Recommenda- as in the logistics reports of countries as tions follows (Table 1). Due to the difference in the way of calcu- 2. Overview of logistics costs lation among different countries, the com- ponents of these logistics costs may vary. Logistics costs can be approached from However, in general, the main components 38 Tạp chí Khoa học & Đào tạo Ngân hàng- Số 229- Tháng 6. 2021
4. TRẦN NGUYỄN HỢP CHÂU - LƯƠNG VĂN ĐẠT Table 1. Summary of logistics-cost components Nation China Korea Count States United Canada S- Africa Morocco Thailand Switzerland Netherlands Year of publication 2001 2011 2010 2009 2009 2008 2006 2008 2011 Cost components Transportation x x x x x x x x 8 Administration x x x x x x x x 7 Inventory carrying x x x x x x x x 7 Warehousing x x x x x 5 Cargo handling x x x 3 Transport pack. x x x 3 Communication x 1 Customer service x 1 Documentation x 1 Equipment x 1 Information x 1 Insurance x 1 Internal logistics costs x 1 Internal services x 1 Obsolescence x 1 Outsourced logistics x 1 costs Other logistics x 1 Plan/management x 1 R&D x 1 Shipper related x 1 Source: Karri Rantasila and Lauri Ojala (2012) that make up the national logistics costs 3. Logistics costs in Vietnam are below: Transportation costs (inbound and out- According to the study of MOIT (2019), bound of manufacturing premises, domes- Vietnam has not had official statistics of tic and international). logistics costs as well as methods of cal- Inventory costs (packing, reverse logistics- culating them, but the main components warehousing and storage). that make up logistics costs have been Administration costs (costs related to identified, which are transportation costs, customs declaration, inspection of goods, inventory costs, and administration costs transactions ). (MOIT, 2020). In the report published by Advance Logistics Group Consult- Số 229- Tháng 6. 2021- Tạp chí Khoa học & Đào tạo Ngân hàng 39
5. Giảm chi phí logistics tại Việt Nam Figure 1. Logistics cost components in Vietnam in 2014 Source: MOIT (2020) Table 2. Logistics costs by main exported products by Vietnam in 2014 No. Product Logistics costs / GDP 1 Seafood 12.2% 2 Rice 29.8% 3 Coffee 9.5% 4 Vegetables, fruits 29.5% 5 Beverage 19.8% 6 Textile 9.3% 7 Footwear 11.7% 8 Pharmaceutical products 0.3% 9 Electrical products 1.2% 10 Electrical components, spare-parts 3.5% 11 Transportation vehicles 2% 12 Furniture 22.8% Source: MOIT (2020) ing (ALG Consulting) of World Bank, in ular, rice has the highest percentage with 2014, transportation costs account for the 29.8% while the lowest figure is associ- largest proportion of Vietnam’s logistics ated with pharmaceutical products (Table costs, with 59% (Figure 1). Likewise, in 2). Following this method, the reported the study of MOIT, (2019), the structure logistics costs in 2018 is 16.8% of GDP of components in Vietnam’s logistics cost (Figure 2), equivalent to 42 billion USD. in 2010 and 2016 is identical, in which the The ratio of logistics costs to GDP repre- ratio of transportation costs is 60%, while sents the level of development and the role the figures for inventory costs and admin- of logistics in the economy. Compared to istration costs are 36% and 4% respec- other countries such as China, this rate is tively. 14.5%, the figures for developed countries The method used in ALG’s report is based such as the US and Singapore are about on main exporting products of Vietnam 7.5-8.5% (Figure 2). Three components of and calculates the ratio of logistics cost/ logistics costs shall be analyzed to figure GDP for each of these products. In partic- out reasons why the logistics cost in Viet- 40 Tạp chí Khoa học & Đào tạo Ngân hàng- Số 229- Tháng 6. 2021
6. TRẦN NGUYỄN HỢP CHÂU - LƯƠNG VĂN ĐẠT Figure 2. Logistics costs in 2018 Source: MOIT(2020) nam is still high at 16.8%. about 3-5% for transportation companies with less than 10 vehicles. The top five 3.1. Transportation costs cost-categories for delivery businesses are fuel costs, tolls, informal fees, interest There are different modes of transport that expense, and wages (Yin et al., 2019). The can be used to deliver the goods from one ratios for main costs in road transportation place to another place, and the common costs are 30-35%, 10-15%, and 15% for ones are road transportation, rail transpor- fuel costs, tolls, and wages respectively tation, air transportation, sea transporta- (VOV Transport, 2019). This is in line tion, and inland waterway transportation. with the study of Yin et al.,2019 which The majority of goods are delivered by emphasizes the high tolls and informal road and waterway, around 90%, in which fees in Vietnam’s road transportation (Fig- road transportation accounts for 77% ure 3). Regarding interprovincial transpor- (World Bank, 2019). tation services, a fierce competition among logistics companies exists, leading to a a. Road transportation. significantly fragmented market and low In 2019, a research conducted by World profit margins. This can be illustrated by Bank’s experts including Yin Yin Lam, the fact that the average number of ve- Kaushik Sriram, and Navdha Khera was hicles in each logistics company is about 5 introduced to assess road transportation vehicles with their net margins are 3% for in Vietnam and give solutions to reduce short-haul deliveries and 5% for long-haul logistics costs by implementing surveys deliveries (Figure 4), and 68% of trucks in with 1,400 truck drivers and 150 logistics Vietnam are those less than 5 tons (Yin et companies. Road transportation costs are al., 2019). Another downside is a lack of estimated at 2,775VND/ton/km for short- transport exchanges or logistics centers to haul delivery and 952 VND/ton/km for match supply with demand (around 50- long-haul delivery, and the profit margin is 70% of trucks return with no load) (Yin et Số 229- Tháng 6. 2021- Tạp chí Khoa học & Đào tạo Ngân hàng 41
7. Giảm chi phí logistics tại Việt Nam Figure 3. Components of transportation costs by Truck Size in Vietnam in 2019 Source: Yin et al., 2019 Figure 4. Net margins by Fleet size of Truck Operators in Vietnam in 2019 Source: Yin et al., 2019 al., 2019). Informal costs in road transpor- in big cities as well as poor consolidation tation are still high due to low load limit, of goods through delivery hubs affect the unreasonable toll booths and the tight productivity of logistics companies (Yin operating hours of trucks compared to et al., 2019). Because they have to suffer increasing demand of logistics companies. severe traffic congestion, leading to ineffi- This causes businesses to violate the regu- ciency of transport routes within cities and lations and pay informal fees. Regarding from ports to the city. urban road transportation, a lack of clear separation between industrial and resi- b. Inland waterway. dential zones through land-use planning While using inland waterway has lower 42 Tạp chí Khoa học & Đào tạo Ngân hàng- Số 229- Tháng 6. 2021
8. TRẦN NGUYỄN HỢP CHÂU - LƯƠNG VĂN ĐẠT costs than road transportation, the door- ing surcharges, overdue penalties, empty to-door transportation services have much container balance surcharges). Conse- higher prices than trucking due to discon- quently, this makes an increase in logistics nected multimodal transport. According to costs, leading to non-competitive prices the report of MOIT (2020), many transport of products. Moreover, shipping lines also routes in the Mekong Delta, handling costs only choose to leave empty containers at account for up to 35% - 40% of total costs big cities, near the port to speed up the for full package transportation, and the rotation of containers. This leads to high delivery time is 5 times higher, and lower costs of transportation for businesses lo- stability compared with road transporta- cated far from the empty container storage tion due to the dependence on canals. This area and increases the pressure on traffic makes inland water transport unattractive in port cities. For example, a rice company for goods with quality requirements. in the Mekong Delta has to bear at least 4 million VND more for taking empty c. Sea transportation. containers for loading and then deliver For domestic sea transportation on the them back to Ho Chi Minh City for export North-South route, the freight from ware- (Haiquanonline, 2021). house to warehouse is 40-50% of the road freight, but delivery time is 3-5 times d. Rail transportation. higher, greatly affected by imbalance Currently, railway transport mainly car- of seasonal goods and region’s demand ries passengers, due to the long travel time (MOIT, 2020). In terms of international and high costs compared to sea transport, freight which is currently quite high, un- differences in broad-gauge and compli- predictable and unreasonable surcharges cated transshipment procedures as well as from carriers, lack of connectivity between costly handling fees. Moreover, upgrading seaports and transportation vehicles, and fleets, buying new loading and unloading traffic jams are causes of the this problem. vehicles, and building railway tracks are The year 2020 witnessed a crisis in the extremely expensive. shipping indutry caused by the Covid-19 outbreak and the shortage of containers, e. Air transportation. leading to sky-high ocean shipping rates. Although air transportation accounts for The rate for shipping a 40-feet container only a small part of the total volume of from Hai Phong port to an European Port goods delivered by Vietnam’s fleets, it increased from 1,000 USD to 8,000-9,000 accounts for 25% of the total export value USD at the end of 2020. To avoid these (MOIT, 2020). Only Noi Bai and Tan risks, majority of Vietnamese companies Son Nhat international airport have the air often import CIF and sell FOB, making cargo terminals and all the goods but by the choice of carrier depending on foreign airlines from Vietnam are placed under the partners (Haiquanonline, 2021). While belly of passenger airplanes. foreign partners choose carriers through bidding to cut costs. The carrier makes a 3.2. Inventory costs small number of profit from this shipping to win the bid so there is always a way to Vietnam only records the freight and increase local costs and surcharges (clean- warehouse index (including freight rates Số 229- Tháng 6. 2021- Tạp chí Khoa học & Đào tạo Ngân hàng 43
9. Giảm chi phí logistics tại Việt Nam for passengers and goods, warehouse Table 3. Freight and warehouse index service prices), and inbound and outbound in Vietnam costs of national reserve goods (MOIT, Year 2015 2016 2017 2018 2019). As can be seen in Table 3, the Index freight and warehouse index in Vietnam Compared with the has increased slightly and steadily from 96.74 98.23 102.15 104.15 previous 2015 to 2018. year (= 100) Besides, Vietnam has not had a national Compared logistics center yet, and has made a devel- with the year 134.24 138.6 141.1 143.65 opment plan of logistics centers in recent 2010 (= 100) years. There are still some logistics hubs Source: MOIT (2019) but small in terms of scale and scope of services. They mainly serve a number logistics centers Class II and 3 specialized of businesses in the industrial sector or logistics centers are identified as necessary a province or city, which have not yet for investment. While the understanding developed to the scale of serving a sector of this plan is still different among stake- or an economic region. Most centers are holders, it is made on the orientation basis. not synchronous in investment scale, so Local governments should play an active they cannot provide sufficient functions of role in making a more detailed plan and a logistics center, mainly doing the func- implementing it so they can attract invest- tion of loading or unloading goods from ment from the central government. containers, gathering empty containers to However, the understanding of this plan return to the shipping lines or deliver to is still different among stakeholders, and domestic shippers (MOIT, 2020). Equip- some localities still hope to be the home ment for storage, loading and unloading of one of these logistics centers for invest- is outdated, slowing down the warehous- ment from the State, while this is just an ing process, causing damage to goods. open plan on the orientation basis and the The costs of cold logistics centers are still investment attraction must be conducted high due to costly electricity expenses. In by the localities themselves. specific, apart from Interserco’s logistics center in My Dinh and Hateco in Long 3.3. Administration costs Bien, Hanoi does not have any significant space for logistics centers in the context In the total time from the registration of that Hanoi has 9 industrial parks, 43 oper- declarations to customs clearance/release, ating industrial clusters and 84 registered the time associated with custom offices industrial clusters, 132 supermarkets, 454 only accounts for about 28%, the remain- markets and thousands of convenience ing 72% of time depends on the process- stores to serve 7.78 million people in the ing of specialized inspections by related capital (Tran Thanh Hai, 2019). The Prime procedures for import and export of goods Minister has issued Decision 1012/QD- (MOIT, 2019). These often encounter TTg approving the Master plan to develop overloaded work due to a long list of the logistics center system nationwide to imported and exported goods, in addition 2020, with a vision to 2030. Accordingly, to ambiguous interpretation and guide- there will be 3 logistics centers Class I, 15 lines in legal documents, leading to longer 44 Tạp chí Khoa học & Đào tạo Ngân hàng- Số 229- Tháng 6. 2021
10. TRẦN NGUYỄN HỢP CHÂU - LƯƠNG VĂN ĐẠT Table 4. Time and cost to import and export in 2019 Series Name Vietnam East Asia & Pacific European (excluding high income Union countries) Time to export, border compliance (hours) 55.0 59.6 7.5 Time to export, documentary compliance (hours) 50.0 57.8 1.7 Time to import, border compliance (hours) 56.0 74.0 1.6 Time to import, documentary compliance (hours) 76.0 55.3 0.6 Cost to import, border compliance (US $) 373.0 437.2 30.3 Cost to export, border compliance (US $) 290.0 400.6 79.6 Cost to export, documentary compliance (US $) 139.2 120.6 16.7 Cost to import, documentary compliance (US $) 182.5 119.9 4.6 Source: World Development Indicators, World Bank time of customs clearance and probably world. This is due to a number of follow- an increase in informal fees. While time ing reasons: high toll and informal costs in to export related to border compliance road transportation, lack of connectivity in of Vietnamese enterprises is shorter than multimodal transport, international trans- those from East Asia & Pacific (exclud- portation depending on foreign enterpris- ing high income countries), it takes much es, lack of logistics centers, and high cost more time for Vietnamese companies to to import and export. comply with import documentary (76 From the above analysis, some recomme- hours of Vietnam and 55.3 hours of East dations are given below. Asia & Pacific) (Table 4). Furthermore, in comparison with East Asia & Pacific, 4.2. Recommendations Vietnam has significantly high cost to import and cost to export. When consider- Firstly, Vietnam’ s LPI needs to be im- ing all of these indicators of developed proved, which can lead to a decrease in countries such as European Union, the logistics costs. Based on the above analy- performance of Vietnam is far below in sis, logistics costs in Vietnam are still comparison with European countries’ high due to the high costs of transporta- performances. tion, storage and administration. But that doesn’t mean the lower the logistics costs, 4. Conclusions and Recommendations the better the logistics performance is. Logistics costs have a close relationship 4.1. Conclusions with the turnover of Vietnam’s logistics businesses. Reducing logistics costs may Logistics costs in Vietnam comprise of 3 lead to a decline in the revenue of Viet- main types of costs: Transportation costs, namese businesses operating in this sector. Inventory costs, and Administration costs. Therefore, the issue of reducing logistics This study shows that logistics costs in costs needs to be improved in the way Vietnam are still high compared with of increasing the efficiency of logistics other countries in the region and in the activities to optimize resources in society. Số 229- Tháng 6. 2021- Tạp chí Khoa học & Đào tạo Ngân hàng 45
11. Giảm chi phí logistics tại Việt Nam Figure 5. Input and Outcome LPI Indicators Source: WTO, 2012 Currently, the performance of logistics op- erations is often assessed by the logistics performance index (LPI). This is an index given by the World Bank to rank the effi- ciency and capacity of logistics operations of countries. This index is published every two years. There have been 6 LPI rat- ings in 2007, 2010, 2012, 2014, 2016 and 2018. Although it is just an index given by an organization, the World Bank’s LPI has been recognized by a large number of Figure 6. The Relationship between the LPI countries as a reliable indicator evaluating and the Level of Logistics Costs the performance of the logistics service Source: Arvis, Mustra, Panzer, Ojala & Naula (2007) industry in each country. The LPI indexes have six components (Figure 5): pected delivery times. - The efficiency of customs and border According to Karri Rantasila and Lauri management clearance. Ojala (2012), there is a relationship be- - The quality of trade and transport infra- tween a country’s LPI ranking and its structure. level of logistics costs: countries with a - The ease of arranging competitively low LPI score tend to have high costs. In priced shipments. particular, induced costs (related to non- - The competence and quality of logistics delivery or the avoidance of non-delivery services. and storage) tend to be low in countries - The ability to track and trace consign- with a high LPI score, and direct costs ments. (freight and other shipment-related costs) The frequency with which shipments tend to decrease until the LPI score reach- reach consignees within scheduled or ex- es a value of around 3.3 (Figure 6). 46 Tạp chí Khoa học & Đào tạo Ngân hàng- Số 229- Tháng 6. 2021
12. TRẦN NGUYỄN HỢP CHÂU - LƯƠNG VĂN ĐẠT Figure 7. Logistics performance index Source: World Development Indicators, World Bank LPI of Vietnam has been improved costs is to scrutinize the terms of deliv- through years, from 2.89 in 2007 rising to ery. For example, if a company purchases 3.27 in 2018. Especially, Vietnam’s global its raw material Ex-Works (EXW) and ranking jumped from 64th in 2016 to 39th delivers its products duty paid (DDP), it in 2018. Among the lower-middle-income may seem to incur higher logistics costs economies, Vietnam led the global rank- than a company that arranges its deliveries ings in 2018 followed by India, Indonesia, differently. But on the positive side, busi- Côte d’Ivoire, Philippines, and Ukraine nesses will buy goods with the cheapest (Koushan Das, 2018). However, in com- price and sell goods with the highest price. parison with developed countries, Viet- Vietnamese enterprises should choose the nam’s logistics performance is far below commercial terms in which they have the (Figure 7). right to charter transportation vehicles. Thus, in order to reduce logistics costs in In international transactions, businesses the direction of improving logistics ef- should build strategic relationships with ficiency, it is necessary to pay attention a number of shipping lines, and take the to improve LPI. The improvement of initiative in negotiating with partners on LPI can be achieved by improving LPI chartering rights. As a result, there is a components such as reforming customs basis to negotiate with a foreign partner to procedures, improving the quality of infra- win the right to transport, thereby control- structure, utilizing advanced information ling shipping costs and avoiding pressure technologies of high freight costs. Secondly, Vietnamese companies should The third recommendation is that there get the right to transport goods interna- is a strong need for Vietnam’s logistics tionally by negotiating proper Incoterms. enterprises to coordinate and support each In the study of Pohlen, T. Klammer, T. other to implement full logistics services Cokins, G. (2009), the application of inter- in a supply chain to improve efficiency national commercial terms (Incoterms) is and reduce costs for logistics operations. closely related to logistics costs. One way Currently, Vietnam has more than 3,000 of identifying the company’s share of the enterprises registered to operate in the Số 229- Tháng 6. 2021- Tạp chí Khoa học & Đào tạo Ngân hàng 47
13. Giảm chi phí logistics tại Việt Nam logistics sector, of which 89% are domes- are integrated and applied in the systems. tic enterprises, 10% are joint ventures, The ability of container ships to load or and 1% are foreign enterprises. Domestic unload cargo quickly or slowly depends enterprises are mostly small and only ac- heavily on the technology used by ship- count for about 20% of the total market owners and port operators in their man- revenue (Cao Cam Linh, 2021). Domestics agement. Technology can help shipowners logistics companies only provide frag- plan the whole process, how to load and mented logistics services in the territory unload goods, moving goods to or from of Vietnam such as forwarding services, the yard, even how to load containers in an packaging services, warehouse rental, optimal way. Meanwhile, port authorities customs services At the same time, there rely on technology to monitor the safety of is a lack of synchronous linkage between the waters and process paperwork so that logistics businesses participating in the ships can get in and out of ports effectively whole supply chain. Meanwhile, integrat- and in a timely manner. ed and international intermodal services are provided by foreign owned enterprises. 4.3. Limitations and Future research Therefore, the Vietnamese government should have a strategic plan to coordi- In some parts of the paper, the data has nate logistics activities of Vietnamese not been up-to-dated. This is because the companies in an integrated supply chain fact that data on logistics costs in Vietnam to improve performance of the logistics has not been official collected and there industry. are no authoritative agencies responsible Fourthly, applying information technolo- for doing this. Moreover, secondary data, gies to logistics activities is an inevitable e.g. World Bank’s data on logistics costs, trend, advanced technologies in manage- are publicized every 2 years, and the lat- ment and administration should be used est available data is investigated in 2018. in all stages of supply chains, including There is an immediate and urgent need logistics activities. Logistics infrastructure for research in the future on the method systems include physical infrastructure to calculate the logistics costs in Vietnam, such as transportation systems, wharf and the results should be evaluated and and soft infrastructure such as human audited before and after the time when the resources, system of policies and laws, project is conducted. This should be an procedures These systems cannot be important and reliable source to inform controlled and managed effectively and governments and private sectors in the efficiently unless information technologies process of decision-making ■ References Arvis, JF., Mustra, A., Panzer, J., Ojala, L., Naula, T. 2007. Connecting to Compete 2007: Trade Logistics in the Global Economy. The Logistics Performance Index and Its Indicators. Washington DC. Cao Cam Linh. 2021. Phát triển dịch vụ logistics ở Việt Nam trong bối cảnh kinh tế số. Accessed: 29 March 2021, at The Prime Minister of Vietnam (2015), Decision No. 1012 /QD-TTg dated 03/07/2015, approval for nationwide logistics center system development planning by 2020 and orientation towards 2030 The Prime Minister of Vietnam (2017), Decision No. 200 /QD-TTg dated 14/02/2017, approval for the action plan for improvement of competitiveness and development of Vietnam’s logistics services by 2025 48 Tạp chí Khoa học & Đào tạo Ngân hàng- Số 229- Tháng 6. 2021
14. TRẦN NGUYỄN HỢP CHÂU - LƯƠNG VĂN ĐẠT Farahani, RZ., Asgari, N., Davarzani, H. 2009. Supply Chain and Logistics in National, International and Governmental Environment - Concepts and Models. Physiga-Verlag, Berlin, Germany. Haiquanonline, 2021. Kéo giảm chi phí cho hàng hóa xuất nhập khẩu - Cần làm ngay - Bài 1: Phí chính, phí phụ đội giá hàng Việt. Accessed: 19 May 2021, at International Chamber of Commerce, Incoterms® 2020 Karri Rantasila and Lauri Ojala, 2012. Measurement of National-Level Logistics Costs and Performance. International Transport Forum Discussion Papers. [International Transport Forum Discussion Papers] https:// doi.org/10.1787/5k8zvv79pzkk-en. Koushan Das, 2018. Vietnam Climbs 25 Places in World Bank’s Logistics Index - Vietnam Briefing News. [online] Available at: [Accessed 27 Mar. 2021]. Ministry of Transport. 2014. Hội thảo Hoàn thiện và công bố Báo cáo cuối kỳ “Hỗ trợ kỹ thuật về vận tải đa phương thức cho Bộ GTVT. Accessed: 29 March 2021, at MOIT, 2019. Nghiên cứu, đề xuất giải pháp nhằm giảm chi phí logistics Việt Nam. MOIT, 2020. Vietnam Logistics Report 2020. Pohlen, T., Klammer, T., Cokins, G. 2009. The Handbook of Supply Chain Costing. Lombard, Illinois, USA Resolution No.18/NQ-CP. 2020. Accessed: 19 May 2021, at Thoi bao Tai Chinh Viet Nam. 2021. Phát triển doanh nghiệp nhà nước quy mô lớn: Áp dụng nguyên tắc “cây gậy và củ cà rốt” trong hỗ trợ. Accessed: 19 May 2021, at Tran Thanh Hai. 2019. Trung tâm logistics không chỉ là cái kho!. Accessed: 19 May 2021, at United Nations, ESCAP ed., 2002. Commercial development of regional ports as logistics centres. New York: United Nations. VOV Transport, 2019. Chi phí logistics Việt Nam tương đương 16 - 17% GDP. Accessed: 29 March 2021, at World Bank, 2019. Dissemination Workshop on Sustainable Development of Inland Waterways Transport in Vietnam and Strengthening Vietnam’s Trucking Sector. [Text/HTML] World Bank. Available at: [Accessed 27 Mar. 2021]. World Development Indicators. World Bank Data. Accessed: 29 March 2021, at WTO. 2012. Connecting to Compete-Trade Logistics in the Global Economy, The Logistics Performance Index and Its Indicators. Washington DC. Yin Yin Lam, Kaushik Sriram, and Navdha Khera. 2019. Tăng cường ngành Vận tải hàng hóa đường bộ Việt Nam, Hướng đến giảm Chi phí Logistics và Phát thải khí nhà kính. Accessed: 29 March 2021, at Số 229- Tháng 6. 2021- Tạp chí Khoa học & Đào tạo Ngân hàng 49