AEC to boost logistics in Vietnam and Thailand

At the ASEAN+6 Trade Logistics Connectivity Symposium in Bangkok recently, all experts emphasised the importance of logistics trade in rising Southeast Asian economies. According to experts, synchronised logistics between countries are pivotal to establishing ASEAN as a single market and production base – a major goal of the forthcoming ASEAN Economic Community (AEC).

“A critical part of the AEC is the ASEAN Logistics Roadmap, which outlines the master plan for logistics connectivity in the region. This includes liberalising logistics services, improving infrastructure and customs, enhancing the competitiveness of the ASEAN logistics industry, and regional collaboration,” said Thomas Lee, the Singapore-based chairman of the International Federation of Freight Forwarders Associations.

Lee stressed that it was high time ASEAN logistics firms realise their interdependency and collaborate to build an efficient logistics network on the regional scale. This step is vital to further integrate the region into the global supply chain.

In a similar vein, Chantira Vivatrat, deputy director-general of the Thai Department of International Trade Promotion (DITP), noted that high regional connectivity in logistics would help ASEAN firms capitalise on opportunities from the expected trade boom after AEC, both within ASEAN and nearby countries.

“In this situation, we can see that the Vietnamese and Thai logistics industries enjoy great potential for collaboration, especially as the two countries plan to increase bilateral trade from the current $11 billion figure to $20 billion in 2020. With more Thai firms entering the Vietnamese market and vice versa, seamless logistics between the two markets are crucial,” Vivatrat shared with VIR.

Vivatrat added that the DITP was always eager to help ASEAN logistics firms connect with each other and prepare for the AEC. Recently, the department has collaborated with Thai event organiser Reed Tradex to hold the 12th TILOG-Logistix exhibition in Bangkok, attracting 9,800 visitors from around the world.

From the viewpoint of Thailand-based logistics firms, Vietnam has high potential, thanks to its strategic position in ASEAN, deep ports, and more than 3,000 kilometres of coastline, making the country suitable for goods distribution by multiple means of transport. According to managing director of SBS Logistics Thailand Takashi Inoue, the company recently opened a Ho Chi Minh City branch, as they believe Vietnam is a key link for distributing goods from ASEAN to Hong Kong, China, and other nearby countries

Likewise, president of Nim Express Chartchai Suwitsakdanon told VIR that his company was seeking a Vietnamese partner as Nim Express widened its networks to reach other Southeast Asian countries.

However, experts also mentioned a list of challenges that ASEAN countries, including Thailand and Vietnam, may face during their logistics collaboration. Nguyen Duy Minh, chief of the Membership and Finance Division of the Vietnam Logistics Association (VLA), shared that weak infrastructure and vehicles, slow-changing regulations, and cumbersome customs procedures could hinder the connectivity between ASEAN logistics firms.

“That said, I’ve seen authorities and firms taking the initiative to bring down barriers. For example, Vietnam recently introduced the e-customs system, participated in the East-West Corridor from Myanmar to Vietnam, and proposed another coastal corridor to link Thailand, Laos, Cambodia, and Vietnam,” said Minh.

He also shared with VIR that Vietnam wwas in dire need of integration into the global logistics scene, as only 30 per cent of firms were linked to the international supply chain, mostly in low value-added industries, such as garments and footwear.

“Thus I believe that active cooperation with not only Thailand, but also other ASEAN countries, will bring the Vietnamese logistics industry to the world. This will require a concerted long-term effort between the government, associations such as the VLA, and the logistics firms themselves,” Minh said.