Digital transformation to compete in challenging logistics market

At the Vietnam Logistics Summit 2024, themed “Transform to Breakthrough” and hosted by VIR on October 31, experts unanimously highlighted that digital transformation has become a key driver in global logistics growth and discussed strategies for enhancing data analytics and integrating AI into logistics operations.

Overview of the discussion session. Photo: Le Toan

From the perspective of a global consulting firm, ABeam Consulting shared its commitment to leveraging its expertise in digital transformation to foster a sustainable supply chain evolution across Asia.

Drawing from deep project experience, ABeam is deploying digital twin technology, which integrates grid data and AI to digitise massive datasets such as transportation routes and modes. By analysing these with AI, clients benefit from continuous monitoring, allowing clients to easily track and enhance systems.

"Given Vietnam’s unique geography, stretching from North to South necessitates logistics hubs that prioritise not only sustainability but also speed and convenience, key for customer satisfaction. Digital twins will allow diverse scenario simulations, making it a pivotal application in Vietnam’s logistics sector to devise optimal transportation strategies," said Yoshihiro Wake, lead of transglobal expansion frontier at ABeam Consulting.

As Vietnam’s rapidly evolving market presents abundant opportunities, ABeam’s mission is to help clients continuously innovate and adapt to the challenging logistics landscape.

To address fragmented logistics hubs and an ever-changing business environment, Yoshihiro Wake noted that ABeam Consulting has developed the Coupa digital twin, which enables clients to prioritise data analysis, aiding in operational cost reduction and optimisation.

Yoshihiro Wake, lead of transglobal expansion frontier at ABeam Consulting. Photo: Le Toan

“The core value of this technology lies in cultivating a culture of continuous technological and operational improvement. ABeam’s clients have become proficient in running proactive simulations, empowering them to swiftly respond to global logistics market shifts.”

Digital Twins are designed for constant monitoring and adjustments to suit the dynamic business landscape, which is particularly beneficial in Vietnam’s fast-paced market,” added Yoshihiro Wake.

As a leading enterprise applying technology in Vietnam, Viettel Post’s deputy CEO, Dinh Thanh Son, noted that digital transformation starts with a shift in human capital.

Dinh Thanh Son, deputy CEO of Viettel Post. Photo: Le Toan

“With 40,000 employees nationwide, Viettel Post has undergone digital transformation across all operations using IoT tools, with investments in advanced IoT devices and IoT training for employees. This allowing us to harness data and analyse it with AI,” he said.

Post-transformation, the company introduced robotics in operations, significantly increasing productivity in sorting areas, as robots operate around the clock in warehouses, cutting delivery costs by roughly 40 per cent.

"Our ultimate goal is to reduce costs for both consumers and the company. In Vietnam, finding the lowest delivery price isn't possible; rather, we aim to continuously lower rates for our customers," stated Viettel Post’s deputy CEO.

Vietnam’s logistics sector has emerged as one of the fastest-growing globally, driving an influx of foreign companies into the market. Consequently, digital transformation plays a crucial role in helping enterprises remain competitive in an industry rich with opportunities yet fraught with challenges.

Eric Herding, managing director of DSV Air & Sea Vietnam, emphasised three pillars for successful digital transformation include IT personnel, process reengineering, and data quality.

Eric Herding, managing director of DSV Air & Sea Vietnam. Photo: Le Toan

“However, digitisation without a clear purpose rarely succeeds. The success rate of digital transformation projects varies, so a critical factor lies in people’s mindsets,” he noted, adding that the upcoming US presidential election results could significantly impact business, making it essential to view trends and projections carefully for 2025. Based on that, it is important to implement digital strategies effectively in the current context.

"From my experience, we anticipate unpredictable changes in 2025. Therefore, besides digital transformation, green transition is equally critical in the logistics industry to meet requirements from various import markets,” said Herding.

Green and smart logistics are not only inevitable trends of the global logistics industry, but also play an important role in the sustainable development of Vietnam's logistics industry.

Ben Anh, Group CEO, ITL Corporation said that technologies such as IoT, AI, blockchain or Big Data helps track and manage goods, increase transparency and enhance customer experience.

Ben Anh, Group CEO, ITL Corporation. Photo: Le Toan

“The combination of green and smart logistics not only contributes to building an effective supply chain, but also creates long-term sustainable value for the Vietnamese logistics industry, expanding opportunities to participate deeper in the global supply chain,” Anh said.

To attract investment in green and smart logistics, According to Anh, Vietnam needs to build a clear and attractive legal environment and preferential policies. The government can implement tax and financial support policies for businesses investing in green infrastructure and smart technology.

“Implementing policies to support businesses in technological innovation, along with promoting digital transformation, will be an important factor in attracting investment. Vietnam needs to promote synchronous infrastructure development. Infrastructure limitations including overloaded airports, limited waterway transportation and heavy dependence on roads also contribute to affecting consumer spending to the investment decision,” he added.

Anh also impressed the raising awareness of the importance of green and smart logistics in the business community and society will create pressure on businesses to change, thereby promoting demand and investment in the sector.

“These efforts not only help reduce costs and improve competitiveness, but also open up opportunities for international cooperation in the field of green logistics,” he added.

In a similar opinion, Cao Hong Phong, deputy CEO, Gemalink said that the integration of technology into port operations and logistics has evolved from being an industry trend to a critical necessity for sustainable business development.

Cao Hong Phong, deputy CEO, Gemalink. Photo: Le Toan

“Digitalisation and automation not only optimise operational processes and reduce costs but also significantly enhance service quality,” Phong said.

The adoption of technology and digital transformation for smart ports involves multiple stakeholders, including not only port operators but also import-export businesses, shipping lines, regulatory authorities, and customs.

“Digital transformation and the pursuit of a green port model is a long-term strategic journey. Rather than focusing solely on ambitious targets, we prioritise impactful projects that build trust with both businesses and customers,” Phong added.

Ashish Kapur, regional head of Cargo for Southeast Asia, Cathay Cargo said that the company is now working with nearly 80 logistics companies in Vietnam, providing access to its network, capacity, service, and best-in-the-world solutions.

Ashish Kapur, regional head of Cargo for Southeast Asia, Cathay Cargo . Photo: Le Toan

“We are committed to delivering our We Know How promise in this market,” Kapur said.

In today's dynamic logistics landscape, agility is paramount. Cathay Cargo is continuously monitoring market demand trends and adapt its network to meet customers' evolving needs.

“Our strategy involves leveraging our freighter network and passenger belly capacities to effectively respond to cargo demands,” Kapur added.

Southeast Asia is a critical market emerging rapidly due to the "China Plus One" policy, positioning the region as a growing manufacturing hub.

In addition to a full resumption of our passenger network providing stable capacity with high frequency, Kapur said, the company is increasing its freighter capacity in Southeast Asia through strategic initiatives.

“These adjustments reflect our commitment to regional growth and fulfilling our customers' needs,” he cited.

Meanwhile Cathay Cargo is thrilled to announce the order of six A350 freighters, which will start delivery in 2027 which will further enhance its network expansion and enable us to meet the increasing worldwide demands for cargo transportation.

Vietnam Logistics Summit 2024 to take place on October 31 The second Vietnam Logistics Summit, themed "Transformation to Breakthrough" and organised by Vietnam Investment Review, will take place in Ho Chi Minh City on the morning of October 31.

Vietnam's logistics sector confronts new challenges Experts and business leaders looked at how Vietnam can overcome challenges and unlock the potential of its logistics sector at the Vietnam Logistics Summit 2024 on October 31.

Vietnam SuperPort poised to elevate Vietnam's logistics capabilities Vietnam SuperPort, a joint venture between YCH Group of Singapore and Vietnam’s T&T Group, is poised to enhance Vietnam’s logistics capabilities in the global supply chain.