Vietnamese logistics players urged to embrace digital transformation

The Vietnamese logistics industry could tremendously improve its efficiency through digital solutions

This was stressed at the seminar titled "Logistics industry before the turning point of digital transformation. Risk management to properly and effectively digitize services", held in Ho Chi Minh City on September 30.

Nguyen Tuong, deputy secretary general of the Vietnam Logistics Association, pointed out three challenges keeping logistics companies from embracing digital transformation, including financial capacity, human resources, and choosing suitable technology. In particular, companies need from hundreds of millions to dozens of billions of dong to invest in digital technologies. However, the majority of Vietnamese logistics players are small- and medium-sized, so they lack the capital to digitise their operations.

“In addition, there are few international-standard software offerings in Vietnam, making it difficult for local firms to choose suitable technology. Logistics leaders are not confident about data and payment security when implementing digital transformation. Both leaders and staff remain hesitant to change their habits for the digital environment. Thus, we need to change the perceptions of logistics companies,” he said.

Nguyen Ngoc Dung, vice chairman of the Vietnam E-commerce Association (Vecom), shared that local firms have remained slow to embrace digital transformation in the past 10 years. A shipper in a developed market can deliver 200 parcels a day with map data to optimise routes. In Vietnam, a shipper can deliver two parcels a day on average as it takes time to find the address and wait for the recipient to collect the order.

Most e-commerce activities are taking place in big cities like Hanoi and Ho Chi Minh City. Logistics companies also focus on the urban areas which increases shipment costs for long distance.

According to the Vietnam Logistics Association, not many logistics firms apply integrated solutions in their logistics and supply chains. Around 40 per cent of software applications remain basic such as international forwarding management, warehouse management, transport management, electronic data exchange, and customs declaration.