Opportunities for the logistics industry in digital transformation

The logistics industry needs to be heavily invested, especially in the aspect of "digitization" to be able to respond and adapt to the market context, to maximize support for development.

Opportunities for the logistics industry in digital transformationCargo transportation at Hai Phong port. Photo: N.Linh

Impressive growth but high costs

According to the rankings of Agility 2022, the Vietnamese logistics market is ranked 11th in the group of 50 global emerging logistics markets. The compound annual growth rate (CAGR) in 2022-2027 of Vietnam's logistics market is forecast to reach 5.5%.

Vietnam is currently the leading country among ASEAN countries in terms of the number of logistics service businesses licensed by the US Maritime Administration (FMC).

The quantity and quality of logistics services have been improved, thereby helping the export of goods and services account for an increasing proportion in GDP scale, increasing from 72.9% in 2015 to 93.3% in 2021. Vietnam is also ranked at the top of emerging markets.

The average annual growth rate of the industry is from 14-16%, the quantity and quality of logistics services are improved, making an important contribution to bringing Vietnam's total import and export turnover in 2022 to 730.2. billion USD, up 9.1% over the same period in 2021.

According to the Ministry of Industry and Trade, besides remarkable results, the logistics industry also has limit ations, weaknesses, and emerging problems such as the cost of logistics services in our country is still high; the promotion of linkages between logistics enterprises, between logistics enterprises and manufacturing and exporting enterprises is still weak, and a network of large-scale logistics enterprises has not yet been established, capable of leading the market, promoting the development of the logistics industry. One of the main subjective reasons for the above limit ations is that the application of digital technology has not really met the development needs of the new situation in a timely manner.

At the seminar "Digital transformation to build a modern and sustainable logistics industry" organized by the Ministry of Industry and Trade on April 27, Director of the Import-Export Department (Ministry of Industry and Trade) Phan Van Chinh said that as the key industries, likened to the "lifeblood" of the national economy, logistics needs to be heavily invested, especially in the aspect of "digitization" to be able to respond and adapt to the market context, with maximum support to promote the development of other professions.

Impressive results from digital transformation

Thanks to digital transformation, the application of technology to business activities, and optimization in production and product supply chains, some businesses have become more efficient in logistics services, reducing significant costs involved.

Mr. Truong Tan Loc, Marketing Director, Saigon Newport Corporation shared that the ePortproduct is one of the successful projects in promoting the application of technology in SaiGon Newport's products and services. Thereby, helping to reduce the waiting time at the port from 13 to 6 minutes; e-customs clearance time reduced by 2 minutes/container; helping to increase the output of gate delivery from 11,000 vehicles/day to 19-20,000 vehicles/day.

Besides, Saigon Newport Corporation has been gradually applying artificial intelligence (AI) technology to customer care and improving customer experience.

Mr. Dinh Hoai Nam, Business Development Manager, SLP Vietnam Company, said that in the digital age, modern warehouses are replacing traditional warehouses, which is indispensable for the development of the logistics industry. The reason for this change is due to the increasing demands of customers, requiring shorter transit times and better service quality.

Modern warehouses are equipped with advanced technologies such as comprehensive monitoring and automation systems, which improve the speed and efficiency of the transportation process. This is an important factor to help the logistics industry develop and meet the increasing needs of customers.

“The development of the current logistics industry is requiring warehousing solutions to adapt to the emergence of new types such as e-commerce, last-mile delivery, etc. Modern warehouses are built to meet the needs of customers,”DinhHoai Nam saidand added that new technologies such as IoT, artificial intelligence and automation have helped improve the efficiency and accuracy of warehouse operations. Smart warehouse systems provide insights into the storage, transportation, and management of goods, helping to optimize all of these operations.

According to Mr. Nguyen Trieu Quang, Director of Northern Operations Division, Lazada Vietnam, in the context of the global trend towards sustainable development, logistics enterprises also need to build a sustainable and comprehensive ecosystem to embrace the opportunity of e-commerce, while enhancing the delivery experience from every touchpoint; technology application and process standardization to optimize operational efficiency; sustainable green logistics development.