Its urgent to get a synchronous and timely: Vietnam Logistics Action Program

So, without including the 3098/BTC Decision dated June 24, 2011 of the Ministry of Industry and Trade , the logistics industry has abundantly yielded∫ many prospects on development project. Especially, the 175/QĐ-TTG is drafted by the Ministry of Planning and Investment, and logistics services are considered as the key to speed up the development of production, distribution system of other service industry and cargo flow in the country and import/export∫.

However, it is regrettable that according to its nature of connection and inherent system, logistics immediately needs to have a concrete action program that is managed by the highest government agency and down to the local ones in concrete points of time so that the strategic goals can be achieved.

We want to talk about the urgency of a Vietnam logistics action program for the period of 2011-2015. According to the 175/TTG Decision, this will be also managed by the Ministry of Planning and Investment.

Hereunder are some suggestions of VIFFAS, the association of Vietnams logistics companies:

The points of view to establish Vietnam Logistics Action Program 2011-2015

- The logistics action program (including development of transport and logistics services) in the next stage must consider logistics as one of the key economic industries, the blocked point of growth∫ in transport, cargo traffic in the country and in export of Vietnam should be minimized to help to develop firm economy-society, quickly to be free from the present crisis and inflation.

- Vietnam logistics development in the next stage should put Vietnam logistics in an environment which is not apart from the five main agents: infrastructure, institutional frame, logistics providers, entrepreneurs, manufacturers and human resource; all of those should be synchronously, harmoniously developed and interactive to get high effect.

- Clearly specify the ministries and industries contents, duties, date of finish as well as the resources to carry out and it is important that those should be integrated to the yearly and five-year goals of economic-social development of the central and local authorities.

Build the K.P.I. (Key performance indicator) system in order to supervise, keep track and adjust in time the concerning activities.

- Ensure that the concerning logistics activities in logistics system to be synchronously combined and connected in the country as well as in international level (transport, sea ports, warehouse, IT, customs and the institutions such as bank payment, insurance, cargo security, assessment. Take advantage of the alliance strength of the existing logistics associations (such as VATA, VSA, VPA, VISABA, VSSC) to have best use of the natural and national resources.

- Connect Vietnam logistics action program to the strategies to speed up national commercial (such as the abovesaid 398/QĐ-BCT) and integrate into the regional development strategies and route: GMS, ASEAN as well as ASEANs supporting commercial strategy.

- Have special reference to the UNESCAP Regional Action Program Phase II 2012-2016, of the Busan Declaration on Transport Development in Asia and the Pacific.

The experience lessons of China and Thailand

References of Chinas logistics development program

- In many recent years, Chinese Logistics Management units have been formed from the central to the local. At central level, it is leaded by the National Reform and Development Committee includes the Ministry of Trade, Ministry of Transport, States Management Department of Industry and Trade, States Tax Department, and at local level, it is leaded by the Reform and Development Committees, Transport Agencies and Trading Agencies.

Besides, the Interdisciplinary Conference System on modern logistics (including the National Reform and Development Committee, Ministry of Trade, Ministry of Transport, Ministry of Railway, Ministry of Industry and Information Technology, Ministry of Public Security, Chinas Logistics and Trade Federation) includes 15 agencies, organizations that hold one or two conferences yearly.

- Regarding policies:

+ Speed up the development of modern logistics (2001 and 2004)

+ Suggest the 11th five-year plan of economic-social development (2006)

+ The Council of States opinions concerning to the development of services (2007)

+ Logistics adjustment and development Plan, the 12th five-year plan and logistics development in China.

- The Ministry of Transports achievements in Chinas logistics development:

+ At the end of 2009, there is a 3.86 millions km highway, among which there is a 65,000 km highway, being the second longest of the world.

+ Port and container capacity has been rated as the first of the world for the last 7 years.

+ In 2008, the Ministry of Transport built the strategy of logistic development, with policies and standards to develop and supervise logistics activities, supervise the 3PLs market, guide the transport enterprises to turn into modern logistics providers, strongly speed up the application of scientific breakthroughs in logistics.

+ The key duties such as: develop advanced transport methods and integrate transport into logistics services.

+ Accelerate the establishment of platforms for logistics.

+ Develop logistics at the gateway ports and improve logistics infrastructure net.

+ Deeply and widely reform and supervise transport market, create a healthy developing environment.

+ Speed up the standardized programs (such as building national and industrial standards in logistics, training and applying)

References of Chinas logistics development program

Vision: Establish logistics system according to international standards; support Thailands commercial and investment centers.

Objectives: Give commercial conveniences to improve effect, satisfy customers need, ensure prestige and safety. Create added values to logistics and support the industries.

Purpose: Reduce logistics costs in GDP from 19% in 2005 to 16% in 2011.

The solutions and duties:

- Develop commercial logistics to ensure thoroughness for Thailands supply chains (Each ministry and industry has concrete duties and attached K.P.I.)

- Optimize logistics and transport system (with concrete duties and attached K.P.I.)

- Internationalize logistics services (with concrete duties and attached K.P.I.)

- Give best convenience to commercial, reduce import/export costs (with concrete duties and attached K.P.I.)

- Human resource for logistics (in both production and service; with concrete duties and attached K.P.I.)

Recently, Thailand has formed The National Logistics Committee) including 24 members, among which the Prime Minister, Deputy Prime Minister and Chairman, Deputy Chairman and most of leaders of concerning ministries and industries. The National Economic and Social Development Board (NESDB) works as its secretary. This board is in charge of setting up logistics action program for each stage, assigning duties to concerning industries and submitting the Government for approval.

Some suggestions of VIFFAS for Vietnam Logistics Action Program 2011-2015

VIFFAS has given the following suggestions in the national forums, conferences:

- Establish the Logistics National Committee (or refer to Chinas model as presented in Part 2).

This committee plays a role as the bandmaster in gathering and connecting the concerning ministries and industries, associations, scientific institutes, universities to act as an advisor for the government the policies in logistics, strategic orientation, project and timely cooperation.

- Keep on investment and development, upgrade transport infrastructure system, sea ports, logistics parks, port-rears in order to get thorough multimodal connection from the gateway ports, dry ports, regional distribution centers to the industrial zones, retail centers and back to the international transport lines which are suitable to the distribution of resources, location and timing project and have national and international cooperation in many ways such as Public-Private Partner, Building-Transferring , Building-Operating- Transferring.

- In the States policies, regulations: early study to amend the regulations about logistics services in the Law of Commercial (2005) to Vietnams reality; clearly regulate the forms of freight forwarding, transport services and logistics services according to their nature and roles to uphold the effect in each area.

Study to develop and institutionalize the 3PLs market to reduce costs and make more added values for the last consumers. Amend and add the regulations regarding multimodal transport, giving commercial conveniences to the multimodal transport operators. Add the concept of Non Vessel Operating Common Carrier to make convenience for the service providers, as well as making conveniences in procedures, conditions, infrastructure for retail transport, gathering cargo in the mode of just-in-time.

Have policies to support and encourage the task of human resource development for logistics and tax incentive for the national and international companies to invest in logistics infrastructure (logistics centers, distribution warehouses, logistics parks, dry ports, bonded warehouses, retail centers, communication and information technology investment.

- Form the national logistics institutes, take part in research and development and build the criteria, standards, statistics, and data of logistics to serve the task of forecasting, planning up the strategy and project in each stage.

- Carry out the route of logistics integration into ASEAN 2015 with the steps and supervise the planned goals.

- The overall goal of Vietnam logistics action program 2011-2015 is: to reduce the logistics cost in GDP from 25% (2010) to 18% (2015); improve Vietnams Logistics Performance Index from 53 rank out of 155 countries in 2010 to 40 rank in 2015.

- Refer to the document Vietnam Logistics Action Program, the research of ADB in cooperation with the Ministry of industry and Trade.