Enhancing the role of Vietnam’s logistics sector in the new context (Part 2)

Solutions to enhance the role of the logistics industry in the new context:

In the economy, the development of the logistics industry contributes to making Vietnam an integral part of the global value chain, linking Vietnam’s economy with the world economy. Logistics development helps expand the international trade market, increase consumer satisfaction, attract investment, and promote economic restructuring. A developed logistics industry contributes to cost savings and value-added during the distribution and circulation of goods. It also positively impacts cost reduction, improves accounting processes, and standardizes documentation in international production and business management. The logistics service sector contributes to enhancing management efficiency and strengthening the national competitiveness.

For businesses, the logistics industry helps improve production techniques, optimize resource utilization, reduce costs, prevent accidents, and enhance the competitiveness of enterprises. Logistics plays a crucial role in ensuring Just- In-Time (JIT) delivery, thereby ensuring the smooth operation of production and business processes, enhancing labor productivity, product quality, and cost reduction. It also effectively utilizes businesses’ capital. Logistics assists managers in making accurate decisions in production and business activities. Furthermore, the logistics industry promotes consumption and increases the value of products through the provision of supplementary circulation services (services continuing the production process in distribution and consumption).

In the national economy, logistics is both a science and a service sector that many localities identify as a leading industry driving rapid and sustainable economic growth. Therefore, to enhance and promote the role of the logistics industry in Vietnam’s economy and contribute to achieving the socio-economic development goals outlined in the development strategy for 2021-2030 and vision to 2045, we believe that comprehensive short-term and long- term solutions are needed. Here, we would like to further emphasize and discuss some key solutions:

• » Firstly, applying logistics thinking right from the planning stage of economic and social development policies in the new context is crucial. This ensures the coherence of logistics elements and contributes to innovating the growth model and promoting sustainable economic development. Only when policy-makers genuinely consider logistics solutions and the logistics environment can the principle “The production process is only complete when the product reaches the end consumers, both domestically and internationally” be realized.

• » Secondly, promptly reviewing, amending, and supplementing the logistics gaps in the development policies of foundational service sectors such as transportation, commerce, information technology, and finance, especially for the logistics industry, as it directly supports post-production and business and activities. Improving Vietnam’s logistics environment contributes to innovating the growth model and promoting sustainable economic development.

» Thirdly, the establishment and development of logistics real estate, particularly industrial logistics parks and logistics centers (with a special focus on areas along National Route 1A, Ho Chi Minh Road, economic corridors connecting international borders with China, Laos, Cambodia, etc.). Additionally, building logistics industrial parks and centers to connect different regions aims to foster economic linkages, efficiently utilize economic corridors across the country, facilitate the circulation of goods, attract more logistics investments, enhance deep processing of products to increase their value, and promote the import and export of products to various localities, thereby increasing the contribution of the logistics industry to the GDP.

• » Fourthly, considering the development of crucial foundational service sectors for sustainable economic growth and the priority direction of development for the logistics industry until 2050, as outlined in Decision No. 531/QD-TTg dated April 1, 2021, by the Prime Minister, prioritizing investments in the development and modernization of the railway system according to international standards, constructing a railway system connecting international borders (with a focus on the North-South railway line, international connections to China and Europe; building a railway line connecting the Mekong Delta region; the railway line connecting the international border gate of Lao Bao (or Chao-Lo); and rebuilding the railway line connecting the international border gate of Hoa Lu - Binh Phuoc with the Central Highlands...). Effectively exploiting Vietnam’s maritime routes until 2030, with a vision to 2050, is a breakthrough solution to reduce logistics costs, restructure and reorganize production towards large-scale production, creating significant sources of exports, promoting import and export of goods and services. This is a crucial and urgent solution in the new context.

» Fifthly, it is crucial to strengthen the training and development of the workforce for Vietnam’s logistics industry. Currently, the logistics workforce for various sectors, regions, and businesses is lacking both in quantity and quality, and it has not received sufficient attention and investment in training and development. This is a significant factor in fully utilizing the role of Vietnam’s logistics industry in the new context. Therefore, to enhance the training and development of the logistics workforce, there is a need to establish a new training sector for logistics, separated from the existing Sector Code 75106 - Industrial Management, which currently falls under the Industrial Management sector (since October 2017). The issuance of Circular 09/2022/TT-BGDĐT on June 6, 2022, which does not align with the policies and development direction of the logistics industry until 2050, as outlined in Government Decisions 200TTg, 221/ QD-TTg, and 531/QD-TTg, highlights the necessity for the creation of an independent logistics sector or at least a Level II or Level III logistics sector, classified under Sector Code 734: Business and Management or at a position equivalent to the current codes 781 - Tourism, Hotel... and 784 - Transportation Services, as per Circular 09. This would be in line with the policies and development direction of the logistics industry until 2050 and would not contradict Government Decision 531/QD- TTg dated April 1, 2021, Section 01, Item B, II, Item 01, which identifies Logistics Services along with Tourism, Information Technology, and Banking and Financial Services as the top four priority sectors for development from now until 2050.

» Sixthly, the Education Law 2019 also needs to be promptly amended and supplemented to clarify the roles and responsibilities of scientific disciplines in organizing and managing training in current universities to avoid the situation of building a “school within a school.” Relying on the law to eliminate scientific disciplines - which are important foundational units of universities directly involved in training high-quality human resources for society and serve as the cradle for nurturing and forming a team of leading scientists in each field of the national economy. Eliminating scientific disciplines in universities poses a significant risk to the quality of education since many complaints about the quality of education already exist, and businesses have to invest a lot to retrain due to overly broad and general education programs that lack proper management. The consequence would be that the newly formed logistics training sector, in line with the spirit of Decision 200/TTg on February 14, 2017, and Decision 221/TTg on February 22, 2021, might face challenges if universities follow the provisions of the Education Law 2019, making it difficult to achieve the objectives and tasks set out in Decisions 200/TTg and 221/TTg for practical implementation.



By Dang Dinh Dao, PRO. PHD - Dang The Hung, MBA