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Bring enterprises back to the "the race" of economic recovery

To recover and develop the logistics service sector in the time of post pandemic, in the year of 2020- 2021, Vietnam’s logistics service sector should focus on 3 main matters: finance, business activities and applying science technology together with improving human resource. The Vietnam Logistics Business Association (VLA) has suggested solutions to help logistics enterprise to overcome the crisis to have normal operation as they used to.

According to VLA’s survey, the pandemic has had impact on 20%- 50% of the members’ activities (both activities and turnover): sectors of air logistics service, road and railroad suffered the most. Some enterprises have production shut- down and others face the risk of going bankrupt if the pandemic lengthens.

However, from the objective point of view, the pandemic is also an opportunity for logistics service providers have a look at their strategies of business activities, diversifying their markets of service providing. This is also an opportunity for logistics enterprises to find ways of cooperation and recover damages from the crisis.

VLA sent a report to the Ministry of Planning and Investment suggesting solutions to solve problems for logistics enterprises, that is, Vietnam’s logistics service sector should focus on 3 main matters: finance, business activities and applying science technology together with improving human resource.

Finance

One of the most difficulties all logistics service providers is facing is to solve the matter of finance. To solve the matter, VLA suggested the Government should have specific policies to assist logistics service providers in the rest of 2020 and 2021.

Disbursing credit packages and assisting packages to assist enterprises and laborers, ensuring social security. And logistics service enterprise can make good use of these packages and use them efficiently in expanding their business and develop their logistics service providing markets.

Reducing fees on transport infrastructure structures, for example, reducing sea-port fees (not including stevedoring fees, only foreign shipping companies have advantages because they collect high stevedoring extra fees at ports); reducing airport fees. Reducing 50% or offering free use of seaport infrastructure in Hai Phong in the period of a year; reducing transport costs; reducing 20%- 30% of fees of using BOT roads and expressways for cargo transport trucks in the period of 6 months – 1 year.

The Ministry of Transport and the Ministry of Finance should have control methods on foreign container shipping companies on not allowing them to have extra fees or increase fee in the period of 6 months after the pandemic. Having tight control on seaports, depots, CFSs and ICDs on not allowing fee on container stevedoring, warehousing and other extra-fees to help import- export and logistics enterprises.

Business operation

To help enterprises not depend too much on their traditional markets and customers, the Government, with the support from foreign embassies and commerce offices, improves international cooperation, business promotion and introduces new customers and markets to enterprises. At the same time, the Government should facilitate developments of cross-border transport and multi-modal transport by working with neighbor countries to solve problems in accordance to particular suggestions from enterprises in the process of doing business.

Vietnam should have a long-term strategy when over 90% of its import-export goes through sea ports. There should be quick development of deep-water seaports for local and global activities, especially when Vietnam is becoming a regional production and import-export center. The U.S and Japan are having plans to withdraw factories producing necessities out of China and move them to Southeast Asia countries.

Enterprises should make good use of new- generation FTAs, especially EVFTA. Governmental management offices should have more guidance works to enterprises to carry out these agreements and there should be good cooperation mechanisms among ministries and sectors in guidance of enterprises as well.

Applying science and technology and improving quality of the human resource

After the pandemic, an important matter for enterprises coming back to their operation is mostly based on the fact if the human resource enables to meet requirements of recovery and business expansion from the enterprises. The time of crisis is also the time enterprises have to improve their operation machinery and the use of science technology to improve their competition abilities and cut costs.

In a report to the Ministry of Planning and Investment, VLA suggested the Government/ the Ministry of Science Technology financially sponsor VLA to carry out the project e.DO. In the Decision No 283/QD-TT dated February 19th, 2020 by the Prime Minister, the Government stated in development target to 2025, the logistics service sector is a potential service sector that need to be developed. The e.DO projects is one of action plans on the direction of digitalization in the field of logistics. VLA will support enterprises to carry out the task as pushing up the research of e.DO and having exchanges with large enterprises applying new technology solution in the field of logistics services, helping new members use it in their daily activities.

Besides, VLA has suggested the Government/ the Government Office sponsor VLA to carry out research on Regional logistics index. The pandemic showed that most of locales’ activities were carried out for the sake of regional interests. The regional logistics index will help regional management offices and local authorities as well have a better look at logistics connection among regions in the area so that they can have more suitable mechanisms.

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