MAIN CONTENTS

INTRODUCTION
- INTRODUCTION REMARKS. 106
- MESSAGE FROM H.E. MR. MAI TIEN DUNG, MINISTER, DIRECTOR OF THE OFFICE 108
OF THE GOVERNMENT.
- MESSAGE FROM PRESIDENT OF VIETNAM LOGISTICS BUSINESS ASSOCIATION. 110
- LETTERS OF CONGRATULATIONS FROM INTERNATIONAL ORGANIZATIONS. 111
CHAPTER I: OVERVIEW OF THE VIETNAM LOGISTICS BUSINESS ASSOCIATION (VLA). 116

CHAPTER II: OVERVIEW OF VIETNAM'S ECONOMIC DEVELOPMENT IN 2017 120

AND THE FIRST 6 MONTHS OF 2018.

CHAPTER III: INTRODUCTION OF A NUMBER OF RECENT IMPORTANT REGULATIONS 124

RELATING TO THE LOGISTICS SERVICES INDUSTRY.

CHAPTER IV: GENERAL INTRODUCTION OF NATIONAL SINGLE WINDOW (NSW), 136

ASEAN SINGLE WINDOW (ASW) AND THE AUTOMATED CLEARANCE SYSTEM.

CHAPTER V: LOGISTICS AND TRANSPORT INFRASTRUCTURE DEVELOPMENT. 145

CHAPTER VI: SITUATION OF VIETNAM LOGISTICS SERVICES INDUSTRY. 165

CHAPTER VII: RECOMMENDATIONS TO REDUCE LOGISTICS COSTS, 186

ENHANCE COMPETITIVENESS AND DEVELOP VIETNAM’S LOGISTICS
SERVICE INDUSTRY IN THE TIME TO COME.

CONCLUSION 194

104 Whitebook 2018

Whitebook 2018 105
 INTRODUCTION REMARKS

“Logistics service” is any service relating to “the process of planning, implementing and controlling
the efficient, effective flow and storage of goods, services and related information from point of
origin to point of consumption for the purpose of conforming to customers’ requirements”. All
logistics management activities involved are a part of the supply chain management. A national
logistics system consists of 4 components: Institution governing logistics - Infrastructure (hard &
soft) - Logistics service providers and Logistics customers.
Therefore, today, logistics plays an important role in the economy and social life. The Resolution
of the XII Party Congress identified that logistics is a "high added value services industry" and we
should “modernize and expand" the logistics services.
Towards the effective implementation of the tasks of the Action Plan on Enhancing Competitiveness
and Developing Logistics Services to 2025, attached to Decision 200/QD-TTg, dated 14th February
2017, and on the occasion of its 25th founding Anniversary (18/11/1993 - 18/11/2018), the
Vietnam Logistics Business Association (VLA) publish the VLA Whitebook 2018, which aims at
providing in a full and most reliable manner information and data on the Association in particular and
the Vietnam logistics services industry in general, and specific recommendations for the development
of the industry in Vietnam presently and in the future. This is a useful media publication not only
for logistics businesses’ use in their business activities in the territory of Vietnam but also providing
information to the State managerial agencies’ reference in the work of management and policy
making relating to the logistics services industry. The VLA Whitebook 2018 also facilitates foreign
companies to have information on expanding investment, cooperation and business development
with Vietnam logistics enterprises. The VLA Whitebook 2018 is published in Vietnamese and
English.
In that context, the VLA Whitebook 2018 is structured in 10 parts, focusing on the main contents
which include:
I. Introduction remarks.
II. Overview of the Vietnam Logistics Business Association.
III. Overview of Vietnam’s economic development in 2017 and the first 6 months of 2018.
IV. Brief introduction of the recent important regulations relating to logistics service industry.
V. General introduction of the national single window and the ASEAN single window, and the
automatic clearance system.
VI. Logistics infrastructure and transport development.
VII. Vietnam logistics service industry.
VIII. Recommendations by VLA to cut down logistics costs, enhance competitiveness and develop
Vietnam’s logistics service industry in the time to come.
IX. Conclusion.
X. Appendix (See Vietnamese version).
The VLA Whitebook 2018 was done with the close guidance of the Steering Committee, chaired
by the VLA President and participation of the Editorial Board including both internal and external
logistics professionals. The information was taken from direct survey sources and from the most up-
to-date sources of reference in the country and abroad. Hopefully, the contents of the Whitebook will
meet the readers’ requirements and the use of VLA Members, businesses, managers and researchers
in the logistics services industry in Vietnam.

106 Whitebook 2018

Photo: Nguyen Thu Van Whitebook 2018 107
 MAI TIEN DUNG MINISTER,
DIRECTOR OF
THE OFFICE OF THE
GOVERNMENT Ha Noi, 01st November 2018

MESSAGE FROM H.E. MR. MAI TIEN DUNG,

MINISTER, DIRECTOR OF THE OFFICE
OF THE GOVERNMENT

O
n the occasion of the 25th Founding Anniversary of the Vietnam Logistics
Business Association, I would like to send my best congratulations to the
Association and logistics service providers of Vietnam.

On November 18, 1993, the Vietnam Freight Forwarders Association was established
which was the predecessor of the Vietnam Logistics Business Association (VLA) today.
Over the past 25 years, the Association has unceasingly grown and developed showing
the role of the representative organization for the enterprises operating in the field of
providing freight forwarding and logistics services of Vietnam, bridging the Governmental
Agencies and these enterprises, making an important contribution to the development of
the logistics services industry in our country, to the trade field and the national economy

The Government defines that logistics is an important services industry in the general
structure of the national economy, playing the role of support, connection and
promotion of the socio-economic development of the entire country as well as each
locality, making a contribution to enhancing the competitiveness of the economy. To
develop the logistics services industry, the Government commits to support and create
a favorable environment for increasing competitiveness and developing Vietnam’s
logistics services. The Prime Minister issued Decision No.200/QD-TTg dated February
14, 2007 approving the Action Plan to enhance competitiveness and develop the
logistics services industry in Vietnam by 2025, setting up 06 objectives and 60 specific
tasks with many comprehensive solutions in order to make the logistics services industry
of our country overcome the challenges, difficulties to reach the advanced level of the
region and the world, meeting the requirements of national economic development. The
Vietnam Logistics Business Association and its members have positively implemented
the Action Program with worth-noted initial results. I am happy to note that according
to the Logistics Performance Index (LPI) made public by the World Bank (WB), in 2018
Vietnam’s LPI ranked 39 out of 160 countries, rising by 25 ranks as compared to 2016,
ranking third among ASEAN Member Countries.

108 Whitebook 2018

In the context of ever deepening and
broadening integration and the strong
effects of the 4th Industrial Revolution
to the economy, the logistics services
industry of our country is also faced with
many difficulties and challenges. Given
the requirements for development in
the coming period, the Government
highly expects that the Association and logistics businesses continue to make many
more breakthroughs, speed up application of modern technology, enhance management
capacities, increase cooperation and linkage locally, regionally and globally, mange well
supply chain, reduce costs, cut short goods movement time, pay attention to training of
logistics high-quality human resources and early set up more and more logistics service
providers having high competitiveness in the local and international markets.

Once again, on behalf of the Office of the Government and the Advisory Council on
Administrative Procedures Reform of the Prime Minister, I would like to send my warmest
greetings to the Vietnam Logistics Business Association and logistics service providers,
I wish the Association and the businesses ever strong growth and many successes,
and the Vietnam logistics services industry ever development, making more positive
contributions to the national economy.

Cordially!

Mai Tien Dung

Minister, Director of the Office of the Government
Chairman of the Advisory Council on Administrative Procedures Reform

Whitebook 2018 109

 MESSAGE FROM THE PRESIDENT
OF VIETNAM LOGISTICS BUSINESS ASSOCIATION

T
he Vietnam Logistics Business Association (VLA), formerly the Vietnam Freight Forwarders Association, was
established on November 18, 1993 as "the social and professional organization of organizations, enterprises and
Vietnamese citizens engaged in commercial activities on forwarding, warehousing and logistics services under
the Commercial Law, voluntarily established, not self-seeking for the purposes of cooperation, co-ordination, support
and mutual assistance in professional development, improving the efficiency of operations and protecting the legitimate
interests of its members; on that basis, they shall cooperate with organizations operating in this field in the region and in
the world according to the provisions of law and regulations".

Over 25 years of building and development, the Association has developed strongly in both quantity and quality of
its activities. From 07 Members in 1994, to the end of July 2018, the Association had 377 Members including 320
Ordinary Members and 57 Associate Members with 37 Associate Members who are FDI enterprises. At present,
there are members from the banking business and universities educating logistics human resources. The Association
has gathered the leading logistics services providers in Vietnam out of about 4,000 professional enterprises. The
role and position of the Association has improved significantly both domestically and internationally.

Currently, the Association is an official member of the International Federation of Freight Forwarders Associations
(FIATA) and the ASEAN Federation of Forwarders Associations (AFFA). In the recent time, the Association has
promoted well the role of social criticism to State agencies relating to logistics activities, promptly reflected the
opinion of the logistics business community and protected its Members’ legitimate interests, particularly in the
development and implementation of Decision 200/QD-TTg, dated 14th February 2017 of the Prime Minister
promulgating Action Plan to improve Competitiveness and Development of Vietnam Logistics Services up to 2025.

The Meeting of the Association Executive Board in December 12, 2017 decided to take the November 18 of every
year as the Vietnam Logistics Day and publish VLA Whitebook 2018. Along with other activities, the publication of
the VLA Whitebook 2018 is one of the realistic activities towards marking the 25th Anniversary of the founding of the
Association. The VLA Whitebook 2018 is structured in ten parts, focusing on the main components on developing
the Vietnam logistics services as set out in the Decision 200/QD-TTg, dated 14 February 2017 by the Prime Minister
and the concrete recommendations by the Association.

VLA Whitebook 2018 is written in Vietnamese and English with the participation of the Editorial Board composed of
experts and professionals inside and outside the Association and a large number of Members of the Association on the
basis of information sources, reliable database system from the latest surveys and researches of the Association. We hope
that the Association's VLA Whitebook 2018 will be a valuable source of reference for businesses in the development
of production and business, for researchers at home and abroad and for those who involved in education and training
as well as policy makers on logistics service development in Vietnam.

This is the first time the Association publishes the VLA Whitebook 2018, hence certainly there are shortcomings, not
fully meeting requirements of the readers. We look forward to receiving comments from readers in order that we could
improve in subsequent publications.

The Association would like to introduce the VLA Whitebook 2018 to our readers and sincerely thank you.

Le Duy Hiep
President of the Association

110 Whitebook 2018

 LETTERS OF CONGRATULATIONS FROM
INTERNATIONAL ORGANIZATIONS

FIATA GREETINGS

Switzerland, 5th October, 2018

Dear colleagues and friends of the Vietnam Logistics Business Association,

It is my great pleasure and honour to congratulate the Vietnam Logistics Business

Association for its 25th Anniversary, which is almost the same length of time since VLA
joined FIATA as an Association Member.

For more than two decades, VLA has worked closely with FIATA to promote the
international freight forwarding and logistics industry in Vietnam and in the ASEAN
countries.

Taking vocational training and education as an example, more than 300 certificates of
FIATA Minimum Standards and FIATA Higher Diploma in Supply Chain Management
have been issued by VLA by far. With the assistance of the FIATA Foundation, VLA
also held a “Training of Trainers” session to provide the industry with more qualified
trainers, which will help to improve the overall professional level in Vietnam.

FIATA is glad to have worked with VLA in the past and is impressed by the achievements
made. On this occasion FIATA would like to thank VLA for the excellent cooperation.

In the future we would like to continue our efforts to support VLA in providing a
continuously improving platform for the forwarders and logistics services providers in
Vietnam, which will enable them to learn the best practices of the industry worldwide
and lay the foundation for further expanding their international business.

Happy 25th birthday, VLA!

Babar Badat
President of FIATA

Whitebook 2018 111

 LETTERS OF CONGRATULATIONS FROM
INTERNATIONAL ORGANIZATIONS

THE ASEAN FEDERATION OF FREIGHT FORWARDERS

ASSOCIATION (AFFA)

Attn Ref Nbr. 010/AFFA-C/X/2018

Jakarta, 10th October 2018.

Dear Sir,
On the occasion of the 25th Anniversary of the VLA, on behalf of AFFA, I would like to convey
my warm greetings and best wishes to you and through you, to all VLA Members.
In September 2018 AFFA members has taking part in realizing connectivity of the region to the
world by participating the connectivity between ASEAN-China up to Europe by signing MoU of
ASEAN-China Multimodal Transport Connectivity Alliance between AFFA and China logistics
private sectors. A prove of the existence of AFFA and its important key roles in facilitating trade
and connectivity in ASEAN region and beyond.
A number of events will be held in the course of the year across Asia Pacific where AFFA
Members shall mark this as another important milestone in our history and makes our region a
key player in the logistics industry.
Let me take this opportunity to also assure you of our desire to continue to work closely with
VLA in regional fora on issues of mutual interest and concern, especially as a 21st century
economic and internet disruption has become new challenge for logistics industry.
I greatly appreciate the constant support provided by the VLA for strengthening AFFA, and I look
forward to working with you and all AFFA Members to take our strategic partnership into higher
orbit.
I would like to take this opportunity to congratulate all VLA Members on the momentous
occasion of the 25th anniversary of VLA. With the support of VLA and rest of all AFFA members,
I am sure that we will make this commemoration a resounding success..
Yours sincerely,
Yukki Nugrahawan Hanafi
Chairman

112 Whitebook 2018

 LETTERS OF CONGRATULATIONS FROM
INTERNATIONAL ORGANIZATIONS

SINGAPORE LOGISTICS
ASSOCIATION GREETINGS

18th September 2018

Mr. Le Duy Hiep, Chairman Vietnam Logistics
Business Association (VLA)
Dear Hiep,

It is with great pleasure that I am writing this letter, to congratulate Vietnam Logistics Business
Association on your 25 years of heritage and contributions to the logistics industry. On behalf of
the Singapore Logistics Association, we extend our heartiest congratulations to you and the team
for achieving this memorable milestone with great success.
Vietnam Logistics Business Association has always served the industry with commitment. The
dedication of your team has enabled the association to grow to greater heights so as to serve
your members better. Your continued efforts to raise the competitiveness of Vietnam’s logistics
companies through recommendation of new policies, investments in infrastructure development
and collaboration with foreign businesses have provided many new opportunities for the rapid
changing landscape.
It has been my pleasure working with you all these years. Our discussions have always been
constructive and both associations are aligned in our vision of enhancing trade and business
connectivity in the region. Our excellent relationship has also enriched our collaborations at
AFFA and FIATA in promoting trade facilitation and development of Logistics professionals.
Looking ahead, we are confident that both associations will continue to work hand in hand to
deliver the best services for our members as well as the Logistics industry.
Once again, congratulations from all of us and we wish you continued success in the many years
to come.
Warmest regards,
Stanley Lim, PBM
Hon. Treasurer, Chairman, Internationalisation Committee
Singapore Logistics Association

Whitebook 2018 113

 LETTERS OF CONGRATULATIONS FROM
INTERNATIONAL ORGANIZATIONS

PYEONGTAEK PORT
CORPORATION GREETINGS

On behalf of the Gyeonggi Province Government, Pyeongtaek City, and entire organizations
in Pyeongtaek port, Korea, Gyeonggi Pyeongtaek Port Corporation is pleased to extend our
heartiest congratulations to Vietnam Logistics Business Association (VLA) for its 25th Founding
Anniversary.
Since the MOU agreement signed between VLA and Gyeonggi Pyeongtaek Port Corporation in
February 19, 2014, we together have been doing our best co-operation to promote more trade
and to facilitate the logistics industry in both countries.
With the heart-felt friendship and immeasurable contributions of VLA in the era of Vietnam and
Korea FTA, we could have valuable network with Vietnam Government, related associations
and Vietnam local companies. In this result, we are so proud to have more trade and academic
delegations, cargo volume between Pyeongtaek port and Vietnam increase every year, Korean
shipping companies are able to launch new regular container services.
Pyeongtaek port organizations, logistics providers, freight forwarders, shippers and all residents
would like to thank you for your support and honoring our strong relationship and we hope to
have continued prosperity of VLA and its Members.
Congratulations for the 25th Founding Anniversary of VLA from all Pyeongtaek port people and
best wishes for continued success in the years ahead.
Kim Jae-Seung
Vice President of Gyeonggi Pyeongtaek Port Corporation

114 Whitebook 2018

Photo: Nguyen Thanh Trung Whitebook 2018 115
 CHAPTER I:
OVERVIEW OF THE VIETNAM LOGISTICS
BUSINESS ASSOCIATION (VLA)

A BRIEF HISTORY

V
ietnam Logistics Business Association (VLA), formerly Vietnam Freight Forwarders Association (VIFFAS),
was established under Decision No. 5874/KTTV on November 18, 1993 of the Office of the Government.
By Decision No. 07/QD-BNV dated January 4, 2013 of the Ministry of Home Affairs, VIFFAS was renamed
to Vietnam Logistics Business Association (VLA) in order to meet the development process of the Vietnam logistics
services industry.

The Vietnam Logistics Business Association is a professional associated organization established voluntarily by
the organizations, enterprises and citizens of Viet Nam which have registered to operate in the freight forwarding
and trade logistics industry in accordance with the Commercial Law with the aim to cooperate, associate and help
each other in developing professional activities, improving business efficiency and protecting the legal interest of
the Members and on this basis of integrating with such activities of professional organizations in the region and
the world in accordance with the law.

Members of the Association operate their business in accordance with the Standard Trading Conditions of the
Vietnam Logistics Business Association (STC). The STC was amended once to meet with the logistics services
industry development. The present STC took effect on 01/01/2017 ( See Appendix 1).

A. PRINCIPLES AND OBJECTIVES OF THE ASSOCIATION

- Vision: Connecting and cooperating the domestic and foreign freight forwarders, transport and logistics service
providers in order to create a leading industry of Vietnam.

- Mission: To enhance the professionalism and excellence, to promote the modern logistics, integrating the
national logistics with the region and global in order to efficiently contribute to the development of enterprises in
the industry as well as the country’s economic growth.

- Action slogan: Connecting Logistics Professionals.

Over 25 years of building and development, the Association has developed strongly in terms of both quantity and
quality of operation, truly representing the interests of its Members, as a bridge among Vietnam’s logistics service
providers and between its Members with State agencies. The role and position of the Association is increasingly
prominent in the country as well as in the international arena, manifested most clearly are the work of social
criticism and international cooperation.

B. ANNUAL GENERAL MEETINGS

As of 2017, the Association has convened 7 Annual General Meetings:
- The First Term: 1994 with 7 Members. The Association Chairman: Mr. Pham Trong Hoai.
- The Second Term: 1997 with 18 Members. The Association Chairman: Mr. Pham Trong Hoai.

116 Whitebook 2018

- The Third Term: 2000
- The Fourth Term: 2003
- The Fifth Term: 2007
- The Sixth Term: 2010
- The Seventh Term: 2015
with 41 Members. The Association Chairman: Mr. Bui Ngoc Loan.
with 60 Members. The Association Chairman: Mr. Bui Ngoc Loan.
with 82 Members. The Association Chairman: Mr. Bui Ngoc Loan.
with 135 Members. The Association Chairman: Mr. Do Xuan Quang.
with 264 Members. The Association President: Mr. Le Duy Hiep.

C. MEMBERSHIP
In 2017, The Association had 342 Members, including 291 Ordinary Members, 51 Associate Members of which
34 Members are FDI enterprises. As of 31/07/2018, the Association had 377 Members including 320 Ordinary
Members and 57 Associate Members with 37 Associate Members who are FDI enterprises, representing the
community of Vietnam logistics service providers.

The Association Members have increased in both quantity and quality. Most of the major logistics service providers
in Vietnam have become Members of the Association including Members as banks and universities

D. CONNECTIVITY AND CO-OPERATION

In May 1994, VLA (VIFFAS) was the only representative of Vietnam to become an
official Member of the International Federation of Freight Forwarders (FIATA).

In November 1999, VLA (VIFFAS) became a Member of the ASEAN Federation of

Freight Forwarders Associations (AFFA).

In April 14th, 1994, VLA became an official Member of Vietnam Chamber of

Commerce and Industry (VCCI).

As of August 2018, the Association has signed cooperation agreements with

Many local business Associations, such as:
- Vietnam Textile and Apparel Association (01/09/2016).
- Vietnam E-commerce Association (09/12/2016).
- Vietnam Seaports Association (02/02/2016).
- Vietnam Private Sector Forum (09/12/2016).

The relevant authorities, such as:

- The Vietnam Maritime Administration (03/2016).
- The Transport Department, MOT (18/05/2016).
- Saigon New Port (30/03/2016).
- The Customs Control and Supervision (26/9/2017).
- Directorate of Vocational Education & Training (14/08/2018).

And the Universities and Academies, such a:

- Ho Chi Minh City International University (23/07/2014).
- Ho Chi Minh city University of Transport (05/2017).
- University of Transport and Communications (11/2017).
- University of Transport Technology Ha Noi (11/2017).
- Vietnam Aviation Academy (11/2017).
- Vietnam National University Ha Noi (12/2017).
- Foreign Trade University (4/2018).
- University of Economics HCMC (06/2018).
- Academic of Finance (26/07/2018).

Whitebook 2018 117

The Association has also concluded international cooperation agreements with foreign Associations and
organizations, such as:
- VLA and the Pyeongtaek Port of South Korea (19/02/2014).
- VLA with the Government of Qiannan Prefecture, Guangdong Logistics Industry Association, Hong Kong
Logistics Association, ASEAN Trucking Federation for cooperation on Sichuan - Guizhou - Guangdong -
Hong Kong - Macao - South China International Logistics Services Corridor (09/08/2017).
- VLA with the Chamber of Hong Kong Logistics Industry (CHKLI) Association (23/11/2017, aiming to promote
modern logistics services, such as e-commerce, end-to-end delivery and full package services between Hong
Kong (China), China and Vietnam (23/11/2017).
- In December 2017, VLA signed a cooperation agreement with the Singapore Logistics Association to assist
the service providers of the two Associations in contributing to the economic development between the two
countries and ASEAN Member Countries as well.
- VLA with China Chamber of International Commerce Chongqing Chamber of Commerce, and VLA with
Quang Xi Logistics Association (05/08/2018).
- Memorandum of Understanding sign between Aus4Skills Program (Australia) and VLA on Promoting Industry
Linkages in Vocational Education and Training in Logistics (14/08/2018).
- Memorandum of Understanding signed on the Formation of China - ASEAN Federation of Forwarders
Associations ( AFFA) Multimodal Transport Connectivity Alliance on 12/09/2018.

E. THE ORGANIZATIONS UNDER VLA

Vietnam Logistics Research and Development Institute (VLI) is a logistics research and training organization under
the VLA. Website: www.vli.edu.vn Fanpage: www.facebook.com/vli.edu.vn

Vietnam Logistics Review (VLR) is an organ of VLA. The magazine is released monthly in Vietnamese and the
main articles are translated into English. The magazine has its website www.VLR.vn.

THE ASSOCIATION OFFICES

When established, the Association was based in Ha Noi. In April 2005, the head office of the Association was
transferred to Ho Chi Minh City. Currently, the Association has representative offices in Ha Noi and Danang City.

Head Office Address: 5th Floor, Saigon Port Building, No. 3 Nguyen Tat Thanh,
District 4, Ho Chi Minh City.
Tel: (+84-28).39433045, Fax: (+84-28).39432658, Website: www.vla.com.vn
E-mail: vla.hcm1@vla.com.vn

Ha Noi Representative Office, established on 5th April 2005

Room 707, 7th Floor, Thang Long Ford Building, 105 Lang Ha, Dong Da, Ha Noi
Tel: +(84-24).35627709, Fax: +(84-24).35627709, E-mail: vla.hnrep@vla.com.vn

Representative Office in Da Nang City, established in March 15th 2015

2nd Floor, 421 Tran Hung Dao Street, Son Tra District, Danang City
Tel: +(84-511).3888 009 (102) - Fax: +(84-511).3887 739
E-mail: danang@vla.com.vn

118 Whitebook 2018

 THE EXECUTIVE COMMITTEE OF
THE ASSOCIATION, THE PRESENT TERM
EXECUTIVE COMMITTEE

Mr. LE DUY HIEP

President

Mr. DO XUAN QUANG Mr. TRAN BINH PHU Mr. DANG VU THANH
Senior Vice President Vice President Vice President

Mr. DAO TRONG KHOA Ms. DANG THI MINH PHUONG Mr. NGUYEN DUY MINH
Vice President Vice President General Secretary

Mr. NGUYEN THANH BINH Ms. VO THI PHUONG LAN Mr. MAI VAN QUANG
Executive Board Member Executive Board Member Executive Board Member

Mr. NGUYEN NANG TOAN Mr. NGUYEN XUAN GIANG Mr. TRAN DUC NGHIA
Executive Board Member Executive Board Member Executive Board Member

Whitebook 2018 119

 CHAPTER II:
OVERVIEW OF VIETNAM'S ECONOMIC DEVELOPMENT
IN 2017 AND THE FIRST 6 MONTHS OF 2018

The economic development of Vietnam10% in 2017 and the first 6 months

15.34% of
Nông, lâm, thủy sản

2018 not only created momentum for the economic development in 2018
but also in the following years. This is a solid foundation for the logistics
Công nghiệp - xây dựng

industry in Vietnam to continue to grow and achieve 33.34%

41.32% positive results Dịch
in vụ2018.
This is partly reflected in the World Bank's LPI Report 2018 with the ranking
of Vietnam increased by 25 ranks to 39/160. Thuế sản phẩm trừ
trợ cấp sản phẩm

I. GDP GROWTH STRUCTURE OF GDP IN 2017 BY SECTOR

According to the data released
by the General Statistics Office
(GSO) on 29/12/2017, the
gross domestic product (GDP) 10% 15.34% Agriculture, forestry,
aquaculture

in 2017 increased by 6.81%, Industry - construction

exceeding the target set (6.7%)
and higher than the increase of 41.32% 33.34% Service

the years 2011 - 2016. The

size of the economy (at current Product taxes minus
product subsidies
prices) reached VND 5,007.9
trillion; GDP per capita reached
USD 2,385, an increase of USD (Source: Vietnam General Statistics Office)
170 compared to 2016. Average
CPI (Consumer price index) in 2017 compared to 2016 increased by 3.53%.

GDP growth rate in the first 6 months of 2018 was 7.08% over the same period of 2017 and
the highest increase since 2011 to date. Of which agriculture - forestry - fishery increased by
3.93%, contributing 9.7% to the general growth rate; Industrial and construction sector increased
by 9.07%, contributing 49%; Services sector increased by 6.9%, contributing 41.4% to the overall
growth rate.

To date, Vietnam has signed and is implementing 17 Free Trade Agreements (FTAs), including
the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the
EU - Vietnam Free Trade Agreement (EVFTA), and been implementing 17. Once the FTAs are
implemented, tariffs on imports and exports will decrease sharply, with many commodities at zero,
investment surging and trade growing rapidly and in turn the national economy development.
These are the preconditions for the logistics services industry in Vietnam to develop strongly in
the time to come.

II. ACTIVITIES OF LOGISTICS ENTERPRISES

In 2017, the number of newly established enterprises increased a record compared to the previous
years, including the logistics service providers of Vietnam.

120 Whitebook 2018

 21,506
13,414 15,419 12,478 12,113
9,818 9,501 9,467

2013 2014 2015 2016 2017

Thành lập Quay lại hoạt động Tạm ngừng Quay lại hoạt động Giải thể

The Enterprises registered to PERFORMANCE OF ENTERPRISES OVER THE YEARS

establish in 2017 increased by
25% compared with 2016. In Business status
2017, the country had 126,859
126,859
registered enterprises with a
total registered capital of VND
110,100
94,754
1,295.9 trillion, up 15.2% in 76,955 74,842 71,391
the number of enterprises and 60,737 58,322 60,667 60,553
increased by 45.4% in registered
capital compared to 2016; the 26,448
21,689
average registered capital of 13,414 15,419
21,506
12,478 12,113
9,467
newly established enterprises
9,818 9,501

was VND 10.2 billion. 2013 2014 2015 2016 2017

Established Reinstated Temporarily stoppeb Disolved

About the operation of enterprises

in the first 6 months of 2018, (Source: Vietnam General Statistic Office Report on Socio-Economic Situation)
64,535 enterprises registered for
new establishment, 16,449 enterprises returned to operation, 6,629 enterprises dissolved and 52,803
enterprises temporarily suspended or awaiting the dissolvent. Thus, the total number of enterprises of
21,552 increased as compared to 2017.

As per VLA’s study in 2016 regarding the total of LSPs in VN was 22,366 companies with 3,473
companies in among of them related international operation. In 2018 the total of LSPs in VN was
30,000 companies (increased 30%) with 4,000 companies in among of them related international
operation (increased 15% compared to statistic of 2016)

III. IMPORT - EXPORT ACTIVITIES

1. Import-Export turnover
In 2017, Vietnam's trade balance reached a high record. The export turnover in 2017 increased
by 442% compared to 2007, when we newly joined WTO. In 2017, the total import-export
turnover of Vietnam reached USD424.87 billion, of which the export reached USD213.77 billion,
and the import reached USD211.10 billion. The export turnover exceeded the import turnover
of USD2.77 billion. The import turnover of goods in 2017 increased by 20.8% as compared to
2016, of which the domestic economic sector imported USD84.7 billion, up 17%; the import
value of foreign invested sector was USD126.4 billion, increasing by 23.4%. The export turnover
of goods in 2017 reached the highest increase in many years which was 21.1%. In which the
domestic economic sector exported USD58.53 billion up 16.2%. The foreign investment sector
(including crude oil) reached USD155.24 billion, an increase of 23%.

According to the General Statistics Office, the export turnover in the first nine months of 2018
was estimated at USD178.91 billion, an increase of 15.4% over the same period of 2017.
The import turnover of nine months was estimated at USD173,52 billion, up 11.8% over the
same period last year. There are 26 items with export turnover of over $ 1 billion, accounting
for 90.3% of the total export turnover of the country, of which 5 items reached over USD10
billion, accounting for 58.2%, including phones and components USD36.1 billion; textiles and
garments USD22.6 billion; electronics, computers and components USD21.6 billion; machinery,
equipment and spare parts USD12.1 billion; footwear USD11.8 billion

2. Import-Export services turnover

The service export turnover in 2017 was estimated at USD13.1 billion, up 7% against 2016,
of which transport service exports reached USD2.6 billion, accounting for 19.7% and increasing
by 5.7%. Import turnover of services in 2017 was estimated at USD17 billion, up 1.6% against
last year, of which import of transportation services reached USD8.2 billion, accounting for 47.9% of

Whitebook 2018 121

 EXPORT STRUCTURE DURING THE PERIOD 2011 AND 2017

Export-import turnover for the period 2011-2017

250000

200000

150000

100000

50000

0
Total
Domestic
PDI
Total
Domestic
PDI
Total
Domestic
PDI
Total
Domestic
PDI
Total
Domestic
PDI
Total
Domestic
PDI
Total
Domestic
PDI
2011 2012 2013 2014 2015 2016 2017

(Source: Vietnam General Department of Customs

total import turnover, 2.8% lower than in 2016. In 2017, the service trade deficit was USD 3.9 billion,
equaling 29.9% of the service export turnover.

Total retail sales of consumer goods and services in 2017 were estimated at VND 3,934.2 trillion,
an increase of 10.9% over 2016. Of which, goods transport in 2017 reached 1,442.9 million
tons, an increase of 9.8% over the same period of 2016 and 268.9 billion tons-kilometers,
up 6.8%.

The service sector continued to maintain a high growth rate throughout 2017, achieving the
highest growth since 2010. The growth drivers of this sector are mainly from the wholesale and
retail sectors; financial, banking and insurance services and real estate business. In particular, the
wholesale and retail trade - the industry with the highest proportion in the service sector - had a
high growth rate of 8.36%, contributing 0.79%s to the overall growth rate of the economy.

IV. ATTRACTING FDI

Since the Law on Foreign Investment in Vietnam (12/1987) operated to the end of 2017,
Vietnam has attracted USD318.72 billion with 24,784 FDI projects from foreign investors in 19
areas in Vietnam. FDI is currently an important supplementary source, accounting for about 25%
of the total social investments, contributing to about 20% of the country's GDP. By June, 2018
the investment capital increased to USD 326,300 billion with 25,949 projects. The implemented
capital is equal to 56% of the total registered capital (about USD180.7 billion).
(Source: Vietnam General Statistic Office and Department of Foreign Investment).

In particular, as the logistics market in Vietnam has a lot of potentials for development, among the top
logistics companies in the world, many companies have been present in Vietnam to provide logistics
services for global manufactures on the basis of Vietnam's WTO commitments and new generation FTAs.

Foreign Direct Investment in the first 6 months of 2018: 1,366 projects had been attracted with USD
11.8 billion, although the 0.3% decrease compared to the first six months of 2017 in terms of the
registered capital. However, the ratio of disbursed capital/registered capital increased by 8.4% (USD
8.37 billion), showing the positive effect of foreign investors. If the additional capital is included for
the existing projects and capital contribution of foreign investors, the total FDI inflow into Vietnam

122 Whitebook 2018

in the first half of this year was USD 20.33 billion, up 5.7 % over the same period of 2017. Of
56 countries and territories with new FDI projects in Vietnam in 2018, South Korea topped with
USD3.8 billion, accounting for 39.2% of total newly registered capital; Singapore ranked second with
USD1.37 billion (14%). This strengthens investors’ confidence in the macro environment and the
investment environment in Vietnam. Increased investment and trade will motivate the logistics industry
to develop. 676.3

579.7 594.9
V. LOGISTICS FOR E-COMMERCE 519.5 529.6
557.5
486.8
The year 2017 witnessed an explosion of e-Commerce,
440.5 as well 468.5
as E-Logistics, a new trend
in international trade, with encouraging information: The number of online318.1shoppers 347.9 in
410.5 396.2

major cities such as Ha Noi and Ho Chi Minh City increased from 265.440% to 52% between
240.1
2016 and 2017. 66% of online shoppers buy through Facebook, which is much higher than
47% in 2016. According to Vietnam e-Commerce and Digital Economy Agency (VECITA),
MOIT, e-commerce increases 35% annually; Vietnam’s e-commerce retaile turnover in the
period of 2016-2020 is expected to 2013 2014 2015 2016 2017

increase 20% per year and the turnover is INVESTMENT CAPITAL STRUCTURE OF THE WHOLE SOCIETY IN 2017
Nhà nước Ngoài nhà nước Nước ngoài

estimated to reach USD10 billion by 2020. (IMPLEMENTED CAPITAL, BILLION USD)

Therefore, logistics service providers must
expand their E-Logistics channels towards
professionalism to meet the demand for 676.3

electronic products. 557.5

579.7 594.9

486.8 519.5 529.6

468.5
The trend of multi-channel sales (instead
440.5
410.5 396.2

of single-channel retailing) is becoming

347.9
318.1
265.4
widespread in the world, so it must also 240.1

be systematically deployed in Vietnam

to match the requirements of the
integration. Therefore, retail businesses and 2013 2014 2015 2016 2017
e-commerce businesses must restructure By the state Not by the stale Foreign
their logistics system to meet the diverse
needs of customers. In other words, the (Source: VIRAC - Vietnam Research & Consultancy Joint Stock Company)
logistics industry must develop in the
direction of serving multi-channel retailers rather than traditional single-channel distribution.

The COD delivery rate still stands at 88% and the return rate at B2C websites is between
10% -15%, which increases the costs of transportation and operation of the company.
E-Logistics will improve delivery to minimize the cost of logistics system to increase price
competitiveness for products and attract more buyers due to low cost factor.

A report of the Vietnam E-Commerce Association (VECOM) at VOBF 2018 held in Ha Noi, March
14, 2018 revealed that as of 2016, 32% of enterprises have established business relations with
foreign partners through online channels. Meanwhile, 11% of businesses choose to participate
in e-commerce and website operations. VECOM's indirect survey in early 2018 by a number of
delivery companies showed that delivery service revenue growth would increase from 62% to
200% between 2018-2020.

This trend is significant for 3PLs and forwarders, requiring them to build optimum pickup networks,
reduce inventory, inventory costs, pay attention to consolidations and cross - docking, enhancing
the advantages of electronic orders and last-mile delivery.

The changes in e-commerce in the world and in Vietnam have pushed the Vietnam
logistics service industry to improve its service supply modes, more professional and
effective.

Whitebook 2018 123

 CHAPTER III:
INTRODUCTION OF A NUMBER OF
RECENT IMPORTANT REGULATIONS RELATING TO
THE LOGISTICS SERVICES INDUSTRY

I. ACTION PLAN TO ENHANCE COMPITITIVENESS AND DEVELOP

LGOSTICS SERVICES UP TO 2025

On February 14, 2017, the Prime Minister issued Decision No. 200/QD-TTg "On
approving the Action Plan on Enhancing Competitiveness and Developing Vietnam
Logistic Services to 2025" (hereinafter called the Action Plan). This is the first time we
have a national action plan on the development of the logistics serviceS industry in a
comprehensive way and is a driving force and orientations for the development of logistics
services now and in the near future.

1. Six viewpoints set out by the Action Plan on the logistics service developmewnt
- Logistics is an important services industry in the overall structure of the national economy,
playing a role of supporting, connecting, and promoting eco-social development of the whole
country as well as an individual locality, contributing to enhancement of the competitiveness of
the national economy.
- Developing logistics into a service industry that brings high value-added, attaching logistics
services to development of manufacturing, exportation and importation and domestic trading,
and promotion of infrastructure of
transport and information technology.
- Promoting a sound logistics
market with equal opportunities for
all enterprises belonging to every
economic sector, encouraging
attraction of internal and external
investments in accordance with
Vietnamese laws and international
treaties to which Vietnam is a
contracting party.
- Bringing into full play the advantages
of the nation’s strategic geographical
position, enhancing links to turn
Vietnam into a key logistics hub in the
region.
- Focusing on improving
competitiveness of logistics providers,
(Sources: Report on Logistics Vietnam 2017- MOIT) developing logistics providers in terms

124 Whitebook 2018

 of quantity, scales and skills to obtain high competitiveness both inside and outside of Vietnam.
- The State undertakes the role of supporting and creating a favorable environment for
enhancing competitiveness and developing logistics services of Vietnam.

2. Objectives
- By 2025, the contribution of logistics industry to GDP shall be 8% -10%, the growth rate
shall be 15%-20%, the logistics service outsourcing shall reach 50%-60% and logistics costs
shall be reduced equivalent to 16%-20% of GDP, ranking among the top 50 leading countries
of the world according to World Bank Logistics Performance Index (LPI).
- To concentrate on attracting investments in logistics infrastructure development, to establish
regional and international logistics centers, and to improve efficiency of the connection between
Vietnam and other countries, turning Vietnam into a logistics hub of the region.
- To formulate leading logistics service providers capable of competing in the domestic and
international markets, and to support the development of logistics service providers in a way
of modernity and profession.
- Manufacturing and trading enterprises shall well regulate their supply chain management and
save raw materials and production costs, shorten the commodity movement time.
- To apply new logistics technologies and to train professional human resources of high
logistics skills, contributing to promotion of trade facilitation and restructure of manufacturing
and trading enterprises.
- To complete the State administration mechanism, including policies to support development
of logistics services, legislation governing the logistics industry and the management apparatus
commensurate with the development level of logistics services of Vietnam in the process of
international economic integration

3. Groups of the main tasks

- Completing policies and legislations on logistics services.
- Improving logistics infrastructure.
- Enhancing capability of logistics providers and service quality.
- Developing markets of logistics services.
- Training, raising awareness and quality of human resources.
- Other tasks.

Six groups of the main tasks are specified by 60 specific tasks in the Appendix to the Decision
No.200 with indicated outcomes, time of implementation, schedule of completion and agencies/
organizations in charge.

4. The major tasks which VLA is called upon to undertake

- Integrate logistics services deeply into the agricultural sector, the industrial sector and activities
of import-export and domestic distribution of goods, and other services (No.33)
- Promote 3PL and 4PL (No. 34)
- Support development of strong logistics groups, advance toward overseas investment and
export logistics services (No. 36)
- Enhance trade promotion for logistics services (No. 38)
- Expand international cooperation on logistics (No. 43)
- Train enterprises’ managers and State cadres at managerial level on logistics basic knowledge
(No.47)

Whitebook 2018 125

 - Connect Vietnam’s educational institutions and logistics businesses with foreign educational
organizations (No. 48)
- Produce and broadcast science and education programs on logistics on mass media (No. 49)
- Formulate a set of logistics evaluation index (No. 58)
- Rate and assess competitiveness of the logistics service industry and logistics service providers
as well (No.59)

5. The implementation by VLA

On 12/4/2017, the Association launched implementation of the Plan Action among the
Members. After over a year of fruitful performance, the Association has obtained the positive
results in logistics service activities. Of which, prominently is the combination with the other
business Associations to expand to provide 3PL services; execute the social criticism about
the draft policies and regulations relating to the logistics services industry; extend business
cooperation with logistics Associations in the region; promote application of high technology in
the logistics service industry; and specially enhance the cooperation with Universities, vocational
colleges and logistics providers in training and educating high-quality logistics human resources
in order to meet the requirements of Vietnam’s logistics service industry, presently and in the
years to come.

II. DECREE 163/2007/ND-CP ON 30/12/2017 PROVIDING FOR

LOGISTICS SERVICES OPERATIONS
1. Introduction
On 30/12/2017, the Government issued Decree No.163/2017/ND-CP regulating the
operations of logistics services, effective from February 20, 2018, replacing Decree No.140/2007/
NĐ-CP dated September 5, 2007 detailing the Commercial Law, 2005 on conditions for trading in
logistics services and limitation of liabilities for traders providing for logistics services. The enactment
of this Decree has "comprehensive coverage of logistics services, internal legislation of international
commitments on logistics" as set out in the Action Plan for Enhancing Competitiveness and
Developing Logistics Services up to the year 2025, promulgated under Decision No. 200 / QD-
TTg dated February 14, 2017 (Decision 200) of the Prime Minister. This is a new step of the
Government in the reform of the logistics services regulations relating to the logistics services
industry on entering 2018, including specific regulations on investment in development of logistics
services in Vietnam.

Decree 140/2007 (NĐ140) was issued to implement the commitments of Vietnam in the WTO
on related logistics services after the National Assembly Resolution No.71/2006 /QH11 on
November 29, 2006 ratifying the Protocol to accede to the Agreement Establishing the World
Trade Organization (WTO) of the SRV. So far, after more than 10 years (2007-2017) over
the commitment periods 2007-2012 (5 years) and 2014-2017 (7 years and 10 years), many
provisions of those commitments have expired in terms of time and began the implementation
as committed. Therefore, many provisions in Decree No140 are no longer appropriate and
need to change. In addition, the deepening international integration of Vietnam, especially the
implementation of the new FTA agreements, requires appropriate regulations to create favorable
conditions for our country’s logistics services industry to develop, promoting domestic investment
and international cooperation. The Decree is still subject to the Commercial Law 2005, pending
the amendment and supplementation of this Law.

The Decree 163 applies to traders providing logistic services and organizations and individuals
involved. Article 3 of Decree 163 lists the types of "logistics services provided" including 16
categories of services and a very open item 17: "Supply of other services shall be agreed upon
by logistics service providers and their customers in accordance with the basic principles of the
Commercial Law”.

126 Whitebook 2018

2. The 17 logistics services include
- Container Handling Services, except services provided at airports.
- Container Warehouse Services supporting Maritime Transport Services.
- Storage and Warehouse Services under Services auxiliary to all Modes of Transport.
- Delivery Services.
- Freight Transport Agency Services.
- Customs Brokers’ Services (including Customs Clearance Services).
- Other services including the activities: Bill of Lading Auditing; Freight Brokerage Services.
Freight Inspection, Weighing and Sampling Services; Freight Receiving and Acceptance
Services; Transport Document Preparation Services.
- Whole Sale and Retail Supporting Services including activities of freight storage control,
consolidation, collection, sorting of freight and freight delivery.
- Freight Transport Services under Maritime Transpor.
- Freight Transport Services under Inland Waterways Transport.
- Freight Transport Services under Railways Transport.
- Freight Transport Services under Road Transport.
- Air Transport Services.
- Multimodal Transport Services.
- Technical Analysis and Inspection Services.
- Other Services Auxiliary to Transport.
- Other services to be agreed upon by logistics service traders and their customers in accordance
with the basic principles of the Commercial Law.

Pipe-line transport services are not mentioned, but Multi-modal transport services were covered
in 17 logistics services.

3. Conditions for foreign investors to provide logistics services under the Decree
Article 4, item 1, of the Decree 163 provided that traders operate specific logistics services as
mentioned above shall comply with conditions of investments and operations as provided for by
law and regulations applied for such services.

Article 4, item 2, also provided that "Traders carry out part or all of the logistics operations
by electronic means connected to the Internet, mobile telecommunication network or other
open network" shall also comply with regulations on e-commerce in addition to satisfying the
provisions of law and regulations for specific services as provided for in Article 3 of the present
Decree.

Specific conditions for foreign investors operating logistics services:

Conditions for foreign investors to provide logistics services (Article 4, item 3) stated that in
addition to "having to meet the conditions provided for in Item 1 and Item 2 of Article 4, foreign
investors belonging to countries and territories that are members of the World Trade Organization
are allowed to provide related logistics services under the conditions specified as follows:

- In case of freight transportation services operation under maritime transport services less
cabotage: Foreign investors are allowed to establish registered companies for the purpose of
operating a fleet under the national flag of Vietnam or to contribute capital, purchase a certain
ration of shares and stakes in an enterprise with foreign capital contribution not exceeding
49% of the total legal capital. The total foreign seafarers working on board ships under the

Whitebook 2018 127

 national flag of Vietnam (or registered in Vietnam) owned by joint ventures in Vietnam not
exceeding 1/3 of the total employees of the ships. The Master or the chief officer must be
Vietnamese citizen.
Foreign shipping companies are allowed to set up an enterprise or contribute capital, purchase
a certain ration of shares and stakes in an enterprise.
- In case of container handling services operations under maritime transport auxiliary services
(certain areas may be reserved for providing services or for licensing procedures in these areas).
Foreign investors are allowed to set up an enterprise or to contribute capital, purchase a certain
ration of shares and stakes in an enterprise with foreign capital contribution not exceeding
50% of the total legal capital. Foreign investors are also allowed to establish commercial
presence in Vietnam in the form of business cooperation contracts.
- In case of container handling services operations under services auxiliary to all Modes of
Transport, except for services provided at airports, foreign investors are allowed to set up an
enterprise or to contribute capital, purchase a certain shares and stakes in an enterprise with
foreign capital contribution not exceeding 50% of the total legal capital.
- In case of customs clearance services operations under services auxiliary to maritime transport,
foreign investors are allowed to set up an enterprise or to contribute capital, purchase a certain
shares and stakes in an enterprise with capital contribution by the domestic investors. Foreign
investors are allowed to establish commercial presence in Vietnam in the form of business
cooperation contracts.
- Other services operations including the following activities: Bill of Lading Auditing, Freight
Brokerage Services, Freight Inspection, Weighing and Sampling Services, Freight Receiving and
Acceptance Services; Transport Document Preparation Services, foreign investors are allowed
to set up an enterprise or to contribute capital, purchase a certain shares and stakes in an
enterprise with capital contribution by the domestic investors
- In case of operations of freight transport services under the inland waterways transport
services and freight transport services under the railways transport services, foreign investors
are allowed to set up an enterprise or to contribute capital, purchase a certain shares and stakes
in an enterprise with foreign capital contribution not exceeding 49% of the total legal capital.
- In case of freight transport services operations under the road transport services, it shall be
done through the form of a business co-operation contract or establishment of an enterprise or
to contribute capital, purchase a certain shares and stakes in an enterprise with foreign capital
contribution not exceeding 51% of the total legal capital. 100% drivers of the enterprise must
be Vietnamese citizens.
- In case of air transport services operations, the provisions of Civil Aviation Law and
Regulations shall apply.
- In case of technical analysis and inspection services operations:
• For services provided for the exercise of the Government's authority, it shall be carried out
in the form of enterprises having capital contributed by the domestic investors after three
years or in the form of an enterprise in which there is no restriction on capital contribution
by foreign investors after five years from the time when the private service supplier was
permitted to operate such services.
• It is prohibited to provide inspection and certification services for vehicles.
• The provision of technical analysis and inspection services is restricted to geographical
areas authorized by the competent authorities for security reasons.
• Decree 163 also stipulated the conditions that foreign investors subject to the application
of international treaties having different provisions on logistics operating conditions, they
are entitled to select to apply investment conditions provided for in one of such treaties.

128 Whitebook 2018

In accordance with Decree 163, foreign investors now may invest in the form of commercial
presence, representative office, business co-operation contract, joint venture, establishment
of an enterprise or capital contribution, purchase of shares and stakes in an enterprise, of
which the foreign capital contribution ratio is not more than 49%, 50% or 51%, or not limited
depending on the type of logistics services operations as stated.

The provisions of Decree 163 are very open, enabling international logistics service
providers to participate in the development of the logistics market in Vietnam at the
international level, and also their challenges as competition becomes sharper, but
our logistics service providers can take advantage of this opportunity to expand their
business scope and growth through a way of cooperation or joint ventures with foreign
investors. Competition for development is a common goal.
(Source: VLA compilation 2018)
Limitation of liability of logistics services providers
Article 5 of the Decree 163 provided for limitation of liability.
- Limitation of liability is the maximum amounts that traders providing logistics services are
liable to compensate their customers for any loss or damage arising or resulting from their
carrying out the logistics services in accordance with the provisions of the present Decree.
- In the event that relevant law and regulations provide for the limitation of liability of traders
providing logistics services, the provisions of such relevant law and regulations shall be
applicable.
- Where relevant law and regulations do not provide for limitation of liability, the parties shall
agree upon the limit of liability of traders providing logistics services. In cases where the parties
have no agreement, the following shall apply:
• Where the value of the goods have not been declared by the customers before the
goods have been taken in charge by the traders providing logistics services, the maximum
limitation of liability shall be Vietnamese Dong 500 million per each claim.
• Unless the value of the goods have been declared by the customers before the goods
have been taken in charge and confirmed by the traders providing logistics services, the
liability shall not exceed the value of the goods.
- Limitation of liability for cases where the traders providing logistic services perform many

Whitebook 2018 129

 stages of operations with different limitations of liability is the limitation of liability of the stage
with the highest limit of liability.

It is hoped that the Decree 163 will be a great contributor to enhancing development of Vietnam’s
logistics services industry in the process of international integration and economic growth of the
country.
(Source: VLA 2018)

III. DIRECTIVE NO 21/CT-TTG ON 18/7/2018

Directive No. 21/CT-TTg dated 18/7/2018 on Promoting Measures to Reduce Logistics
Costs, Effectively Connect the Transport Infrastructure System signed by Prime Minister Nguyen
Xuan Phuc

THE MAIN INTRODUCTION OF DIRECTIVE NO. 21

The Directive mentioned that on 14/02/2017, the Prime Minister issued Decision No. 200 /
QD-TTg on the Approval of the Action Plan on Enhancing Competitiveness and Developing
Vietnam Logistics Services up to 2025. After over one year of implementation of the Decision,
agencies and organizations have made efforts to implement the key task groups to achieve the
objectives set out, and initially achieved certain results.

However, the transportation infrastructure system is not uniform, lack of synchronism; linking
modes of transport is not effective. It has not brought into full play the resources of infrastructure,
people and the domestic and regional market. The logistics centers with the role of linking
Vietnam with the world have not invested to develop… thus leading to still high logistics costs
that affect the competitiveness of the Vietnamese economy.

The Directive stated clearly that to reduce logistics costs, effectively connect the transport
infrastructure in order to develop logistics services into a service sector that brings high added
value, thus contributing to the competitiveness of the economy, the Prime Minister requested
Ministries, Sectors and Localities in line with their functions and tasks assigned to set out the
specific programs in implementation of the Action Plans under the Decision No. 200 / QD-
TTg dated 14/02/2017 with 6 main task groups: 1. Completing policies and legislations
on logistics services. 2. Improving logistics infrastructure. 3. Enhancing capability of logistics
providers and service quality. 4. Developing markets of logistics services. 5. Training, raising
awareness and quality of human resources. 6. Propagandizing and increasing awareness of the
logistics service importance to the country’s growth.

1. Maximizing multi-modal transport and logistics services

The Prime Minister assigned the Ministry of Transport to perfect the system of legal documents,
mechanisms and policies, reform administrative procedures, cut down at least 50% of business
trading conditions, and simplify specialized inspection procedures; to raise the quality of the
work of formulation and organization of the implementation of the master planning; to increase
connectivity, develop transport modes, maximize multi-modal transport and logistics services; to
improve connectivity of modes of transport, reduce costs, and improve transport service quality.

Speeding up the restructuring of the domestic transport market, reduce the market share of road
transport, increase the share of transport by sea, rail and inland waterways, especially on the main
transportation corridors.

Giving priorities to the development of coastal transport, river-cum-sea transport in order to

transport goods, reducing the road load and at the same time making full use of available natural
conditions for rivers and seas to connect freight transport between maritime, Inland waterways
and other modes of transport.

130 Whitebook 2018

Improving the efficiency of management and use of investment capital in infrastructure
construction; To propose mechanisms for encouraging and attracting investments outside the
State budget, mobilizing resources for construction and development of transport infrastructure;
To organize the good exploitation of existing transport infrastructure; To balance and arrange
sources of investment capital, budgetary sources and ODA capital for the projects in order
to increase the capacity of connecting modes of transport, giving priority to investments in
construction and upgrading of the works of importance and urgency.

The Ministry of Transport shall promote the application of science and technology in the
management and exploitation of transport: To step up the application of information technology
in the management and operation of transport, linking modes of transport and management of
multi-mode transport, logistics services; Developing a transport trading floor and a logistics trading
floor.

a. On Roads
The Prime Minister requested continued effective use of capital resources, step by step socialization
to invest in the formation of a national express ways network and specialized roads to ensure
efficient connection of industrial parks, key economic centers, main border gates, important traffic
hubs with seaports, inland waterway ports, and railway stations.
To intensify the effective management of projects, concentrate investments on the construction
of the North-South expressway; To draw up plans and roadmaps to speed up the application
of road service charges in the form of automatic non-stop, thereby creating publicity and
transparency in toll collection; To intensify the application of information technology,
development and connection of passenger and cargo transport floors; Research and promote
the operation of the freight trading platform to limit empty trucks, while studying the formation
of a common platform for transport modes to serve as the basis for development of logistics
services.

b. On Railway
To carry out the project to upgrade and modernize the North-South railway; To improve the
capacity and quality of railway transport and to improve and upgrade the railway routes of Ha
Noi - Hai Phong, Ha Noi - Thai Nguyen, Ha Noi - Lang Son, Ha Noi - Ha Long; To study
the plan and roadmap for building a railway linking with the international gateway port of Hai
Phong; To study, develop, form railway links with industrial parks, seaports and ICDs.
At the same time, to build terminal stations and upgrade modern loading and unloading
equipment for freight terminals such as Yen Vien, Dong Anh, Song Than… according to the
capital availability, at the same time inviting Investors to cooperate in investment to upgrade
warehouses and storage in order to meet the standards to provide common services for all
freight transporters and customers.
Collaboration to reach an agreement with the Chinese Railways on the rail link connection
point, and to study the 1.435mm gauge rail construction project connecting the Chinese
railway, the North Hekou Station with the Lao Cai Station to make through the International
Kun Minh - Hai Phong Rail Link.
c. On Inland waterways
To step by step invest in the inland waterway infrastructure system, and towards finally settling
the bottlenecks on the main waterway corridors (Quang Ninh - Hai Phong - Ha Noi and Hai
Phong - Ninh Binh, Ho Chi Minh City - Ca Mau, waterways connecting with Cambodia),
such as upgrading the shipping clearance of the Duong Bridge, the Mang Thit Bridge, and the
Nang Hai Bridge; improve the quality and synchronous connection of inland waterways in the
Mekong Delta; It also connects to seaports and outside regions.
To prioritize the development of river-cum-sea transport so as to make full use of the river

Whitebook 2018 131

 mouths to the sea in order to reduce the load on roads on the North-South axis, thus contributing
to reducing costs and raising the transport capacity; To study and formulate mechanisms to
encourage private investments in the construction, operation, exploitation and maintenance
of inland waterway infrastructure, investments in the new building and transformation of
specialized inland waterway means of transport (such as container transportation, petrol and
oil transport and other specialized commodities and river-cum sea means of transport).

d. On Maritime
To develop sea transport services in synchrony with the seaport system, to concentrate on
efficiently exploiting coastal shipping lines in order to reduce the road load, thus contributing to
reducing costs and raising the transport capacity. To maximize the advantages of the position
of seaports, especially the international gateway ports in order to attract large-tonnage vessels
to transport export and import goods to far shipping destinations; Strengthen cooperation
with the management agencies of seaports and foreign shipping lines to attract goods through
Vietnamese seaports.
To study and formulate the development of seaport connections and the hinterland support
services system with roads, railways and inland waterways, such as studying the investment
in Lien Chieu wharf area, Da Nang in accordance with transport demand and ability to source
capital; To apply measures to attract and distribute goods for efficient exploitation of the Cai
Mep - Thi Vai seaport; To study and implement the project of Cai Mep - Thi Vai channel for
ships of up to 160,000 DWT navigating on the basis of 24 / 24h into Cai Mep - Thi Vai
berth (especially the channel from the buoy "0" to the CMIT terminal; Speeding up completion
of the investment project to build Hai Phong International Terminal (Lach Huyen) - the kick-
off phase.

e. On Aviation
To soon complete and submit to the Government and the National Assembly for approval
the Feasibility Study Report of Long Thanh International Airport Project; To prepare the
expansion of Noi Bai International Airport; To build and develop aviation logistics centers
attached to Noi Bai, Tan Son Nhat and Da Nang international airports; To invest in expanding
Tan Son Nhat International Airport, in collaboration with Ho Chi Minh City, to study
infrastructure construction and traffic management in order to minimize traffic congestion
around the airport area.

2. Promoting attraction of investments in logistics infrastructure

The Prime Minister assigned the Ministry of Industry and Trade to continue coordinating with the
relevant Ministries and Agencies (especially the Ministry of Planning and Investment, the Ministry
of Finance) to perfect the policy to promote investment attraction in infrastructure logistics.

To focus on improving the logistics infrastructure associated with e-commerce, combining logistics
and e-commerce with current trends in the world and in the region. Through the activities to
improve the capacity of enterprises, encourage and guide enterprises in some industries to apply
advanced supply chain management model in the production and business process, focusing on
deploying Logistics activities based on information technology and new technologies in logistics.

The Ministry of Planning and Investment shall focus on calling for investment in the construction
of logistics centers of type I, which will play the role in linking Vietnam with the world; Encouraging
some industrial parks and export processing zones to build models of industrial parks on the
basis of logistics; improve the policy of supporting logistics service enterprises; set up statistical
indicator system and collection of statistical data on logistics; To issue business registration code
by industry groups for logistics services ...

The Ministry of Finance shall study and formulate policies on service taxes, charges and service

132 Whitebook 2018

prices in order to create favorable conditions for enterprises to provide multi-modal transport
services.

The Prime Minister requested the People's Committees of Provinces and Cities under the central
government to allocate appropriate land for the construction of goods distribution centres, post-
port services, ICD conveniently connecting with the national transportation network in order to
gradually create a network of modern logistics infrastructure.

Based on the development orientations and actual conditions in the localities, the People’s
Committees take initiative in coordinating with Ministries and Sectors to call for investments in
building and completing the logistics system in the locality.

The Vietnam Logistics Business Association, the Vietnam Shippers Association and the related
business associations shall, according to the provisions of law and regulations, the directives
of the competent authorities and their functions and tasks, set out orientations to change the
behavior in international trade, linking the cargo owners and the logistics service providers to
change the trading conditions on “purchasing the goods on CIF terms and sale of the goods on
FOB terms", to raise awareness of cargo owners to create basis for the logistics service providers
of Vietnam participating in many stages in the supply chain management for increasing value
added contents.

Domestic logistics providers need to enhance the application of modern science and technology
in line with the tendency of forming the logistics services industry in the technological revolution
4.0 to enhance competitiveness, improve service quality and reduce prices, and services charges/
fees.
(Source: the Vietnam Government Portal, 19/7/2018)

IV. RESOLUTION NO. 19-2018/NQ-CP DATED 15/05/2018

On 15/05/2018 the Government issued resolution no.19-2018/NQ-CP (resolution 19-2018)
on continued implementation of duties and solutions for improvintg the business environment
and enhancing the national competitiveness in 2018 and the next years

THE MAJOR TASKS

Resolution No.19-2018 set out the key goals and targets for improving the business environment
and enhancing the national competitiveness, major tasks and solutions, and also organization
to implement these goals, targets and tasks with the specific assignments to the concerned
Ministries and sectors. The following are major tasks from the above contents directly related to
the logistics service industry.

1. To improve the business environment and enhance the national competitiveness. By 2020,
the quality of Vietnam's business environment is on a par with ASEAN 4.
2. To improve the business environment index so that by 2018 it will increase by 8 to 18
ranks on the World Bank rankings.
3. To complete the abolition and simplification of 50% of investment and business conditions;
to propose the abolition of a number of conditional business lines.
4. To reduce at least 50% of the list of goods and products subject to specialized inspection;
to converse from mainly pre-check to post-check; substantially eliminating the status of a
commodity subject to management and specialized inspection of more than one agency; to
reduce the proportion of imported goods subject to specialized inspection at the customs
clearance period from 25 - 27% now down to less than 10%.
5. To reduce gradually logistics costs down to about 18% of GDP; to improve further LPI by
10 ranks (now at No. 64/160).

Whitebook 2018 133

 6. To implement solutions to reduce logistics costs su ch as reducing congestion of seaports
and airports, especially Cat Lai seaport and Tan Son Nhat Airport…in order to reduce costs of
fuels, reducing traffic congestions to the Cai Mep - Thi Vai port for lightening heavy cargo load
at the ports in Ho Chi Minh City.
7. Reforming provisions on specialized inspections: Ministries and sectors shall cut down at
least 50% of the items subject to specialized inspection under their State management in
2018.
8. Continuing to implement measures to improve the tax payment index; to strive to
reduce the tax payment time (excluding social insurance payment time) to 119 hours.
9. Strengthening the National Single Window and the ASEAN Single Window. In 2018,
full 130 new administrative procedures will be implemented as registered in the Master
Plan.
10. Proposing to reduce information disclosure fees at least 50%.
11. Implementing practical solutions, reducing logistics costs: to review and reduce tolls
of bridges and roads, especially BOT fees ...; to restore orders and correct immediately the
situation that shipping lines arbitrarily introduce surcharges for imports and exports. To archive
better railway links with the system of roads, sea, air and inland waterways.
12. To develop logistics trading platform in order to optimize the two-way cargo and container
transport; to research and develop aviation logistics centers; to implement 3 special air logistics
hubs in Noi Bai, Da Nang and Tan Son Nhat.
13. The Resolution assigned specific tasks for each Ministry or Sector to reduce administrative
procedures, thus facilitating trade. The Ministry of Transport is the focal point for cutting down
logistics costs and improving the logistics competitiveness index.
V. DECISION NO.27/2018/QD-TTG ON 06/7/2018 OF THE PRIME MINISTER
PROMULGATING THE SYSTEM OF VIETNAM'S ECONOMIC SECTORS, INCLUDING
LOGISTICS
On 06/07/2018, at the proposal of the Minister of Planning and Investment, the Prime Minister
signed the Decision No. 27/2018/QD-TTg promulgating the System of Economic Sectors
of Vietnam. This Decision took effect on August 20, 2018, replacing the Prime Minister's
Decision No.10/2007/ QD-TTg dated 23/01/2007 on promulgating the System of Economic
Sectors of the Prime Minister Vietnam. The Code HĐ27/2018 Chapter H - Transportation and
Warehousing had the code for logistics. Code 52292: Logistics. This group includes: Planning,
organizing and supporting transportation, warehousing and goods distribution activities. Code
52291: Agency services, freight forwarding 52299: Other supporting services relating to
transportation, not elsewhere classified, including: Broking of ships, aircraft, means of road
transport; Activities of air ticket agents; Operations of customs clearance agents.

This is the first time Vietnam has the code of logistics. (See more details in Decision 27/2018).

134 Whitebook 2018

Photo: Do Thai Son Whitebook 2018 135
 CHAPTER IV:
GENERAL INTRODUCTION OF NATIONAL SINGLE
WINDOW (NSW), ASEAN SINGLE WINDOW (ASW)
AND THE AUTOMATED CLEARANCE SYSTEM

In line with the Automated Clearance System VNACCS/VCIS, the implementation

of the National Single Window and the ASEAN Single Window has played an
important role in facilitating trade in general and logistics services in particular.

I. THE NATIONAL SINGLE WINDOW, THE ASEAN SINGLE WINDOW

Người, vậnThetải, implementation
đại lý hãng tàu, of the National Single Window and the ASEAN Single Window originated
through
đại lý giao nhận the signing of the Agreement on the Establishment and Implementation of the ASEAN
Ngân hàng, bảo hiểm
Single Window on December 9, 2005 in Malaysia and the signing of the Protocol on Establishment
and Implementation of the ASEAN Single Window on December 20, 2006 in Cambodia.
Các bộ, ngành DN XNK,
đại lý giao nhận
1. Concept of the National Single Window (NSW)
National
The NSW Single
is to allow customs declarants to send electronic information and documents for
Hải quan customs clearance
Windowand the procedures of state
Các bên liên quan khác management agencies involved in imports and

exports through an integrated information system. The State management agencies shall decide
to allow the goods to be imported or exported or in transit. The customs office decides to make
the goods clearance and clear the goods on the integrated information system in accordance with
theCỬA
HỆ THÓNG MỘT Customs
ASEAN/ Law 2014.
THẾ GIỚI

2. Concept of the ASEAN Single Window (ASW)

The ASEAN Single Window is an environment in which the NSW works and integrates.

3. The model of linking the NSW and the ASW

The NSW Information Portal is the place to receive and respond to information from relevant line
Ministries, Agencies and related parties as follows:
- Ministries and Agencies involved in the licensing process for import & export goods and
goods in transit, vehicles of exit, entry and
in transit.
Carrlers, chippong agents
Forwarders
Banking, Insurance - Customs Offices.
- Carriers, shipping agents, forwarding
Importer, exporter and
agents.
Minlstrles
forwarder
National - Banks, insurance companies.
Single - Import-export enterprises, customs
Customs Other stakcholders
Window brokers.
- Other stakeholders.
Based on this basis, the NSW Information
INTERNATIONAL AND ASEAN SINGLE WINDOW Portal connects with the ASW and other
Vietnamese stakeholders.

136 Whitebook 2018

4. The Process of implementing administrative procedures through the National Single
Window and the ASEAN Single WindowCổng thông tin
When carrying out procedures for licensing and clearance of import and export goods
Các Bộ, with permits on
ngành
Doanh nghiệp MỘT CỬA
the National Portal of Vietnam, the enterprises shall carry out the following procedures:
cấp phép
QUỐC GIA
- Step 1: Enterprises submit applications for licenses, dossiers for licensing, customs declarations
and customs dossiers electronically to the National Single Window Portal.
- Step 2: National Single Window shall transfer the application for permit and dossier to the
licensing system of the relevant ministries and agencies concerned.
- Step 3: The licensing issuance system of the Ministries and agencies shall process the permit
application form for licenses and return Hải
the quan:
permits in electronic form to the National Single
Window Portal. Ra quyết định thông quan,
giải phóng hàng hóa
- Step 4: The National Single Window shall transfer the electronic license/permit to the
enterprise and send the same to the customs system.
- Step 5: The customs office processes the customs dossiers, reconciles electronic information
received from the line ministries, agencies (if necessary), decides the customs clearance results
and returns the results to the National Single Window Portal.
- Step 6: The National Single Window Portal shall return the results of customs clearance to
enterprises and send the results to the systems of the ministries and agencies for reference.

National Single
Ministry
Businesses WINDOW
/agencles
PORATAL

Customs: Issuing declslon

of clearance and
release of goods

PROCEDURES CARRIED OUT THROUGH THE NATIONAL SINGLE WINDOW

5. The organizational structure and implementation of the National Single Window and
the ASEAN Single Window
The national high-level steering agency governing the National Single Window and the ASEAN
Single Window is the National Steering Committee for the ASEAN Single Window, the ASEAN
Single Window and Trade Facilitation (hereinafter referred to as the National Steering Committee
1899), which was established under Decision No. 1899/QD-TTg dated 04/10/2016 of the
Prime Minister. The National Steering Committee 1899 has not updated if MOT or MOIT would
join standing body together GDVC.

a. Mandates
The National Steering Committee 1899 is responsible for assisting the Prime Minister in directing,
coordinating, guiding, inspecting and organizing the implementation of the ASEAN Single
Window, the National Single Window as stipulated in the Agreement and the Protocol on the

Whitebook 2018 137

 • VLA

Establishment and Implementation of the ASEAN Single Window; implementing synchronous

solutions to facilitate trade and cross-border goods exchange.

b. Organizational structure
- Chairman of the National Steering Committee 1899: Deputy Prime Minister Vuong Dinh
Hue.
- Deputy Chairman: Minister of Finance.
- Members: Leaders of Ministries and Agencies.
- Standing body: General Department of Vietnam Customs.

6. Benefits of implementing the National Single Window and ASEAN Single Window
a. Benefit for people and businesses
- Saving time to complete the procedures for licensing and customs clearance of export
consignment. When implementing administrative procedures on the National Single Window
Portal, with the dossiers and documents are electronized, the enterprises only need to sit at
their offices and send the electronic dossiers to the National Single Window Portal and then it
is possible to complete the licensing and clearance procedures of the consignment.
- Saving costs, using resources in a reasonable and effective way: Simple, harmonized
procedures between the management agencies. Therefore, it helps businesses reduce the time,
costs of preparation of dossiers, travel time to carry out procedures for licensing and customs
clearance of goods.
- Enhancing transparency in the process of administrative procedures: The implementation
of administrative procedures through the National Single Window Portal helps increase
the transparency in the process of procedures for enterprises. The National Single Window
system will keep the records and time sending by the businesses, the information related to
the implementation of administrative procedures is publicly disclosed at the National Single
Window Portal.
- Reducing the contact between people and enterprises with State management agencies in the
process of implementing administrative procedures: Implementing administrative procedures
through the National Single Window Portal will reduce the contact between businesses and
State management agencies. Accordingly, the problems of negative, harassment of a contingent

138 Whitebook 2018

 of cadres and civil servants will decrease.
- Improving management capacity and efficiency of enterprises: When implementing
administrative procedures on the National Single Window Portal, all information sent in by
enterprises, and people as well as information and results of processing dossiers by cadres
and civil servants are saved on the system. Therefore, the implementation of administrative
procedures on the National Single Window Portal ensures transparency in serving people and
enterprises.

b. The benefits for State management agencies

- Promoting administrative reform, improve State management regimes and policies
for export and import activities: The implementation of the National Single Window has
strongly promoted administrative reform, contributing to the completion of objectives of the
Government's Resolution 19/NQ-CP on major tasks and solutions to further improve the
business environment, enhance national competitiveness and Resolution No.36a/NQ-CP
dated 14/10/2015 of the Government on e-Government, helping to transform into a new
mode of implementation of administrative procedures in non-paper environment - a method
recommended by the international community and proven to be transparent, effective and
conducive to both the public and private sectors.
- Promoting the application of information technology in State management agencies toward
e-government: Implementing the National Single Window is a lever for Ministries and branches
to step up the application of information technology in their management activities towards
building e-Government in accordance with Resolution 36a/ NQ-CP on e-Government.
- Improving State management capacity and quality in public service provision: The
implementation of the National Single Widow also contributes to raising professional level
and skills, and changing manual and separate working methods and practices to modern and
cooperative electronic methods. As a result, the capacity and qualifications of cadres and civil
servants rise in both thinking and working methods, contributing to the improvement of the
State management capacity.
- Minimizing redundancy of records, information and data, and enhancing reliability and
accuracy of information: The implementation of the National Single Widow helps minimize
redundancy of records, information and data, and increase the reliability and accuracy of
information. Therefore, it helps the State management agencies control enterprises better and
minimize the excess requirements for records.
- Preventing threats to the national security as well as security of the community from illegal
transport and trade activities: The implementation of the National Single Window linking
with the ASEAN Single Window will help exchange information between State management
agencies quickly and accurately. Accordingly, the State management agencies will have more
information and timeliness faster to ensure the State management of goods and vehicles
across the border. This allows border management agencies to better manage goods and
vehicles, prevent smuggling and trade frauds more effectively, and ensure national security as
well as prevent illegal transportation and trade activities.

7. Results of the implementation of the National Single Window and ASEAN Single
Window by Vietnam
a. Results of implementing the National Single Window (NSW)
As of July, 2018, the procedures include C/O form D of the Ministry of Industry and Trade and 3
procedures for management of ships on exit, entry and transit at international seaports by Ministry
of Transport, there are 11 ministries and agencies connected with NSW with 53 procedures, and
still 283 procedures needing to go through this mechanism, to connect the ministries, agencies
and businesses. It is expected that by the end of 2018, 143 additional procedures will be
implemented through NSW, bringing the total to 196 procedures, accounting for 78% of the 251
administrative procedures latest proposed by the ministries and agencies. From 15/11/2017,

Whitebook 2018 139

 NSW has been deployed at international airports throughout the country (3 procedures for entry,
exit and transit aircraft) with connections from over 40 international airlines to and from Vietnam.
By July 15, 2018 more than 1.34 million dossiers of 22,812 enterprises were processed through
NSW.

b. Results of implementing the ASEAN Single Window

From 9/2015, Vietnam has officially exchanged information on electronic C/O form D with 4
ASEAN member countries (Singapore, Malaysia, Indonesia and Thailand) and used this document
as a basis for applying the preferential rate tariffs under the ASEAN Trade in Goods Agreement.
As of June 2018, the total C/O, Form D that Vietnam received from these four countries was
28,509 sets. Total C/O of Viet Nam sent to four countries was 14,392 C/O. Currently, Vietnam
is collaborating with Brunei, Cambodia and the Philippines to establish and connect the system
for pilot C/O form D. At the same time, Vietnam is working with countries such as Thailand,
Indonesia and Malaysia to set up a system to serve the pilot exchange of ASEAN customs
declarations and exchange of electronic quarantine certificates EPC.

Vietnam is also negotiating to complete Portocols on Exchange of Information linking with

EAEU; agreeing to all technical requirements and preparing for establishment of a system to
exchange information on customs declaration and certificates of orgine.

8. The plan for the time to come

a. Overall objectives
By 2020, all administrative procedures related to the State management of export, import and
transit of goods and exit, entry and transit of vehicles shall be implemented through the NSW
Portal under the form 4th level online public service.

Full implement the ASW in line with the commitments made by Vietnam and the ASEAN road
map; technical readiness for connection and exchange of data with non-ASEAN trade partners
under the agreement that Vietnam is a contracting party.

b. Specific objectives
- Until 2018:
- To complete the nationwide extension of the procedures for means of transport and goods
in and out of seaports, inland water ports and offshore oil and gas terminals; Procedures for
means of transport entering or leaving airports through the NSW.
- To deploy administrative procedures with a high volume of transactions, affecting strongly
enterprises, organizations and citizens; accounting at least 80% of the total administrative
procedures of ministries and agencies relating to the activities of export and import and transit
of goods; exit, entry and transit of persons and means of transport.
- By 2020:
- Full implementation of all administrative procedures of the ministries, agenices involved
in management of export, import and transit of goods; exit, entry and transit of persons and
means of transport through the NSW.
-The time for customs clearance and release of goods, persons and means of transport related
to the NSW is equal to that of the four ASEAN leading countries.
- Ensure electronic collection of fees and charges for 100% of administrative procedures
implemented through the National Single Window.

Vietnam is completing the National Single Window and the Asean Single Window.
The Government shall promulgate “Regulations on implementing administrative
procedures through the National Single Window System, the ASEAN Single Window

140 Whitebook 2018

and Specialized Inspections for Imports and Exports” in order to facilitate further trade
and logistics service activities.
(Source: NSW & ASW Handbook of the Committee 1899 and its Report at the 24/7/2018
Conference)

Please refer to the new decision: Decision No. 1254 / QĐ-TTg dated 26/9/2018 of
the Prime Minister approving the Action Plan to promote the National Single Window,
ASEAN Single Window, reform of specialized inspection for exports, imports and trade
facilitation in the period of 2018-2020.

II. OVERVIEW OF VNACCS/VCIS SYSTEM

The VNACCS/ VCIS system is the Automated Clearing System and the National Single Window
having two small systems: (i) Viet Nam Automated Cargo Clearance System (VNACCS).
(ii) Viet Nam Customs Information System (VCIS).The VNACCS / VCIS system consists of
the following key soft wares: e-Declaration), e- E-Manifest, e-Invoice, e-Payment, e-C/O,
Selectivity, Risk control/risk assessment, Export-import enterprises management, Clearance
and release, Customs supervision and control, The VNACCS system is used for customs
clearance of import and export goods.

Compared with the current system, the VNACCS system has a new focus on all three stages:
before, during and after customs clearance. The current system only focuses on two stages:
during and after clearance. The entire pre-clearance phase can only be piloted within the
framework of the E-manifest Project, whereby shipping companies must forward all cargo
aboard-ship manifest information to the Customs. The VNACCS system extends new functions
and procedures, which are the procedures for registration of tax exemption lists, procedures
for both general and non-commercial transactions and simple procedures for low value goods,
and control of goods temporarily imported for re-export.

Another function of the VNACCS System is to strengthen linkage with Ministries and sectors by
applying the Single Window mechanism. As designed, the VNACCS system has connections
with Ministries and sectors. The customs office will send information related to the application
for licensing of the line agencies. Licensing results will be processed through the System.
Receiving and processing automatic flow of information declaration of the enterprises. Limitation
of the use of paper records through the application of electronic signature.

At present, the time for receiving and clearing the green channel is only 1-3 seconds and for
the yellow line, the processing time and inspection of the documents does not exceed 02
working hours. By June 2018, the percentage of goods through the green channel is about
65%, the yellow channel is about 30% and the red channel is about 5%. The VNACCS system
connects with many information technology systems of related parties such as enterprises dealing
in warehouses, ports, services, freight forwarding, transportation, banking and related Ministries
and sectors.

By the end of June, 2018, thanks to the application of information technology, all customs
procedures have been automated at a very high level with more than 99.60% of enterprises
participating in the implementation of e-customs at 100% of customs units nationwide. This
means that nearly 100% of export-import turnover is processed through VNACCS/VCIS. The
application of information technology has shortened the customs clearance time for enterprises,
minimized paper work and simplified the customs documentation. Currently, businesses can pay
tax at any time, from anywhere with any means of internet connection, regardless of the time and
place of work of the tax collecting agencies such as banks, State Treasury and Customs.

The VNACCS and VCIS, though still having to address some of the difficulties to be

Whitebook 2018 141

 fully automated, have contributed greatly to facilitating the supply of logistics services
in order to provide value added services to import and export goods.
(Source: Ministry of Finance Report 4/2018 & General Department of Customs Report)

III. AUTOMATED CUSTOMS SYSTEMS FOR WAREHOUSES AND OPEN STORAGE

ACTIVITIES
In September 2018, the Customs Department of Ho Chi Minh City deployed VASSCM
(Vietnam Automated System for Seaport Customs Management) at all ports, warehouses and
open storage in the City. This new management approach allows customs declarants not to
produce paper documents when shipping goods through the customs control area as before,
helping businesses reduce costs by about 1/3 to 1/2 time for each shipment. In addition,
the application of VASSCM system also helps enterprises operating ports, warehouses and
open storage to implement the regime of management, statistics and records in a scientific
and transparent manner. At the same time, enterprises are also provided with adequate and
timely information on the system of licensing status from customs offices for each lot of goods
and each container to carry out procedures for goods delivery and receipt according to the
provisions of regulations. This helps reduce the risk of paper evidence, ensure transparency
and publicity through the steps in the business process which are recorded and updated on
the system.

From August 2017 to

the end of June 2018,
the Customs General
Department focused
on the implementation
of automatic customs
management system
at 4 Units: Customs
Department of Hai Phong
(at all 4 Customs Sub-
Departments at border
gates with the participation
of 53 enterprises engaged
in operating warehouses,
open storage and
seaports), Customs
Department of Ha Noi (at
Customs Sub-Department
(Sources: General Department of Vietnam of Noi Bai International
Customs / Logistics.gov.vn) Airport with participation
of 3 businesses operating
warehouses, open storage
and airports), Customs Department of Ho Chi Minh City (at 4 Customs Sub-Department
with 4 business enterprises operating warehouses, open storage and seaports); Ba Ria -
Vung Tau Customs Department (at 4 Customs Sub-departments with the participation
of14 enterprises operating warehouse, open storage and seaports). By connecting and
exchanging information with ports, airports, warehouses and open storage operators, the
VASSCM system not only helps customs authorities to monitor closely and timely the
movement, changes and status of the goods being subject to customs control but also bring
practical benefits to the business community and the relevant organizations.

142 Whitebook 2018

Whitebook 2018 143
144 Whitebook 2018 Photo: Nguyen Tuan Anh
 CHAPTER V:
LOGISTICS AND TRANSPORT
INFRASTRUCTURE DEVELOPMENT

According to the Ministry of Transport, "Recently, our country’s transport infrastructure

has noticeably changed; many major modern projects have been put into operation…
Generally speaking, the transport infrastructure has initially met the growth of the
Transport Sector. However, the prominent problem is the integration, particularly
between the seaports and the system of roads, railways and hinterland support
services as well as the non-integrated development of 5 modes of transport which
have rendered constraints on transport activities, especially multimodal transport and
logistics services”.

On the dimension of Quality of trade and transport related infrastructure (e.g., ports,
railroads, roads, information technology) by the WB LPI 2018, it is 3.01 against 2.70 in
2016, thus contributing to the increase of Vietnam LPI in 2018.

I. ROAD
As of April 2018, the Vietnam Road System has the total length of 570,448 km including
24,136 km of national highways, 816 km of expressways (4 times increased against 2013),
provincial roads of 25,741 km, district roads of 58,347 km, urban roads of 26,953 km, village
roads of 144,670 km, community roads of 181,188 km and 108,597 km of internal field roads.

At present, the following expressways are being built: the 55 km long Ben Luc - Long Thanh,
the Hoa Lac - Hoa Binh of 26 km, and the Trung Luong - My Thuan of 64 km long, and part of
the newly completed Ha Noi - Lang Son Expressway. On 22/11/2017, the National Assembly
issued Resolution No. 52/2017/QH14 on the policy of investing in the project of building
some stages of expressways on the north-south route in the East for the period of 2017-2020
including from Cao Bo (Nam Dinh) to Bai Vot (Ha Tinh), from Cam Lo (Quang Tri) to La Son
(Thua Thien Hue), from Nha Trang (Khanh Hoa) to Dau Giay (Dong Nai) and My Thuan Bridge
2 (Tien Giang and Vinh Long). In the period of 2017-2020, the projected investment is 654 km,
divided into 11 independent operation projects with a initial total investment capital of 118,716
billion VND. The two priority roads to upgrade Highway No. 1 from Thanh Hoa to Can Tho and
the Ho Chi Minh Highway through the Central Highlands have been put into use earlier than
expected.

On 01/09/2018, the Ha Long - Hai Phong expressway of a length of more than 25km with 4
lanes and Bach Dang bridge officially opened, connecting Quang Ninh with Hai Phong - the key
economic region in the North. The Ha Long - Bach Dang expressway connecting the Ha Noi -
Hai Phong expressway will reduce Ha Noi - Ha Long travel time from 3.5 hours to 1.5 hours and
from Ha Long to Hai Phong shorten only 30 minutes instead of 1 hour 30 minutes as before.
This will facilitate the transportation of goods and logistics operations in the region.

On 02/09/2018, the Da Nang - Quang Ngai expressway put into operation, opening new
opportunities for socio-economic development in Da Nang, Quang Nam and Quang Ngai

Whitebook 2018 145

 provinces. The Da Nang - Quang Ngai expressway project
is the first high speed project in the central region through
the provinces: Da Nang city (7.9km), Quang Nam (91.2km)
and Quang Ngai (40.1km). The total length of the project is
139,204 km; of which the highway is 131.5 km in length,
connecting the highway with National Highway 1A with a
length of 7.7 km.

Thus, with two new projects being in operation, the total

length of Vietnam's expressway is 980 km.

1. The businesses and the automobile transport

cooperatives:
In 2013, the whole country had a total of 5,761 units
of transportation businesses licensed under the Decree
91/2009/ND-CP; In 2016, the country had 24,580 units of
transportation businesses licensed under the 86/2014/ND-
CP, increasing by nearly 19,000 units compared to 2013.
By the end of September, 2017, there were over 56,431
units of transport business which were granted licenses for
automobile transport business, mainly transporters who were
granted business licenses by road Decree No. 86/2014/
ND-CP). The proportion of small and medium sized units
accounts for about 80%, having the vehicle volume of each
unit under 5 vehicles and the weak competitiveness.

2. Means of transport have increased both in quantity

and quality:
THE MAP OF VIETNAM’S ROAD NETWORK In 2013, the country had 121,897 means of transport
involved in business (including passenger buses and container
trucks). In 2016, the country had 219,038 means of transport involved in business, an increase
of 97,141 vehicles compared to 2013. By the end of September 2017, there were 420,902
vehicles in the market, up by 201,864 units compared to 2016 (mainly new goods-vehicles
which were granted with badges under the roadmap of Decree No. 86/2014/ ND-CP and
contract cars involved in Uber and Grab), out of these, 218,137 passenger vehicles (operating
on fixed-lines 19,482 vehicles, on contract 111,908 vehicles, on tourism 1,377 vehicles, on taxi
business 76,336 and 9,034 buses), and 202,765 trucks of various type (among them: 47,878
container movers, 8,291 trailers, and 146,596 trucks).

On March 15, 2015, Vietnam and other GMS countries signed an Agreement on "Early Harvest"
of the GMS-CBTA Agreement, accordingly from June 1, 2018, each country has the right to
license 500 vehicles carrying out cross-border transport (CBT). The Directorate of Roads of
Vietnam (DRV) is responsible for guiding and licensing vehicles of Vietnamese enterprises.
Businesses are invited to contact directly DRV for licensing the number of vehicles mentioned
above.

Taking advantage of the opportunities provided by the GMS-CBTA Agreement, recently foreign
transport companies have launched the Chongqing route to the south, linking with ASEAN
member countries in the region by road, parallel to the rail services to the East connecting with
Vietnam, from Chongqing through Pingxiang (Guangxi) to Ha Noi. Thanks to this route, the
transportation time is reduced to 45 hours on the whole route, goods arriving in and departing
from Ha Noi or Chongqing will be transported quickly to Ho Chi Minh City (108 hours) and then
further to ASEAN member countries (such as Cambodia within 148 hours) or provinces and

146 Whitebook 2018

cities of China. This is an opportunity for logistics companies in Vietnam to cooperate, expand
and develop their business.
(Sources: Report by MOT at the National Conference on Logistics
16/4/2018 and VLA in 8/2018)

II. MARITIME
I. Vietnam Seaports System
Vietnam's seaport system includes 6 seaport groups: Group 1: Northern seaports (from Quang
Ninh to Ninh Binh); Group 2: North Central seaports (from Thanh Hoa to Ha Tinh); Group 3:
Mid-Central seaports (from Quang Binh to Quang Ngai); Group 4: South Central seaports (from
Binh Dinh to Binh Thuan); Group 5: South East seaports (Ho Chi Minh City, Dong Nai, Binh
Duong, Ba Ria - Vung Tau) and Group 6: Cuu Long Delta seaports.

At present, there are 45 seaports in operation, of which 02 seaports of category IA (international

gateway ports); 12 seaports of type I (general ports at regional focal points); 18 seaports of type
II (local general ports) and 13 seaports of type III (offshore oil and gas terminals).

Seaport of category IA (including 2 ports): Hai Phong (Lach Huyen) port and Vung Tau (Cai Mep
- Thi Vai) port for 4,000 - 8,000 TEU container ships (equivalent to 50,000 - 100,000 DWT
ship). Ships of up to 160,000 - 180,000 DWT can be acceptalbe; Seaport of type I (12 ports):
Quang Ninh Port, Nghi Son Port, Nghe An Port, Ha Tinh Port, Thua Thien Hue Port, Da Nang
Port, Dung Quat Port, Quang Ngai Port. Quy Nhon (Binh Dinh), Khanh Hoa Port (Development
Oriented is an International Transshipment Terminal - Type IA), Ho Chi Minh City Port, Dong

STATUS OF THE SEAPORTS SYSTEM OF VIETNAM

Whitebook 2018 147

 Nai Port, and Can Tho Port. The ports capable of receiving ships of a tonnage of between 10,000
and 50,000 DWT, acting as a regional focal point ports, for handling import and export goods
on medium and near sea routes and they are satellite ports for ports of types IA.

Seaports of Type II (including 18 ports): The ports Thai Binh, Hai Thinh (Nam Dinh), Quang
Binh, Quang Nam, Quang Nam, Quang Nam, Quang Nam, Vung Ro (Phu Yen), Ninh Thuan,
Binh Thuan, Binh Duong , Tien Giang, Ben Tre, Dong Thap, An Giang, Hau Giang, Vinh Long,
Tra Vinh, Nam Can (Ca Mau) and Kien Giang. The ports capable of accommodating ships of
10,000 DWT, serving as feeder ports mainly locally and in the vicinity, and they are satellite ports
of international gateway ports.

As of June, 2018, the total berths

of the seaport system is 263
with about 89 km of length and
18 anchorage/transshipment
areas with the total designed
capacity of about 543.7 million
tons/year. Compared to the
first years of implementing the
Masterplan (2000), Vietnam's
seaport system has increased by
4.4 times in terms of the berth
length (in 2000 it was about
20,000 meters and now reaches
87,550 meters). The system of
seaports in Vietnam has been
(Source: VINMARINE, The Figures as of 12/2017)
synchronously invested in
infrastructure such as berths, wharves, mooring buoys, loading and unloading equipment, and
basic development with full functions and scale, and distribution across the regions, making full
use of natural conditions, ensuring the capacity to meet the entire requirements of rotation of
movements of goods. Most of the general ports and regional focal point ports have been newly
invested and upgraded to accommodate vessels of up to 30,000-50,000 DWT and larger in line
with the development trend of the world fleet.

Many new investment ports with the modern scale allow to receive large vessels up to hundreds
of thousands of tons such as ports in the Cai Mep - Thi Vai area of Ba Ria - Vung Tau province
receiving ships of 160,000 - 194,000 DWT and the Lach Huyen terminal, Hai Phong city can
receive 100,000 DWT ships.

Presently, Vietnam's seaport system basically meets the requirements of rotating cargoes
by sea, actively serving the process of socio-economic development in the coastal areas
and the whole country; creating a motive force to attract and promote related economic
sectors and industries.

On the maritime channels, currently, there are now in the country 42 public navigable channels
to the national ports with a total length of 935.9 km and 10 channels to the specialized ports.
The important navigable channels include Hon Gai, Hai Phong, Nghi Son, Da Nang, Quy Nhon,
Sai Gon - Vung Tau, Cai Mep - Thi Vai and the Hau river channel through Dinh An estuary. The
longest channel is the Dinh An - Can Tho channel of about 130.6 km, the shortest channel is
0.55 km long which is the channel to Sa Dec port in Dong Thap province (calculated from the
Tien river junction). The channel for large tonnage vessels to the Hau River (via Tat canal) of a
total length of 46.5 km was put into operation. 10,000 DWT ships with full load and 20,000
DWT ships after lightening can be assessable directly to the ports in the area of the Mekong Delta.

148 Whitebook 2018

VIETNAM’S PRESENT COASTAL TRADE ROUTES

(Source: VINAMARINE, 12/2017)

2. The Vietnamese ship fleet

According to the Report by VINAMARINE, ss of 30/06/2018, Vietnam has 1,647 vessels of
all types with a total tonnage capacity of 4,9 million GT and a total deadweight ton of about 8
million DWT (ranked fourth in ASEAN and 30th in the world). 79% (1,144 ships in 2017) are
cargo ships. The fleet of 1,144 ships comprises 995 general cargo and bulk vessels, account
for 60% of the total tonnage and container ships with 40 ships account for only 5% of the total
tonnage. The average age of the vessels is 14.9 years old.

3. Vietnamese Seaports’ Cargo Throughput

By 2017, the cargo throughput at Vietnamese seaports reached 536.4 million tons, up 17
percent against 2016, of which containerized cargo at 14.7 million TEUs, up 13 percent against
2016. As of 30/06/2018, the cargo throughput reached 248.8 tons, 17% increased against
the first half of 2017, of which containerized cargo at 8.7 million TEUs, 28% increased against
the first half of 2017. The projected throughput for 2018 will be 575 million tons whereof
containerized cargo being 16.206 million TEUs.

Currently, most of Vietnam's imports and exports are shipped by sea. For containerized cargo,
Vietnam's shipping fleet currently carries about 10% of the market, mainly in the near ranges,
transporting to China, Japan, South Korea and South East Asia. For bulk cargo, transporting about
12% of the market share of the exported and imported goods. On domestic shipments, the
Vietnamese shipping fleet basically covers nearly 100%, except for a number of specialized ships

Whitebook 2018 149

 such as LPG, or cement in bulk. The Hai Phong - HCM City container shipping services move
about 70% of the total cargo. Only about 30% of North - South commodities are transported
by road because of the demand for fast carriage (mainly frozen, seafood, fruits, high value goods
and automobiles).

4. Inland clearance depot system (ICD) in Vietnam

ICD is defined in Chapter IV, Section 4, the Maritime Code of Vietnam, 2015, in
accordance with the Code, Decision No. 2072/QD-TTg dated 22/12/2017 of the
Prime Minister which approved the adjustment of the Master Plan for the Development
of the Inland Clearance Depot System in Vietnam up to 2020, with Orientations to
2030, states that "The inland clearance depot is part of the transportation infrastructure
linked to sea port operations and the other infrastructure system”. Decision of the
Ministry of Transport No 1201/QD-BGTVT of June 11, 2018 approved the detailed
planning on development of the ICD system of Vietnam up to 2020, with orientations
to 2030. These are presently the legal basis for investment in the development of
Vietnam's ICDs. The ICD system plays an important role in facilitating the flow of
trade, and effective support to the Vietnamese seaport system, thus contributing to the
improvement of quality and competitiveness of the service sector.

a.The ICD system in the Northern Region

• The existing ICD system
In the North, there are 11 ICDs connected to Hai Phong seaport, located in Ha Noi (ICD
Gia Thuy, ICD My Dinh), in Phu Tho (ICD Thuy Van, ICD Hai Linh), in Hai Duong (ICD

CURRENT STATUS OF ICD NETWORK IN THE NORTH REGION

POSSIBLE
AREA
NO. ICD NAME EXPANSION TRAFFIC CONNECTION
(HA)
(HA) 2020

1 ICD Gia Thuy 1 0 Roads, Highway No.5

2 ICD My Dinh 5,2* 0 Highway 32, Ring Road No.3

3 ICD Tien Son 10 30 Expressway Ha Noi-Lang Son, Highway No.1,5 and 18

4 ICD Hai Duong 12 60 Highway No.5, 18, Railway Ha Noi - Hai Phong

5 ICD Tan Cang Hai Phong 30 0 Roads and Highway No.5

6 ICD Phuc Loc 34,5 35 National Road 10, coastal road, Inland waterway ports: Phuc Loc

7 ICD Thuy Van 2,8 0 Road

8 ICD Hai Linh 13,5 0 Road, Inland waterway ports: Hai Linh

9 ICD Lao Cai 13,5 ** Road, railroad

10 ICD Hoa Xa 5,6* 0 Urban road, National Road 1, National Road 10

11 ICD Mong Cai 39,77 20 National Road 18, Inland waterways: Coastal Route

150 Whitebook 2018

 (Source: Compiled by VLI)

Hai Duong). In Hai Phong (ICD Tan Cang Hai Phong), in Bac Ninh (ICD Tien Son), in Lao
Cai (ICD Lao Cai), in Ninh Binh (ICD Phuc Loc), in Nam Dinh (ICD Hoa Xa), and in Quang
Ninh (ICD Mong Cai). The average distance from ICDs to Hai Phong port is 120 km.
The total area of the ICDs is about 154 hectares. The area of ICDs in the North is small,
mostly under 10 hectares, most of which are not expandable, even two ICDs have received
the relocation decisions.
Total ICD throughput is about 50,000 TEUs/year, accounting for 0.2% of containers through
Hai Phong port. Northern ICDs tend to be far from seaports, mainly connected to national
road and rail systems without direct connections to sea and river routes. The scope of activities
of these ICDs is still limited, mainly providing road transport services, warehouse leasing and
some other related services. There are no modern loading and unloading facilities, no clear
transport effects between seaports and cargo sources.
In the economic corridor of Ha Noi - Lao Cai, there exist ICD Lao Cai, ICD Huong Canh and
ICD Hai Linh; the Ha Noi - Lang Son economic corridor with ICD Lang Son; the North West
region of Ha Noi with ICD Hoai Duc; the South East of Ha Noi with ICD Phu Dong, ICD
Co Bi, ICD Hai Duong and ICD Hai Linh, and the Cao Bang border gate area with ICD Cao
Bang. ICDs tend to be planned on export-import corridors linking provincial centers of goods
production, the pairs of Vietnamese-Chinese border gates with Hai Phong and Quang Ninh
seaports.

• ICD system in the North according to the Master Plan in the period 2020 - 2030
For the ICD system plan in the North in the period of 2020-2030, Please refer to the Decision
No. 1201/QD-BGTVT of 11/6/2018 of the Ministry of Transport.

Whitebook 2018 151

 b. ICD system in the Central - Highlands
• The existing ICD system
Currently, the Central Region does not have an existing ICD system due to the low volume of
containerized cargo through the central port system, the container receiving ports are generally
sufficient and surplus warehouse capacity.
The planning of ICDs will create favorable conditions for goods from the Central Highlands
provinces, Laos and ASEAN countries connected to the seaports of groups 3 and 4.
• ICD system in the Central - Highlands in the period 2020-2030
For the ICD system plan in the Central-Highlands in the period of 2020-2030, Please refer to
the Decision No. 1201/QD-BGTVT of 11/6/2018 of the Ministry of Transport.
c. ICD system in the South
• The current ICD system
At present, there are about 12 ICDs connecting to Ba Ria -Vung Tau seaports and Ho Chi
Minh City, including 6 ICDs in the area of Ho Chi Minh City ( ICD Phuoc Long, ICD Transimex,
ICD Tanimexco, ICD Sotrans, ICD Phuc Long and ICD Tan Tao), 4 ICDs in Dong Nai (ICD
Tan Cang - Long Binh, ICD Dong Nai, ICD Bien Hoa, ICD Tan Port - Nhon Trach) and two
ICDs in Binh Duong (ICD Tan Cang - Song Than, ICD TBS). The total area of the ICDs is
about 284 ha. The scale of most ICDs is over 10 hectares, the largest being Tan Cang - Long
Binh port of 105 hectares and be able to expand to 300 hectares.
ICDs are located near the seaports, the average distance is about 20-60km. Most ICDs in the
South connect to the inland waterways. These ICDs have played a huge role in supporting the
Group 5 of the seaport system, but these ICDs are mostly located near the seaports in HCM
City. In the Mekong Delta and Cai Mep - Thi Vai area, there is no ICD due to insufficient large
volume of goods and the ports in the region have not been exploited at full capacity.
In recent years, ICDs in the South are considered to be operated in a quite effective way,
providing good support for the seaports in the transshipment of containerized and imported
goods, promoting the advantage of inland water transport (about 35%), reducing congestion at
seaports and urban transport. The volume of goods through Group 5 of the seaports accounts
for about 60% of the country's container volume. It is estimated that 30-40% of containerized
imports and exports have gone through customs procedures at the ICDs. In 2014, the People's
Committee of Ho Chi Minh City sent out a proposal to adjust the planning to relocate Truong
Tho port zone including ICD Phuoc Long, ICD Phuc Long, ICD Tanamexco, ICD Sotrans,
ICD Transimex. The Truong Tho ICD group has connections with all seaports in HCM City
and Ba Ria-Vung Tau. Exploitation activities at these ICDs have greatly contributed to the
clearance of goods jams at seaports and have helped reduce traffic congestion in Ho Chi Minh
City as vehicles do not have to pass by the City centre. Most of the goods are transported by
waterways from the seaports such as Cat Lai, Hiep Phuoc and Ba Ria-Vung Tau ports to ICDs
and vice versa.
• ICD system in the Southern Region in the period 2020-2030
For the ICD system plan in the Southern region in the period of 2020-2030, Please refer to
the Decision No. 1201/QD-BGTVT of 11/6/2018 of the Ministry of Transport.
The whole Southern region plans for 30 ICDs, of which 17 ICDs belong to the North-East
Economic Zone and 05 ICDs to the South-West region. Larger ICDs are on the trend of
development.
(Please see more on the Warehouse and Storage Part, Chapter V below)

152 Whitebook 2018

FIGURE. CURRENT STATUS OF ICD NETWORK IN THE SOUTHERN REGION
POSSIBLE EXPANSION DESIGNED
AREA (HA)
NO. ICD NAME CAPACITY
(HA) TRAFFIC CONNECTION
2020 2030 (1000 TEU)
I Ho Chi Minh City
Waterways:
1 ICD Phuoc Long 12* 0 0 200 Sai Gon River
Roads: Ha Noi Highway
Waterways:
2 ICD Transimex 9,4* 0 0 500 Sai Gon River
Roads Ha Noi Highway
Waterways:
3 ICD Sotrans 10* 0 0 200 Sai Gon River
Roads: Ha Noi Highway
Waterways:
ICD Tanamexco - Tay
4 12,5* 0 0 500 Sai Gon River
Nam
Roads: Ha Noi Highway
Waterways:
5 ICD Phuc Long 10* 0 0 200 Sai Gon River
Roads: Ha Noi Highway
6 ICD Tan Tao 6,4 ** ** Roads: Dai Han HW
II DONG NAI
Highway No. 1, No. 51,
ICD Tan Cang-Long
7 105 50 150 750 HCM-Long Thanh - Dau Giay
Binh
Expressway
8 ICD Dong Nai 18 ** **
Waterways:
Dong Nai River
9 ICD Bien Hoa 18 20 25 300
Roads: Highway No.51, Bien
Hoa - Vung Tau Expressway
Waterways: Rivers Dong Nai,
ICD Tan Cang Nhon Nha Be, Long Tau
10 11 11 15 160
Trach Roads: Provincial Road
No.769, Highway No.51
III BINH DUONG
ICD Tan Cang - Song Road No.743, Highway No.13,
11 50 0 ** 750
Than Ring roads 2,3
Waterways:
Dong Nai River
12 ICD TBS Tan Van 22 30 50 450
Roads: Highway No.3, Ring
roads 2,3

Notes: * Relocation decision received. ** No information about expansion

Whitebook 2018 153

 III. AVIATION
There are 21 airports currently operating in Vietnam, including 08 international airports: Noi Bai,
Cat Bi, Da Nang, Cam Ranh, Phu Bai, Tan Son Nhat, Can Tho and Phu Quoc, and 13 domestic
airports: Dien Bien, Dong Hoi, Vinh, Phu Cat, Tuy Hoa, Pleiku, Chu Lai, Lien Khuong, Buon Ma
Thuot, Ca Mau, Rach Gia, Con Dao and Tho Xuan. Of the above airports, only four airports
have separate cargo terminals. The remaining airports do not have cargo terminals, and all cargo
handled in the passenger terminal. At present, only the large airports such as Noi Bai and Tan
Son Nhat have logistics centers for air cargo handling. In Noi Bai, the logistics centers such as
ACVS and ALS handle most of the cargo volume of airfreight exports and imports with diverse
categories of goods.

On August 10, 2018, the People’s Committee of Can Tho City and Vietnam Airlines signed an
Agreement on Developing the Can Tho Air Logistics Centre with an area of about 27 hectares
nearby the Can Tho Airport. The Van Don Airport (Quang Ninh Provice) is expected to be
operational by the end of 2018.

Facing the present demand, it is necessary to have a breakthrough strategy in the development of
freight transport along with the establishment of air logistics service centers to meet the demand
and the types of Vietnam's exports and imports as well as fregit transshipment hub in the region.

With the growth of the economy, the air cargo market in Vietnam has grown at an average rate of
15.6% per year for the period 2011-2017. The aviation market in 2017 continued to have high
growth in passenger and cargo volumes. Total cargo market in 2017 was approximately 1.13
million tons, up 25.9% compared to 2016. The transport capacity of Vietnam Airlines in 2017
reached 318 thousand tons of cargo, up 11.3 % compared to 2016.

MAP OF ICD DISTRIBUTION IN THE SOUTHERN REGION

Source: Compiled by VLI

1. Domestic airfreight market

Currently, Vietnam has 04 airlines operating air transportation. They are Vietnam Airlines, Jetstar
Pacific Airlines, Vietje Jet Air and VASCO operating 53 domestic routes, connecting Ha Noi,

154 Whitebook 2018

VIETNAM AIR ROUTES MAP

Da Nang and Ho Chi Minh City by the network of south-axis routes from three centers in
combination with development of the "point to point" network with the localities.

The domestic market for the period of 2011-2017 grow at an average annual rate of 10%. In
2017, the total domestic cargo volume was approximately 230.5 thousand tons, an increase
of 14.6% compared to 2016. The commodity structure in the recent years has not changed
with key commodities such as seafood ( shrimp, crab, baba ...), fruits, raw materials for
textiles, live animals (chicken, ducks). In general, the major markets in recent years have seen
growth, for example: to/from Ha Noi (39.3%), Ho Chi Minh City (42.6%), Da Nang (6%).
Vietnam Airlines takes the market linon share of 68.3%, followed by Vietjet with 23.8%,then
followed by Jestar Pacific and VASCO with 7.9%.

2. International airfreight market

There are involved in the operation of 64 foreign airlines from 26 countries/regions, of which
24 major airlines in the region as well as the world to operate airfreight flights such as Singapore
Airlines Cargo, Cargolux Airlines, Emirates Airlines, Etihad Airways, Federal Express, Lufthansa
Cargo, Korean Air, Turkish Airlines ... Foreign airlines and Vietnam Airlines, Vietjet Air and Pacific
Airlines are operating more than 140 international flight routes from Ha Noi, Ho Chi Minh City,
Da Nang, Nha Trang, Hai Phong and Phu Quoc.

The outputs of international airfreight transport traffic always increase at a high level with 17.4%
in the period 2011-2017. The year 2017 reached 905.3 thousand tons, up 29.2% compared
to 2016. The structure of arrival and departure aircargoes consists of electronic components,
garment, agricultural products, seafood ... International cargo volume to/from the Noi Bai
International Airport held 59% the market share, thanks to Samsung components. Tan Son
Nhat International Airport accounted for 40.3% of the market share to/from Vietnam. Due to
the competition of international airlines, the transport market share of Vietnamese airlines has
dropped sharply to just 12-13% in the period 2014-2016 and by 2017 the market share was
only 9, 7%
(Report by MOT at the National Conference on Logistics 16/4/2018 and VLA’s compilation)

Whitebook 2018 155

 IV. INLAND WATERWAYS
Presently, Vietnam has 2,360 rivers and canals with a total length of about 41,900 km, an
average density of 0.27 km /1 km2 and 124 river mouths. Vietnam is a country having a great
river and canal density in the world. The total length of inland waterways under management
and operation is 17,253 km. The Central management of inland waterways consists of the total
length of about 7,071.8 km (accounting for 41% of the total length of inland waterways being
exploited and managed nationwide). These are the arterial routes that link the economic centers,
large industrial parks of the region and the whole country.

- The Northern Region: The Northern waterways have 17 routes with a total length of
2,715.4km, mainly on the Red River, Duong River, Thai Binh River and Luoc River. The
waterway network linking the provinces of the Red River delta with the seaports of Hai Phong
and Quang Ninh, connecting with the Northern midlands and mountainous provinces through
the Lo river. In addition, Quang Ninh is also the hub of the river-cum-sea transport route from
the North to the South to share the burden on the roads.
- The Central Region: Mainly independent inland waterways or within the province only
(from Thanh Hoa Province to Quang Nam Province). River routes have steep terrain, connecting
from sea mouths deep to inland districts in remote areas of localities. In these areas, every year
in the rainy season they are often affected by floods and flash floods. The river water rises very
fast with the strong current flow, but the water level also reduces also very fast (only after several
days). The scope of exploitation of transport for sea-cum- river going ships is mainly from the
National Highway No.1 to the sea. Some of provinces have rivers capable of transporting goods
and passengers deep into the hinterland by waterways.
- In the South: Currently the national inland waterways currently run by the central government
are 2,968.9 km. The network
THE MAP OF THE RIVER NETWORK IN THE NORTH of rivers and canals at high
densities runs through most
economic centers, urban
centers and industrial parks,
linking river harbors and
seaports and getting to the sea
through many river estuaries
to form favorable waterway
transport axes.

Inland waterway navigation

in the Mekong delta is very
developed. Annual waterway
transport accounts for 65-
70% in tons and 70-75%
in tonne/km of the cargo
transport in the whole region.
The river network in the south
is formed by the two main
river systems, the Dong Nai
River system and the Mekong
River system. These two river
systems are connected by
channels of high transport
density such as Cho Gao, Lap
Vo - Sa Dec channels, Hong
Ngu canal, Tan Chau canal
and Vinh Te canal.

156 Whitebook 2018

 THE MAP OF THE RIVER NETWORK IN THE
CENTRAL OF VIETNAM

On the Inland waterway habour system: By the end of 2017, there

are 272 inland water ports (259 cargo ports, 13 passenger ports);
8,730 inland waterway berths; 2,526 passenger river crossings. THE MAP OF THE RIVER NETWORK IN THE SOUTH
In particular, all inland water ports have been announced; For the
inland berths, there are 6,514 licensed berths (accounting for 75%)
and 2,058 licensed cross-river berths (81.5%).

There are problems in loading and unloading of goods and management of inland waterway
harbors and berths. Apart from a number of inland waterway ports of joint venture enterprises,
or some specialized ports with appropriate cargo handling equipment, most of inland waterway
wharves still use backward cargo handling equipment technology and a primitive wharf system.
Attention in the investment, upgrading or construction of ports and terminals to serve passengers
in the operation of high-speed passenger ships has not paid due attention.

Therefore, the ability to adapt and integrate with the transport activities in the area is
very difficult, unable to get access to the multimodal transport mode, hence somewhat
affecting the quality and rotation time of the vehicle fleet and reducing the competitiveness
of inland waterway transport.
(Report by MOT at the National Conference on Logistics 16/04/2018.)

V. RAILWAYS
1.Vietnam Railways
There are 3,143km of railways in Vietnam, of which 2,531km of mainline, 612km of branch and
railway line, including 3 types of rails: 1000mm- 85%, 1435mm- 6%, 1435mm & 1000mm.
accounted for 9%. Railway density reached 9.5 km /1000 km2. Technical standards and the

Whitebook 2018 157

 MAIN ROUTES LENGTH (KM) GAUGE (MM)

Ha Noi - Ho Chi Minh city 1,726 1,000

Ha Noi - Hai Phong 96 1,000

Ha Noi - Lao Cai (to Kunming) 285 1,000

Ha Noi - Dong Dang (to Nanning) 165 Dual gauge (1,435 & 1,000)

Ha Noi - Quan Trieu 55 Dual gauge (1,435 & 1,000)

Kep - Ha Long - Cai Lan 108 1,435

Luu Xa - Kep 57 1,435

Bac Hong - Van Dien 40 1,000

railway infrastructure in our country are at a low level and backward: The rectangle faces many
curves with too small radius (especially with curves R.

The national railway network is divided into 7 main routes: North South (Ha Noi - Ho Chi Minh
City), Ha Noi - Hai Phong, Ha Noi - Dong Dang, Ha Noi - Lao Cai, Ha Noi - Quan Trieu , Kep
- Luu Xa, Kep - Ha Long- Cai Lan. (See Figures below).

Vietnam has a plan to develop about 7km of the rail missing tracks from 1000mm to 1435mm
to connect Lao Cai with Kunming.
(Sources: MOT Report at the National Logistics Copnference on 16/4/2018 and VLA compilation)

On 31/7/2018, The National Assembly Standing Committee issued Resolution No. 556/NQ-
UBTVQH14 which provided, among others, the allocation of VND7,000 billion for implementing
04 urgent projects to upgrade rail and rail-bridges.
(Source: https://thanhnien.vn/tai-chinh-kinh-doanh/cap-7000-ti-dong-cho-4-du-an-duong-sat)

158 Whitebook 2018

THE MAP OF THE WHOLE RAIL NETWORK OF VIETNAM

Whitebook 2018 159

 2. Railways means of transport
On means of transport: Currently, the national railways is managing, using and operating the
railway facilities as follows: - The locomotives: a total of 296 locomotives having long life in use,
made in many countries (China, India, Germany, Czech Republic, USA and Belgium); being used
for more than 40 years: 44 units accounting for 14.8%; from 30 to 40 years: 86 accounting
for 29%; from 20-30 years: 48 units accounting for 16.2%; and under 20 years: 118 units,
accounting for 39.9%. The locomotives are of many types and various capacities, of which the
locomotives of low capacity, old and outdated are still many (accounting for nearly 60%), thus
limiting speeds, and high fuel consumption, and obstacles in handling, maintenance and repairs.
About wagons and cars: There are 5,957 carriages of all kinds (1,010 passenger cars, 4,947
wagons) being long in use, produced in many countries (Vietnam, China, India). Details are as
follows: Use life of over 40 years: 1,523 units accounting for 25.6%; from 30 to 40 years: 1,987
accounting for 33.3%; from 20-30 years: 303 units, accounting for 5%; of less than 20 years:
2,144 units, accounting for 36%.

The manufacture of special-use container cars and wagons with roof has not met the demand
for transport. Wagons include many different types, most of them having the time to exploit from
30-40 years, the load capacity is low, only from 28-34 tons /unit. Tare weight usually accounts
for 40% of the total wagon weight, which results in wasted traction.

3. Railways transport
Transport by rail: In 2016, Vietnam Railway Corporation carried out import and export goods by
rail with the volume of 692 thousand tons, expected in 2017 reached about 890 thousand tons.
The volume of these exports and imports is
INTERNATIONAL RAIL ROUTES WITH CHINA mainly from and to China, being transported on
the railway corridors such as 1000mm gauge
rail corridor: Kunming - Son Yeu (China) - Lao
Cai (Vietnam) - Hai Phong. The 1435mm
gauge rail corridor transports goods mainly
imported from China through Bang Tuong
(China) - Dong Dang (Vietnam) border gate to
Yen Vien station.

The volume of international cargoes from

Vietnam to third countries via China is still
modest, in 2016 only about 2100 tons with
commodities such as tea and food items mainly
coming to Kazakhstan and in transit to Central
Asian countries such as Uzbekistan, Tadjikistan,
Kyrgyz.

In order to develop domestic logistics, Vietnam

Railway Cooperation and Saigon New Port
signed a cooperation agreement. The two sides
will cooperate to invest in the construction and
trading of storage infrastructure, loading and
unloading equipment, development of railway
logistics services at the existing cargo terminals
of the Vietnam Railways at the stations of
Song Than, Yen Vien and Dong Anh then
later expanding the investment and business
infrastructure at freight stations across the
1-Nanning/Dong Dang- Yen Vien (Ha Noi) railway network. Developing reefer container
2-Kunming- Hekou/ Lao Cai- Yen Vien (Ha Noi)

160 Whitebook 2018

transport is one of the priority directions for cooperation between Vietnam Railway and Saigon
New Port.

4. International Rail routes with Europe via China

In the international transportation of goods between Vietnam and China, the transport business
enterprises of the Vietnam Railway Corporation has been coordinating with the logistics
companies of the China Railway and the TRACO 1 Joint Stock Company, Hai Phong Railway
Service Company, Hai An Railway Service Company, Viet-Trung International Trading and
Transportation Company Limited and international shipping companies to serve customers
transporting international freights from warehouse to warehouse.

On 13/06/2017, the container train of Con Minh - Son Yeu (China) - Lao Cai (Vietnam) - Hai
Phong (854 km journey) operated on a pilot basis, and on 10/08/2017 the regular services
between Truong Vuong (China) - Dong Dang (Vietnam) - Yen Vien (about 1,000 km) also
operated on a pilot basis. The container train services mentioned above will operate regularly to
meet the needs of the market.

The parties have prioritized the following journeys for container transportation:
- Ha Noi (Yen Vien) - Dong Dang - Altykol - Almaty / Astana.
- Ha Noi (Yen Vien) - Lao Cai - Altykol - Almaty / Astana.
- Ha Noi (Yen Vien) - Dong Dang - Altykol - Moscow.
- Ha Noi (Yen Vien) - Dong Dang - Altykol - Brest (Malachevichi) - Duisburg (Federal Republic
of Germany).
- Ha Noi (Yen Vien) - Dong Dang - Mantcjuria (Zabaikalsk) - Moscow.
- Ha Noi (Yen Vien) - Dong Dang - Mantcjuria (Zabaikalsk) - Ekaterinburg.
- Ha Noi (Yen Vien) - Dong Dang - Mantcjuria (Zabaikalsk) - Novosibirsk.
- Ha Noi (Yen Vien) - Dong Dang - Mantcjuria (Zabaikalsk) - Brest (Malachevichi) - Duisburg
(Federal Republic of Germany)
- The prospect of cooperation with the Kazakh railway, railway and China Railway in the

Whitebook 2018 161

162 Whitebook 2018
 development of logistics on the international railway between the Vietnam - China - Kazakhstan
- Russian Federation - EU is very large.

The journey of container liner trains from Vietnam to Moscow on the journey, expected time
will be from 18-20 days, if going by sea will take from 40-45 days. This is a great advantage of
rail transport in Eurasia, especially for the transportation of valuable commodities, requiring fast
shipping as well as special preservation.

Currently, China-Europe-China Transit runs Kazakhstan's transit trains on the following routes:

Chongqing - Duisburg (Federal Republic of Germany) - Chongqing, Wuhan - Hamburg (Federal

Republic of Germany) - Wuhan, Chengdu - Lodz (Poland) - Chengdu, Chengdu - Nürnberg
(Federal Republic of Germany), Wuhan - Pardubice (Czech Republic), Hamburg (Federal Republic
of Germany) - Zhengzhou, Yiwu - Madrid (Spain - Hamburg, Germany - Lanzhou - Hamburg
(Federal Republic of Germany) - Lanzhou. Running time of the train container liners on average
14-16 days, reducing the time compared to sea lines lasting 45-50 days.
The journey of container liner trains
from Vietnam to Moscow on the
journey, expected time will be from 18-
20 days, if going by sea will take from
40-45 days. This is a great advantage
of rail transport in Eurasia, especially
for the transportation of valuable
commodities, requiring fast shipping
as well as special preservation.
(Report by MOT at the National
Conference on Logistics 16/04/2018,
Report by VRC and RATRACO
04/2018.)

Whitebook 2018 163

164 Whitebook 2018 Photo: Nguyen Minh Tan
 CHAPTER VI:
SITUATION OF VIETNAM LOGISTICS SERVICES
INDUSTRY

I. NATIONAL LOGISTICS PERFORMANCE INDEX

The Logistics Performance Index (LPI), which is published by the World Bank, is rated on a
5-point scale, with six dimensions. LPI evaluates a country's international logistics performance,
based on surveys in more than 160 countries, the standardized questionnaire consists of two
parts, international and domestic as logistics is understood as a network of services supporting
the movement of goods across and within borders. 6 key dimensions consist of:

LPI COMPARISONS AMONG ASEAN MEMBER COUNTRIES - 2018

• Efficiency of the clearance process (i.e., speed, simplicity and predictability of formalities) by
border control agencies, including customs.
• Quality of trade and transport related infrastructure (e.g., ports, railroads, roads, information
technology).
• Ease of arranging competitively priced shipments.
• Competence and quality of logistics services (e.g., transport operators, customs brokers).
• Ability to track and trace consignments.
• Timeliness of shipments in reaching destination within the scheduled or expected delivery
time.

Whitebook 2018 165

 The Vietnam Logistics Performance Index (LPI) 2018 was released by the World Bank
in its July 2018 report, whereby Vietnam was ranked 39 out of 160 countries surveyed,
up 25 from the previous rank in 2016 (64/160).
The score is 3.27 compared to 2.98 in 2016, an increase of 0.29 points. In the ASEAN region,
Vietnam ranked third after Singapore (ranked 7th) and Thailand (ranked 32nd). Vietnam ranks first in
the emerging markets and the highest ranking in the low-income group. All the 6 dimensions of LPI
2018 have increased significantly, including the highest increase in quality of logistics services (ranked
33, up 29 levels) and the ability to track and trace goods (ranked 34, up 41). Dimension for rating
increases very well is Customs (ranked 41, up 23 levels), Logistics infrastructure (ranked 47, up 23
levels). Demension for delivery time (ranked 40, up 16) and criteria for international shipments (ranked
49 up 1 grade compared to 2016).

LPI COMPARISONS AMONG ASEAN MEMBER COUNTRIES - 2018

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4 3,31 3,27
3,22 3,01 2,9 2,71
3 2,7 2,58
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The figure below shows some countries that perform well on logistics operations in the 2018 survey,
including Vietnam: LPI 2018 Report also showed that Vietnam's average international LPI
score over the four surveys (2012, 2014, 2016 and 2018) ranked 45th in the world.

COMPARATIVE LPI OF VIETNAM FROM 2007-2018

LPI DIMENSIONS 2007 2010 2012 2014 2016 2018

SCORE RANK SCORE RANK SCORE RANK SCORE RANK SCORE RANK SCORE RANK
LPI 2.89 53 2.96 53 3.00 53 3.15 48 2.98 64 3.27 39
Customs 2.89 37 2.68 53 2.65 63 2.81 61 2.75 64 2.96 41
Infrastructure 2.50 60 2.56 66 2.68 72 3.11 44 2.7 70 3.01 47
International shipments 3.00 47 3.04 58 3.14 39 3.22 42 3.12 50 3.16 49
Logistics competence
2.80 56 2.89 51 2.68 82 3.09 49 2.88 62 3.40 33
and service quality
Tracking & tracing 2.90 53 3.10 55 3.16 47 3.19 48 2.84 75 3.45 34
Timeliness 3.22 65 3.44 76 3.64 38 3.49 56 3.5 56 3.67 40
(Source: Compiled by VLA)

166 Whitebook 2018

II. GROWTH RATE OF THE LOGISTICS SERVICES INDUSTRY, 2017-2018
In 2018, the logistics service industry continues its growth momentum in the previous years
with the growth rate of about 12-14% thanks to the growth of the economy in general and
importation and exportation in particular, and especially the special attention to development of
the logistics services by the Government and Ministries, sectors and localities.

Turnover statistics of the logistics companies listed on the stock exchange show a growth rate
of 12.77%. According to the statistics of the General Statistics Office, the volume of goods
transported in the first 8 months of 2018 increased by 9.6% over the same period last year and
the volume of goods rotated increased by 7.1%. The growth rate of domestic transport goods
was significantly higher than that of overseas carriage (9.7% vs. 2.8% in transport volume and
9.7% against 4.1. % in volume of goods traded). The export and import growth was 14%.

Based on the above development, we calculate and estimate the growth of logistics
service industry in 2018 at about 12% -14%.

III. THE LOGISTICS COST EQUIVALENT TO GDP

The Final Report on Consulting Services: Support to Ministry of Transport on Developing Multi-
Modal Transport, March 2014 by ALC (World Bank) reported that Vietnam National Logistics
Cost equals to 20.9% of GDP in 2014.

According to the Report, the logistic cost in total commodity costs accounts for a high proportion
of 29.8% in rice production, 29.5% in fruits and vegetables and 22.8% in furniture. And accounted
for a certain proportion in high value manufacturing sectors such as electronicl equipment
& components (3.5%), pharmaceuticals (0.3%), automobiles (2%) and electronics (1.2% %).
Therefore, when analyzing the ratio of logistic costs equal to Vietnam's GDP and that of other
countries in the world, it is necessary to analyze in depth to see that the ratio of logistics cost to
GDP will be low when the contribution value to GDP comes from high value production sectors
and vice versa.

According to the results of the in-depth interviews in August, 2018, the industries that make
high value items such as automobiles, electronic components and steel, logistics costs in the
product cost are relatively small at less than 5%. While for consumer goods, e-commerce items,
apparel or agricultural produces, logistic costs account for a large proportion of the commodity
costs between 10% and 20%. Enterprises responded the answer quite similar that in logistics
costs, transportation costs take the highest contribution rate of about 60-80%, in addition to
other components such as loading and unloading costs and clearance procedures after the high
costs of transport.

Based on the calculation format of the ALG, according to calculation of the VLA, the
logistics costs of Vietnam in 2017 would be from 14.5% to 19.2% of the total national
GDP. The current average is around 16% - 17%.

In comparisons with logistics cost/GDP with ASEAN 6, in 2016 with Singapore 8.5%, Indonesia
24%, Thailand 15%, Malaysia 13%, Philippines 13% and Asia Pacific average 12,7. The logistics
costs in Vietnam are not so high.

Whitebook 2018 167

 IV. OUTSOURCED LOGISTICS ACTIVITIES
According to the survey and in-depth interview of VLA/VLI, August, 2018 on the use of logistics
services in production enterprises, the results show that the level of the in-house logistics services
and outsourced logistics activities differs. International logistics activities tend to be more outsourced
because owners of goods do not own means of tranport, whereas domestic logistics can often
be handled in-house. (See figures below). Most FDI enterprises outsourcing logistics services.
According to the Vietnam Economic Times on 21/02/2018, in 2017, FDI enterprises exported
155.4 billion USD, accounting for 72.6% export turnover, export surplus nearly 30 billion USD.
Accordingly, the import statistics of FDI enterprises in 2017 was about USD 125 billion, accounting
for 61% of Vietnam's import value.

In the report "Assessing Logistics Performance in the Philippines" by Dr. Ruth Banomyong, World
Bank/IFT consultant, 2017, it was stated that “The case in Vietnam where the ratio of logistics
outsourcing is relatively high at 68 percent and in-house of 32%" (Page 27)

PHILIPPINES INDONESIA VIETNAM

Philippines Indonesia Vietnam

In
In In house
Outsource Outsource 32%
49% house 49% house
51% 51% Outsource
68%

Source: Survey data, WB logistics performance surveys

Ratio of outsourced logistics activities

RATIO OF OUTSOURCED LOGISTICS ACTIVITIES

Warehouse 100.0
Import/export clearance 78.4
Inland transportation 73.0
International transportation 70.3
Demand forecast 70.3
Material purchasing 70.3
Insurance brokerage 40.5
Freight forwarding 32.4
Customs clearance 32.4
Handling 27.0
Quality control 24.3
Bonded warehouse 16.2
Distribution 10.8
Cross-docking 8.1
Supply chain 8.1
Labeling, marking 8.1
Reverse 5.4
Inventory management 5.4
Assembly 2.7
Project commodities 2.7
Order processing 2.7
Information system management 0.0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

(Source: VLA/VLI Survey 08/ 2018

(Source: VLA/VLI Survey 8/ 2018

168 Whitebook 2018
 Logistics activities done by enterprises
LOGISTICS ACTIVITIES DONE BY ENTERPRISES

Material purchasing 77.8

Warehouse 77.8
Customs clearance 75.0
Import/export clearance 75.0
Packing/ repacking 61.1
Order processing 52.8
Demand forecast 52.8
Inventory management 41.7
Handling 36.1
Labeling, marking 36.1
Freight forwarding 27.8
Inland transportation 25.0
Insurance brokerage 25.0
Quality control 22.2
Distribution 16.7
International transportation 11.1
Assembly 11.1
Reverse 11.1
Supply chain 11.1
Project commodities 5.6
Bonded warehouse 2.8

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

(Source: VLA/VLI Survey in 8/2018)

(Source: VLA/VLI Survey in 8/ 2018)
Of the interviewed firms, most of the transport was outsourced, except for companies having
the advantage of investment in both facilities and manpower. According to the survey, there are
two main reasons why manufacturing companies have not yet decided to outsource the entire
logistics services. Firstly, the interruptible business process if outsourced (54.8%) and secondly,
the cost of outsourcing is high (41.9%), besides, the fear of leaking information (32.3%) also
makes the owner afraid to outsource logistics services.

Outsourced logistics activities

Enterprises often select to self-services and outsourcing in order to ensure their effective production
and meet markets demand. Typically, the warehousing services are outsourced by 100%.
Domestic transport and international transport are the two services having high outsourcing rates
of 73% and 70, 3% respectively. Domestic logistics service providers are firstly selected by 52.8%
of the owners of goods while only 30.6% selected both domestics and international providers.
This shows their trust in selecting domestic logistics providers.

V. CONTRIBUTION OF LOGISTICS SERVICES TO GDP

According to the Statistical Yearbook 2017, the net revenue of the production and business
of transport and warehousing enterprises in 2017 was VND 591,977 billion, and with the
estimation to account for 3.5% of the gross domestic product according to the existing prices of

Whitebook 2018 169

 Reasons for outsourced logistics activities
REASONS FOR OUTSOURCED LOGISTICS ACTIVITIES

No ability to do 54.1
More professional 54.1
Diverse services 35.1
Nominated by customers 21.6
Lower cost 21.6
Bigger network 16.2
Better quality 10.8
More reliable 2.7

0% 10% 20% 30% 40% 50% 60%

(Source: VLA/VLI Survey in 8/2018)

Based on the above explanation, VLA indicated that the outsourced logistics activities
of Vietnam presently are about 60%-70%.

some important economic sectors. Hence, it can be concluded that although the turnover of the
logistics service industry is increasing but the contribution to GDP of the industry is still limited.

As per the below research of the NOMURA Research Institute Ltd, Japan showed below, Vietnam’s
transport and warehousing sectors’s contributor to GDP 2016 was 2.88%. The logistics and
warehousing market in Viet Nam steadily grows and reaches USD4.0 billion in 2016. Market
values do not include in-house logistics market of manufacturer, distributor and retailer.

In fact, if official figures are fully and accurately calculated with turnover form Port businesses,
not-yet-outsourced logistics from shippers, and private LTL domestics transportation as well as
biked last miles delivery then the structure of the logistics service industry in GDP will be higher.
It would contribute up to about 4-5%of GDP in 2017 and surely higher in 2025 by VLA/VLI’s
forecasting.

CAGR MEANS "COMPOUND ANNUAL GROWTH RATE" FOR YOUR REFERENCE

(Source: Nomura Reseach Institute Ltd. Mr.Takahiro Wakana)

170 Whitebook 2018

VI. PROFITS OF LOGISTICS SERVICE COMPANIES OPERATING IN VIETNAM
The following statistics show the role of profit contribution of enterprises operating in the field of
transportation and warehousing of the country.

PROFIT BEFORE TAX OF TRANSPORT AND WAREHOUSING ENTERPRISE

Unit-VND billion

2017
TRANSPORT, WAREHOUSING 2010 2013 2014 2015 2016
(ESTIMT)

Rail, Road &Pipeline

866 372 1280 1326 1533 1326
Transport

Inland waterways Transport -538 -7875 -5006 -1311 959 -1311

Air transport 1015 -93 606 657 1021 657

Warehousing & Activities

Services in support to 6704 3137 13586 16274 24149 16274
Transport

Post & Delivery 114 373 529 522 529 522

(Sources: Statistical Yearbook 2017 and VLA/VLI Forecast for 2017 based on Geometric
Mean Method)

PRE-TAX PROFITS BY ENTERPRISES OF TRANSPORT, WAREHOUSING AND SUPPORTING SERVICES

Unit-VND billion

(Source: Statistic Yearbook 2017)

Whitebook 2018 171

 VII. NUMBER OF VIETNAM’S LOGISTICS SERVICE PROVIDERS
1. Number of enterprises engaged in transport, storage and supporting services
Of the total enterprises engaged in transport, storage and supporting services, there are more
than 70% based in Ho Chi Minh City. Approximately 15% of the total logistics companies in
Vietnam are members of VLA but they represent over 60% of the country's market share. Among
members of VLA, many are local leading companies such as Saigon Newport, Gemadept,
Transimex, Sotrans, Indotrans, TBS Logistics, Bắc Kỳ Logistics, U&I Logistics, Vinafco… who can
be the proud of VN logistics community. And, almost of top top 25 global LSP all are on
board in Việt Nam such as DHL, FedEx, UPS, Damco, Schenker, Nippon Express, Kintetsu World
Express, CJ Logistics, Logwin...

There are about 30 trans-national logistics service providers operating in Vietnam. Major
companies can be named as DHL, FedEx, UPS, Maersk Logistics, APL Logistics, Schenker,
Nippon Express, KWE, CJ Logistics, KMTC Logistics, Log Win... Foreign logistics service providers
and trans-national logistics companies in Vietnam are an important part in the development of
the logistics market of Vietnam, in the context of Vietnam's deepen integration into the world
economy.

(Source: Statistic Yearbook 2017)

NUMBER OF LOGISTICS SERVICE PROVIDERS AS OF 31/12/2016 BY CAPITAL SIZE

FROM 0,5 FROM 1 TO FROM5 TO FROM 10 TO FROM 50 FROM 200 FROM
UNDER
TOTAL TO UNDER UNDER 5 UNDER 10 UNDER 50 TO UNDER TO UNDER 500
SECTORS 0,5
ENTERPRISES 1BILLION BILLION BILLION BILLION 200 BILION 500 BILLION BILLION
BILLION
VND VND VND VND VND VND VND
Transport,
30.969 2.388 2.683 13.547 5.299 5.458 1.146 264 184
Warehousing
Rail, Road and Pineline
18.277 835 1.175 8.414 3.651 3.538 547 89 28
Transport
Inland waterways
1.632 65 52 437 297 527 178 47 29
Transport
Air Transport 7 1 2 4
Warehouse and Transport
10.299 1.357 1.358 4.331 1.268 1.350 398 117 120
supporting activities
Post and delivery 754 131 98 365 83 43 22 9 3
Percentage of Incomes/
7,71 8,66 43,74 17,11 17,62 3,7 0,85 0,59
Total enterprises
(Source: Statistic Yearbook 2017)

172 Whitebook 2018

The scale of capital as of 2016 was quite small.The number of enterprises with operating capital
less than VND10 billion accounted for more than 77% and only 0.59% of enterprises having
working capital of over VND 500 billion. According to Decree 39/2018/ND-CP guiding the Law
on Small and Medium Enterprises Promotion, effective from 11/03/2018, the number of small
and too-small enterprises in the field of transportation, warehousing and transport supporting
services, and postal delivery services accounted for 94.84%.

NUMBER OF ENTERPRISES OPERATING AS OF 31/12/2016 BY SIZE OF LABOR

UNDER 5-9 10-49 50-199 200-299 300-499 500-999 1000-4999 5000

5 PERSONS PERSONS PERSONS PERSONS PERSONS PERSONS PERSONS PERSONS PERSONS

Total 12.025 8.400 8.781 1.385 152 114 74 32 6

Rail, road &pineline

5.724 5.659 5.976 741 73 54 37 10 3
Transport

Inland waterways Transport 341 385 719 154 14 11 6 2

Air Transport 1 0 2 1 1 1 1

Warehous and Transport

5.563 2.182 1.947 470 55 42 25 13 2
supporting activities

Post and delivery 396 174 137 20 9 7 5 6

(Source: Statistic Yearbook 2017)

It can be clearly seen that logistics service companies with less than 5 employees account for
up to 38.83%, enterprises with less than 50 employees account for more than 94%. Very few
enterprises (about 0.5%) have the size of 500 employees or more.

(Source: VLI compiled from MPI 2017)

Whitebook 2018 173

 2. Distribution of logistics service providers in Vietnam
According to the National Database on Enterprise Registration, up to the end of March 2018, the
entire country has 296,499 registered businesses in the fields related to logistics, concentrated
mainly in the area having the system of ports and roads favorable: the Red River Delta (38.8%),
followed by the South East (33.8%), the North Central and the Central Coast (14.2%), in the
Northern central and mountainous areas (5.6%), the Mekong River Delta (5.2%) and the Central
Highlands (2.4%), in the South with more than 60% out of which up to 54% of businesses
concentrate in Ho Chi Minh City.

Based on the VLA/VLI survey conducted in August 2018, as described in this section
and section 5.8 below, as well as the actual situation of the current service market, and
the statistics on the number of businesses in accordance with Decision No. 10/2017/
QD-TTg which was replaced by the Prime Minister’s Decision No.27/2018/QD-
TTg of July 6, 2018, promulgating the System of Vietnamese Economic Sectors, the
VLA calculated the number of international and domestic logistics service providers in
Vietnam in 2018 is about 4,000.

VIII. TYPES OF LOGISTICS SERVICE ACTIVITIES IN VIETNAM TODAY

1. General information
Over a period of more than three months, the VLA/VLI team conducted a survey of 166 logistics
companies (148 LSPs and 18 logistics customers) by questionnaire and 10 logistics customers
by direct interviews. It is considered as the ideal number of samples for the survey, ensuring the
survey results in an objective manner and reflecting the actual situation of the actual operation.
Companies under the survey from the Ho Chi Minh City area accounted for 48.6%. At the
second place, Ha Noi enterprises accounted for 25.7%, the rest were from the provinces of Da
Nang, Binh Duong, Dong Nai and Ba Ria - Vung Tau, accounting for 5% each. There are many
industrial parks and export processing zones, the import and export of raw materials and goods
in this area and it is also the area chosen to carry out distribution activities for the neighboring
areas.

DISTRIBUTION OF AREAS HAVING HEAD OFFICES OF THE LOGISTICS

SERVICE ENTERPRISES UNDER THE SURVEY

1.4 HCMC
6.9
3.5
Ha Noi
4.9
4.2 Da Nang

4.9 Hai Phong

48.6
Binh Duong
25.7 Ba Ria-Vung Tau
Dong Nai
Others

(Source: VLA/VLI Survey in 8/2018)

174 Whitebook 2018

2. The type of businesses under the survey
Of the surveyed logistics services providers (LSPs), more than half were joint stock companies
(52.4%); limited companies accounted for 32.7% and joint ventures accounted for 8,8%; the
other type companies accounted for less than 7%, including foreign companies (4.1%), State
owned enterprises (1.4%) and private enterprises (0.7%).

Company Limited

8.8 State-owned company

4.1
0.7
32.7 Joint stock company

Private company
1.4
52.4 Joint venture company

Foreign company
(100% capital)

3. Main areas of logistics activities

Of the surveyed enterprises, the business sector accounted for the highest proportion of 52% and
almost the same was the logistics enterprises (26.9%) and freight forwarding (25.1%). This shows
that the research team had focused on the enterprises providing main logistics services including
freight forwarding services in order to obtain the right results, reflecting the business situation and
supply of services in the market today. Group of companies providing services for road transport,
warehouse management and distribution, and shipping services consists of a total proportion of
nearly 30% and rangeing from 8-11%. The third group includes companies operating in the field of
air freight, rail, direct delivery, express delivery and ICD accounting for a share of less than 9% and
the remaining 5.5% are other businesses such as port services, oil and gas services and customs
brokerage services.

Warehousing services are geared towards retailers and imports and exports. In terms of
warehousing and storage services, in addition to CFS and ICD, they can be divided into four
main categories, serving different customer groups, including common warehouses, bonded
warehouses and distribution centers (DC) and cold storage. According to StockPlus, the total area
of the distribution centers is about 3,000,000 m2. For the cold storage system, the total capacity
is 450,000 pallets and 155 bonded warehouses.

Cold storage service is a potential business because Vietnam is an agricultural country and there
are many products in cold chain, fresh and live without adequate services. There are currently 20

Whitebook 2018 175

 professionally managed cold storage systems in the South, 40-50 in the North and many small
and odd warehouses owned by manufacturing companies. Warehousing services have a fast
growth rate, high profit ratio in the logistics service chain.

More than 70% of the warehouse areas are located in the South. Major storage service companies
include:
• In the South: Saigon New Port, Mapletree, Sotrans, Gemadept, Vinafco, DHL, Thang Long,
Phuc Long Port, YCH-Protrade, Damco, Transimex, Indo-Trans and Draco…
• In the North: Vinafco, Saigon New Port, Mapletree, Draco and Indo-trans...
Saigon New Port possesses a total area of 675,000 m2 of warehouses, including CFS warehouses,
bonded warehouses, general goods warehouses and distribution centers. Saigon New Port is the
largest warehousing and storage service providers in the country, including the Tan Cang Song
Than hub with the area of 205,000m2 and the Long Binh New Port hub having a warehousing
area of 156,000 m2.

CHART OF PRESENT MAIN WAREHOUSES AND STORAGE

(Source: StockPlus)

Annual revenues
The average annual revenue from the supply of logistic services by the enterprises under survey
is highest for the group of over VND10 billion to VND100 billion, which accounts for 40.6%.
This is the lowest revenue group in the survey. This shows that the turnover of logistics service
providers is not high due to many subjective and objective causes such as limited and non-
diversified services, low value added services and the low quality of services. Secondly, the
revenue group does not exceed VND10 billion and over VND100 billion to VND300 billion,
accounting for 18.2% and 16.8%, respectively. The enterprises with revenue from more than
VND500 billion to VND1,000 billion took the third position with the proportion of 11.9% and
finally the revenue group from more than VND300 billion to VND500 billion and over VND
1,000 billion accounts for less than 10%.

4. Logistics human resources

Logistic manpower contributes an important part in enhancing the competitiveness of Vietnamese

176 Whitebook 2018

MAIN ACTIVITIES OF LOGISTICS SERVICE PROVIDERS

(Source: VLA/VLI Survey in 8/2018)

logistics service provider. However, for many reasons, this factor is limited by the size in terms
of quantity and quality of human resources which could not meet the demand of the market.
Among surveyed enterprises, 29.1% of enterprises have a workforce of 11-50 people. Ranked at
second place is a group of enterprises with the scale of labor from 201-500 people, accounting
for 19.6%, while the group of enterprises with the scale of 51-100 and 101-200 accounts
for the proportion of approximately equal at 14.2% and 16.2% respectively. The low group of
enterprises, including large enterprises with more than 500 employees, accounts for 12.2% and
small and medium sized private companies with less than 10 employees account for 8.8%.

5. Evaluation of logistics human resourcs situation

On the professional level and skills of the staff, the survey found that over 45% of the staff had
professional qualifications and work experience is assessed at a good level. Therefore, we can
see that the manpower quality could ensure the professional and business experience of logistics
service companies in Vietnam, but there are still
HUMAN RESOURCES OF LOGISTICS ENTERPRISES
many limitations in recruiting high-quality logistics
human resources. The survey of IT literacy and
foreign language ability showed that only about
29% of the employees are well appreciated and Not more than 10
over 41% is rated as good, which leads to the 12.2 8.8

ability to work in the international environment. 11 - 50

Laborers ware rated at a rather good level of 19.6 29.1

51 - 100
29.5% and a good level of 33.6%. Soft skills in
the logistics service industry include a wide range 16.2
101 - 200

of skills such as negotiating contracts, preparing 14.2

201 – 500
documents, teamwork ability and problem
solving, etc. It was found that the rate was rather More than 500

good and good almost similarly and accounted

(Source: VLA/VLI Survey in 8/2018)

Whitebook 2018 177

 for about 38%. However, the demand for recruiting more staff in the next 5 years by enterprises
is not much. The demand for recruiting more from 11-50 people accounts for 44.5% so on
average every year most companies want to recruit more 10 people, the recruitment of not more
than 10 people in 5 years accounts for 26.4%, meaning that each year to recruit not more than
2 persons. Only 16.9% of surveyed enterprises have recruitment needs of 51-100 people in the
next five years, ie recruiting more than 10 people per year. The number of enterprises with the
demand of recruiting more than 100 people and over 200 people in 5 years occupies a modest
percentage of 5%.

DEMAND FOR LOGISTICS SERVICE HUMAN RESOURCE IN THE NEXT 5 YEARS

6.1 5.4

26.5
Not more than 10
17.0
11 - 50
51 - 100
101 - 200
44.9
More than 200

(Source: VLA/VLI Survey in 8/2018)

IX. STATUS OF LOGISTICS SERVICE SUPPLY

1. Logistics services are being provided
According to the survey results, the demand forecasting and import/export services provided by
logistics enterprises are the two services accounting for the highest proportion of 90%. Over 80%
of the supplied services are customs brokerage, raw materials procurement, freight forwarding
and domestic transport (78.2%), cargo handling (70.1%) and international transport (67.3%),
insurance brokerage (40.8%). It can be seen that these are basic and traditional logistics services,
accounting for a relatively high proportion. Services related to warehousing and distribution
activities range from about 25% to over 50%, packaging (59.9%), warehousing (53.7%), orders
processing (44.9%), labeling (37.4%), bonded warehouse (34%), distribution (28%) and inventory
management (24.5%). Then, it is easily seen that Vietnamese logistics service providers
are currently providing the services, 3/4 of which are services related to transportation,
warehousing, loading and unloading and customs brokerage. These are considered the
basic activity of 3PL. Supply chain management services, cross docking services and e-commerce
services accounted for a modest proportion of less than 20%, even the reverse logistics and
management of information systems accounting for less than 10%, not being in a position to
meet the demand as well as the expectation of the local potential logistics market.

2. Serving markets and market expansion plans

According to the survey, the domestic service market of logistics service providers is currently
concentrated in Ho Chi Minh City with 87.4% of respondents currently serving customers and
the North (72.7%). These are the two most dynamic economic markets in the country where
many manufacturers are operating and the value of imports and exports accounts for a high
proportion in the country.

178 Whitebook 2018

 MARKETS UNDER THE SERVICES OF LOGISTICS SERVICE PROVIDERS - DOMESTIC MARKETS

HCMC 87.4

Northern region 72.7

Central region 50.3

South Eastern region 50.3

South Western region 37.8

Nationwide 1.4

0% 20% 40% 60% 80% 100%

Source: VLA/VLI Survey 8/2018

For the international markets, approximately 75% of logistics enterprises are providing logistics services
to customers in South East Asia and China. The Japanese market accounts for 69.2% while the
number of enterprises serving customers with exports to Korea and Europe reaches 56.4% and 51.9%,
respectively. The US market accounts for 50.4%. The African markets take 20.3% and a number of
other markets accounts for less than 5%. This is true of the situation of Vietnam’s exports in the current
period.

MARKETS UNDER THE SERVICES BY LOGISTICS SERVICE PROVIDERS -

In the opposite direction, for the import IMPORT MARKETS
market, 81.5% of enterprises currently
provide logistics services for goods imported China 81.5
from China, from South East Asia 73.1%,
South Korea 71, 5%, Japan 70%, Europe and South East Asia 73.1

the United States fluctuated in over 50%, the Korea 71.5

African market 14.6%, and other markets Japan 70.0
4.6%. This rate is in line with Vietnam’s
current import turnover. Europe 58.5

U.S.A 51.5
It can be said that in the international market, Africa 14.6
import and export activities are concentrated
in important markets of Vietnam such as Others 4.6

China, Southeast Asia, Korea, Japan, Europe All markets 1.5

and the United States.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Source: VLA/VLI Survey 8/2018

Whitebook 2018 179

MARKETS UNDER THE SERVICES OF LOGISTICS SERVICE PROVIDERS - EXPORT MARKETS

South East Asia 75.9

China 74.4

Japan 69.2

Korea 56.4

Europe 51.9

U.S.A 50.4

Africa 20.3

Others 3.8

All markets 1.5

0% 10% 20% 30% 40% 50% 60% 70% 80%

Source: VLA/VLI Survey 8/2018

3. IT application
According to the VLA/VLI survey, over 30% of IT applications currently being used in logistics
service businesses are the basic applications such as for tracking and tracing, management system
of warehouse and storage, electronic data exchange and transport management. IT is most
applied for the customs declaration of 75.2% to 100%.

180 Whitebook 2018

 IT APPLICATION AND PLANS BY LOGISTICS SERVICE PROVIDER
Smart logistics 6.1 29.7 64.2
Green logistics 5.4 27.0 67.6
E-logistics 10.8 27.0 62.2
E-commerce 15.5 23.6 60.8
Cloud logistics 10.8 23.6 65.5
Tracking & Tracing 38.5 14.9 46.6
Forwarding management system 41.9 14.9 43.2
Order management 16.9 20.3 62.8
Human resource management 26.4 20.9 52.7
WMS (Warehousing Management System) 34.5 20.3 45.3
EDI (Electronic Data Interchange) 31.8 14.9 53.4
TMS (Transport Management System) 37.6 22.1 40.3
Customs declaration 75.2 5.4 19.5
Barcode scanning 27.0 24.3 48.6
RFID 4.7 18.9 76.4
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
My company is implementing Expect to have in the future
Have no demand for now and in the future

Source: VLA/VLI Survey 8/2018

4. Logistics cost components

More than 40% of respondents said EFFECTS OF ELEMENTS CAUSING A RISE IN LOGISTICS SERVICE COSTS
that international transportation costs 60% 53.2
(41.3%), administrative paperwork 46.3
50%
(53.2%), petrol price (42.6%), traffic 41.3 42.6 42.4
39.9 40.0
37.4
congestion (42.4%), non-integrated 40%
31.2 33.1 35.3
34.5 32.1
29.8
logistics infrastructure (46.3%) and 30% 26.8
23.7 25.0
22.7
technology application (40%) have a 21.6 20.9 19.9
18.1 15.8 18.0
20% 13.813.0 16.5 14.3
significant impact on logistics costs. 12.2 11.4
6.5 7.4 6.5 6.5 7.2 7.9
The price of gasoline is a heavy 10% 5.1
2.2 3.5
1.4 0.7 1.5
4.3 4.3 2.1
influence by 29.8%, while other 0%
factors with the similar impact are
under 25%.

The level of cooperation of the

shippers not only in signing contracts,
coordinating and supporting logistics
enterprises to complete their services,
but also in the process of resolving
No effect A little effect Average Serious effect Very serious effect
incidents is another factor leading to
an increase in logistics costs. (Source: VLA/VLI Survey 8/2018)

Whitebook 2018 181

 5. Difficulties encountered by providers in logistics service supply

High cost 62,6

Restricted human resource 60,5

Unsuitable policy 56,5

Complex document procedure 51,7

Lack of experience in supply chain… 41,5

IT system does not meet requirement 29,9

Lack of facility/ infrastructure 25,2

Lack of capital 17,0

Others 2,0

0% 10% 20% 30% 40% 50% 60% 70%

(Source; VLA/VLI Survey 8/2018)

6. Assessing the quality of logistics services provided by service providers

Human resources
With the evaluation of the logistics service providers by service customers for the service supply
on a 1-5 scale - from Very Poor to Good, none of the businesses rated logistics service providers
at very poor marks. Over 65% of the results obtained on the evaluation of the staff of the logistics
service providers were quite good. Evaluation on the cooperation and enthusiasm of logistics
staff when performing the requirements of the customers was at a good rate of over 75%.

PROFESSIONAL ASSESSMENT (LEFT) AND COOPERATION AND ENTHUSIASM OF LOGISTICS STAFF

WHEN EXECUTING REQUIREMENTS (RIGHT).

Very bad 5,4 Very bad

16,20,0
2,7
Bad 27,0 18,9 Bad
29,7
Average Average
Fair Fair
51,4 48,6
Good Good

(Source: VLA/VLI Survey 8/2018)

182 Whitebook 2018

ASSESSING HUMAN RESOURCES OF LOGISTICS SERVICE PROVIDERS

5
3,92 3,84 3,86
4 3,68

0
Ability of Financial Ability of Ability of
logistics capability logistics logistics
company to of logistics company to company to
provide company link provide all-
facility information in service

(Source: VLA/VLI Survey 8/2018)

ASSESSING MANAGEMENT CAPACITY

Working ability of managent team of logistics company

5
4
3
Ability to manage 2 Ability to solve
service provision unexpected situations
1
0

Collaboration among
Ability to control related departments in
logistics cost logistics company

Whitebook 2018 183

 ASSESSING SERVICE OPERATION (5-POINT SCALE)

Ontime consultancy when needed 4,03

Service quality as guaranteed 4,03

Low level of cargo shortage and damage 3,97

Quick service implemention 3,97

Precise and ontime documents 3,95

Reliability and stability of services 3,95

Good customer supporting services 3,92

Good policy for VIP customers 3,84

Ability to provide door-to-door service 3,84

Solving claims of customers 3,81

Quick and ontime service provision even in peak… 3,81

Quick and flexible reaction to meet customers'… 3,78

Proactive in providing ontime and suitable solutions 3,76

Tracing and tracking 3,76

Precise shipping schedule 3,73

Ability of quick cargo clearance 3,70

Competitive service price 3,68

Reasonable prices for service quality 3,65

Non-stop seeking solutions to reduce costs 3,62

Ability to provide logistics value-added services 3,62

0 1 2 3 4 5

(Source: VLA/VLI Survey 8/2018)

When asked to evaluate the service performance of logistics service providers in terms of 20
criteria on a scale of 1 to 5, the feedback showed that all criteria were rated above average (point
3). In particular, 02 criteria were evaluated over a good level: timely advices when needed and
quality of service commitments. The rate of losses of and damages to the goods was low. The
fast work fulfilment time, accuracy and timeliness of documents, reliability and stability of the
services, and customer support services which were rated at a near good level.

184 Whitebook 2018

Photo: Nguyen Minh Tan Whitebook 2018 185
 CHAPTER VII:
RECOMMENDATIONS TO REDUCE LOGISTICS COSTS,
ENHANCE COMPETITIVENESS AND DEVELOP VIETNAM’S
LOGISTICS SERVICE INDUSTRY IN THE TIME TO COME

Vietnam’s logistics service industry has been identified by the 12th Party Congress as a "high
added value service industry" and has to "modernize and expand" logistics services. The logistics
service industry has made positive changes after the Prime Minister's Decision 200/QD-TTg
dated February 14, 2017 on “Approving the Action Plan on Enhancement of Competitiveness and
Development of Vietnam’s Logistics Services to 2025 ". Ministries, sectors and localities, logistics
service providers and VLA have plans to implement Decision 200 and got initial encouraging
results. Many conferences and seminars, especially the "National Conference on Logistics - Cost
Reduction Solutions, Effective Connection of Transport Infrastructure System," on 16/04/2018,
in Ha Noi chaired by Prime Minister Nguyen Xuan Phuc showed the determination of the
Party and State of Vietnam in developing our logistics service industry. According to the World
Bank's LPI 2018, Vietnam has raised 25 steps to the 39th rank out of 160 countries surveyed,
compared with rank 64 in 2016.

Continuing the strong development of the logistics service industry in the world and Vietnam in
2017, expected in 2018 and the next year, Vietnam’s logistics service industry will continue to
develop, but in the condition of many changes on politics and economics of the world that will
affect the development of the logistics service industry in the world in general and of Vietnam in
particular.
1. That is the "trade war" which is booming and exerting impacts strongly to many countries
and to businesses. Noticeably, between the United States and China, United States and its
Unions (EU), The West Union and Russia and United States and Iran... in a wide range in the

186 Whitebook 2018

 fields of commerce, monetary and science & technology, apart from political ends, and the
outlooks, are unpredictable. The issue raised is to understand the nature, causes, effects and
responses of each and every sector, including logistics. They have strong impacts on global
trade, making the world's GDP decline, currency market turmoil, price hikes, and soaring oil
prices which lead to the world's restructuring of its partners and markets, and multilateral
institutions likely to be adjusted. This situation will directly affect the development of economy
and trade of Vietnam, thus directly affecting the logistics service industry. Therefore, logistics
service providers have to take appropriate measures to ensure that the business is not passive
and continues to develop.
2. Fuel prices will increase, which in turn will raise transportation costs (According to VATA
Report 10/2018, fuel cost accounts for about 40% of trucking costs), a major factor in the
cost of logistics services, directly affecting the increase in logistics costs.
3. The Industrial Revolution 4.0 has a strong impact on the logistics service industry. New
logistics technologies will affect the logistics business model of logistics service providers, in a
scientific and innovative way.
4. The problem of high-quality logistics human resources in the context of applying new
technologies in the logistics service industry places Vietnamese logistics service providers,
mainly small and medium enterprises, an urgent requirement to solve if they wish to improve
the quality of competitive service delivery, labor productivity and reducing logistics costs.
5. ASEAN Member Countries signed the 10th Package of Commitments on the implementation
of the ASEAN Framework Agreement on Trade in Services (AFAS) (on 29 August 2015 in
Singapore), along with this logistics services in ASEAN shall be more liberalized. The China-
Singapore Connectivity Initiative (CCI) Southern Transport Corridor linking with ASEAN
and Europe by road, sea and rail will promote regional logistics development and increase
competitiveness to Vietnam.

In that context, with the function of a professional association, representing the logistics service
enterprises in Vietnam, based on the Decision 200, the Vietnam Logistics Business Association
wishes to offer recommendations in the short term, medium to long term until 2030 in order
to reduce logistics costs, improve competitiveness and develop the logistics service industry
of Vietnam, contributing to the development and enhancement of competitiveness of the
Vietnamese economy in the cause of the industrialization and modernization of the country, and
the period of international integration as well as making a contribution part to GDP. These are
orientation recommendations and the Association will make specific proposals when it comes
to implementation.

1. TO DEVELOP VIETNAM INTO A REGIONAL LOGISTICS SERVICE HUB IN

ASEAN BY 2025
Vietnam has geopolitical advantages, located on the world's most important maritime route,
which accounts for about 85% of East-West freight movements, connecting mainland China with
ASEAN countries. Imports and exports of Vietnam are mainly transported by sea. Vietnam has
a network of roads, airways and railways linking with countries in the GMS region, ASEAN and
Europe. The economy is growing at a high GDP rate of 6.81% in 2017. According to the Import-
Export Agency of the Ministry of Industry and Trade, by October 2018, Vietnam has signed
and is negotiating (05) 17 new FTAs, including 10 FTAs in operation. Of the 17 FTAs, there
are two vital FTAs, the Comprehensive and Progress Trans-Pacific Partnership (CPTPP) and the
European Union-Vietnam Free Trade Agreement (EVFTA) with the maximum tariff reductions
that will strongly promote importation and exportation, production and investment, thereby
creating a premise both in terms of goods and transport infrastructure, and rapid development
of the logistics service industry. Currently, according to World Bank's LPI, Vietnam ranks third in
ASEAN Member Countries (after Singapore and Thailand) and second in GMS, after Thailand.

Whitebook 2018 187

 Therefore, with the high political will, Vietnam could become a regional logistics hub of ASEAN
by 2025.

II. IN ORDER TO CARRY OUT THIS TASK, VIETNAM NEEDS TO DEVELOP A

LOGISTICS DEVELOPMENT STRATEGY UP TO 2030
With comprehensive and concrete objectives and action plans in four areas of the Vietnamese
logistics system, based on the Action Plan under Decision 200/QD-TTg dated 14/02/2017.
Currently, Vietnam has not had a strategy for logistics development, thus limiting the sustainable
development of logistics services in the period of deepen international integration. Many countries
in the region have successfully developed and implemented their logistics development strategy,
thus helping to develop rapidly the logistics industry of these countries.

III. STRENGTHENING THE MANAGEMENT INSTITUTION OF THE LOGISTICS

SERVICE INDUSTRY
Basically, the legal system of our country related to logistics is relatively complete. It is necessary
to ensure transparency, equality and consistency from the central to local levels during the
implementation process, facilitating the operation of the logistics business.

Apart from the logistics service management institution, the Government should pay attention
to developing a common consistency. The National Committee 1899 is strongly recommended
to undertake the function of control and co-ordiation of logistics acitivities in order to effectively
facilitate trade. The National Single Window should be promoted in order to involve the full
participation of different Ministries and sectors towards the maximum commercial facilitation of
enterprises and the logistics service industry. We recommend that the Government considers
specific policies to encourage logistics service providers in applying high-technologies; the
Government considers policies to reserve land for planning logistics infrastructure development,
avoiding converting agricultural land into real estate to narrow the operational space of the
logistics infrastructure. As one of the four key pillars of the logistics system, institutions should
aim to have pioneering policies that have the vision to create a competitive advantage in attracting
foreign investment such as the Free Trade Zone, Open Economic Zone in major logistics centers

188 Whitebook 2018

of the country such as Ho Chi Minh City, Ha Noi, Da Nang. The development of logistics
infrastructure and high-quality logistics services in three planed Special Economic Zones should
be given high priority.

IV. CONTINUING INVESTMENT IN THE DEVELOPMENT OF THE LOGISTICS

INFRASTRUCTURE, FOCUSING ON INLAND WATERWAYS AND RAILWAYS,
THEREBY PROMOTING THE CONNECTION BETWEEN MODES OF TRANSPORT
Transport infrastructure plays a crucial role in developing logistics services in our country. At
present, the transport infrastructure initially meets the current requirements of the logistics service
sector with the network of seaports, roads and air transport network being built and be built,
noticeably, the deep seaports of Cai Mep - Thi Vai and Lach Huyen and nearly 1,000km of
expressways. In addition to further improving the seaport system of 6 port areas, the construction
of Long Thanh airport, the North-South expressway and the Ha Noi-Vientiane expressway v.v.,
the development of the North-South railway high speed and the inland waterways, particularly
in the Red River and Mekong Delta areas, play an important role in the development of logistics
services in Vietnam at present and in the period of 2025-2030.

The inland waterways are an important transport infrastructure that has contributed greatly to the
economic development of Vietnam over the long history. Vietnam currently has 2,360 rivers and
canals with a total length of about 41,900 km, an average density of 0.27 km/1 km2, 124 river
mouths, one of the countries having a large river density in the world.

In the context of growing container movements in Vietnam and overloading of road transportation,
container transport and transshipment by inland waterways is one of the best transport solutions
in terms of connectivity with the main national ports such as Ho Chi Minh City ports, Cai Mep -
Thi Vai port cluster and Hai Phong - Lach Huyen port cluster. Deployment of empty containers to
production regions by inland waterways salso plays an important role. Therefore, the Government
should take the initiative in developing an Action Plan for the development of the waterways
transport in the whole country, combining inland waterways transport and shipping, utilizing the
capabilities of inland shipping lines and incorporating international shipping lines. Current market
share of inland waterways transport of about 17.5% should be raised to around 35% by 2025.

Vietnam Railway has a total length of 3,143km of which 2,531km of mainline. Technical
standards and railway infrastructure in our country remains low and backward due to in the long
time it has not been paid attention to investment development properly. Rail transport safety is at
stake. Freight transport by rail only accounts for 0.59% of domestic transport (2015). In the plan
to improve the transport structure, the Ministry of Transport is expected to increase to 4.34%
by 2020. International freights mainly travel from and to China, are transported on the freight
corridors such as the 1000mm-railway corridor: Kunming - Son Yeu (China) - Lao Cai (Vietnam)
- Hai Phong; The 1435mm-railway freight corridor transports goods mainly from China through
Pingxiang (China) - Dong Dang (Vietnam) border gate to Yen Vien station. Vietnam should
develop well the international railways. The journey of container liner trains from Vietnam to
Moscow on the journey, expected time will be from 18-20 days, if going by sea it will take from
40-45 days. This is a great advantage of trans-rail transport in Vietnam - Asia - Europe.

Therefore, the development of railway infrastructure is an urgent need today. First of all, Vietnam
should agree with China about a rail link point, and build about 7 km (missing link) connecting
Lao Cai railway with Kunming railway. The development of high-speed North-South railways
not only promotes domestic logistics services but also international logistics. In addition, it is
necessary to develop the railway linking with international gateway ports such as Cai Mep - Thi
Vai and Lach Huyen, develop Sai Gon - Loc Ninh railway linking with Cambodian railway in
the next stage. Railway development will strongly promote multi-modal transportation - the
backbone of logistics activities, boosting economic development in southern and central Vietnam

Whitebook 2018 189

 when linked to Lach Huyen and Cai Mep - Thi Vai international seaport gateways. The State
needs to concentrate resources and capital to implement the plan from now to 2025 and 2030.
Railway development has both economic and political implications for Vietnam.

The connection between modes of transport is expressed in logistics centers. Departments and
localities should conduct research in order to expedite the details of Decision No.1012 in order
to determine the positions, models, technology and main service subjects of the Logistics Centers.
Besides logistics center planning, it is necessary to parallelize the planning of production and
distribution areas located in favorable locations connected and synchronous with the logistics
centers, seaports and airports.

To study the organizational models of logistics centers (with different names such as Logistics
Cluster, Logistics Hub, Logistics Village, GVZ, ...) of developed countries in Europe such as
Germany, Netherlands, Belgium; Strategic positioning with attention paid to multi-modes (road-
waterway and railroad) connectivity based on Public Private Partnership (PPP) to maximize the
efficiency of logistics clusters in order to facilitate small and medium enterprises to participate
in logistics value chain. The appropriate organizational model, on the basis of public-private
partnerships, with adequate participation of stakeholders in the logistics value chain is a prerequisite
for the development of open and highly digitized technology where stakeholders can share data
to make logistics operations more transparent, through and more efficient.

V. FOCUSING ON LOGISTICS DEVELOPMENT IN THE MEKONG DELTA

Presently, the Mekong River Delta accounts for 70% of the country's agricultural products and
marine products. Aquaculture plays a very important role in Vietnam's export turnover. However,
this area mainly relies on waterways transport, and sea shipping is limited because there is no
deep-water ports, large tonnage ships cannot be accessible for direct exports. Exports mainly
find their way through the ports of Ho Chi Minh City and Cai Mep - Thi Vai by road, increasing
logistics costs. For example, one ton of rice costs an additional about USD10.

Therefore, development of logistics services is an urgent requirement for the economic

development in the Mekong Delta. In the immediate future, we should focus on the development
of logistics services hubs, river transport and especially cold chain storage, and in the near future
by railway. Currently, Japanese and Korean investors are interested in investing in cold warehouses
and hi-tech items in this area. The State should have policies to encourage investment, such
as construction land priority, tax policy and improvement of investment procedures, customs
procedures for the Mekong Delta.

To strongly develop inland waterways of the Mekong River delta area connected with Ho Chi
Minh City and Ba Ria-Vung Tau. Linking container transshipment between logistic centers in the
Mekong Delta - Ho Chi Minh City and Cai Mep - Thi Vai port. To change the habits of buying
CPT Can Tho terms and selling FCA Can Tho terms instead of buying CPT Ho Chi Minh City and
selling CFA Ho Chi Minh City. At the same time, a High-quality Human Resource Development
Strategy for the Mekong Delta region should be worked out for the supply chain management
and logistics services.

VI. INVESTMENT IN HIGH-TECH SCIENCE APPLICATION IN THE LOGISTICS

SERVICE INDUSTRY
The logistics service industry is a high international industry and rapid application of scientific
and technological progress in logistics activities in the past, such as cargo transport and handling
technology, especially containerized cargoes. Currently, the developed countries is gradually
implementing e-logistics, green logistics, e-documents ... and application of cloud computing
technology, and block chain technology ... In the context of the industrial revolution 4.0, people

190 Whitebook 2018

have begun applying artificial intelligence or robots to perform some logistics services, such as
container stuffing and un-stuffing, cargo handling in warehouses and open storage.

The application of high-tech science to logistics services along with the development of high-
quality human resources is one of the factors contributing to the reduction of the cost of logistics
services in Vietnam and improvement of labour productivity and increase in the quality of service
supply.

Currently, the service providers in our country apply information technology in their day-to-day
work is at low level, mainly using EDI, ERP, GPS, WMS, Internet ... The main reason is that they
are small and medium enterprises having limited capital and lack of specialized human resources
in terms of information and technology, although 96% of recently surveyed enterprises believe
that technology is a distinct factor to create favorable conditions for enterprises’ competitiveness.

VLA is currently researching high technology applications such as Block Chain for a number of
logistics activities; carrying out study on mass application of e-DO (Electronic Delivery Order) for
LCL shipments and involving in the e-B/L project of FIATA. Saigon New Port is implementing
e-Port, e-DO testing with several shipping lines. But compared with the requirements, the Vietnam
logistic service industry still lags far behind the world on the application of high technology.

To enable the logistics service industry in Vietnam to apply high-tech science effectively, catch
up with the international logistics level and "to strengthen the application of modern science
and technology in the trend of forming a logistics service industry in the Industrial Revolution
4.0 ", the State should have a policy to support a part of investment capital for logistic service
providers and policies to encourage high technology enterprises to offer the form of leasing
to businesses enabling them not to spend big initial investments for technology; to perfect
the NSW and ASW system with the active participation of the Ministries and branches, thus
facilitating enterprises in completing the procedures for import and export of goods; building and
developing e-government towards digital government and digital economy, the core of providing
high quality online public services for people and businesses. The State adopts preferential policies
for encouraging high-tech application by logistics service providers suited to Vietnam's specific
conditions and requirements, and for technology companies’ application researches serving the
logistics service industry.

To consider assigning a government focal point such as the Ministry of Industry and Trade, or the
Ministry of Transport or the Ministry of Science and Technology , and or the Vietnam Logistics
Business Association to study and deploy logistics technology platform to serve effectively the
exchange of data between stakeholders, including governmental agencies, shipping companies,
logistics service providers and for the process of digitalization on the nation-wide scope.

VII. ACCELERATING TRAININGS AND DEVELOPMENT OF HIGH-QUALITY

LOGISTICS HUMAN RESOURCES, THE KEY TO THE SUCCESS OF VIETNAM'S
LOGISTICS SERVICE INDUSTRY
With the transnational work characteristics in a competitive market for services and demand for
human resources in the context of the Indutry Revolution 4.0, the Vietnam service sector requires
substantial high-quality human resources in both practical skills, professional knowledge and
English language skills in logistics. However, the human resources of the industry are presently

Whitebook 2018 191

 still weak and lack in quantity and quality. According to the VLA survey in 2016, only human
resources for logistics service providers from now to 2030 will need new training of about
250,000 personnel.

People need training can be divided into groups: Managers involved in policy planning and direct
management of logistics; leading managers of enterprises; staffs at the office, and field staffs. High
quality logistic personnel must be trained not only to meet domestic requirements but also to
work abroad, especially in the ASEAN Economic Community.

Training programs will base on FIATA's international training programs, consisting of 14

modules, combined with the AFFA-ASEAN programs, Au4Skills (Australia-Vietnam) vocational
training program, beside an English training program specializing in logistics. Training methods,
in addition to on-site training by businesses and E-learning, we should focus on trainings by
universitties and vocational secondary schools, trainings at the classroom combined with practical
trainings, introducing high-tech science of logistics in training at universities. This way of training
is in line with the requirements of the Industry Rrevolution 4.0.

To this end, VLA has so far signed up for training cooperation with 12 universities and institutes.
In addition, VLA also signed a collective cooperation agreement between 11 training schools and
18 logistics enterprises to exchange the training requirements, the number of human resources
required and linkage theoretical education and practical training at work of enterprises.

In order to create favorable conditions for the universities to carry out training in logistics, VLA
propose that the Ministry of Education and Training should have the own training code for
logistics education and training, which is not common to the industry management code, as
prescribed in the Ministry of Education and Training. Circular No. 24/2017/ TT-BGDDT, dated

192 Whitebook 2018

10/10/2017, effective on 25/11/2017, promulgating the list of education and training level IV
of the university degree and Circular No. 25/2017 / TT-BGDDT dated 10/10/2017, effective
on 25/11/2017, issued the list of education and training, level IV- masters and doctors.

VLA also recommends that the Government annually review funds for higher education earmaked
for the logistics service industry so that universities can implement these programs. There must
be effective coordination between the Ministry of Education and Training and VLA in this kind
of training.

Singapore's experience in developing the world's leading logistics services is focused on training
high-quality human resources. In 2016, the Singaporean government invested USD 4.5 billion
in 15 years for building logistics capacity. Bearing in mind of this experience, VLA proposes
that the Ministry of Planning and Investment who is managing the funds to support small and
medium enterprises in vocational training to allocate a certain amount of funding for VLA in
annual vocational training.

To conduct researches on the national logistics network model (eg. Vietnam Logistics Network),
gathering universities, institutes, research institutes, logistics service providers, researchers in order
to establish portals and libraries of logistics knowledge as a source of knowledge for the masses
easily assess.

VIII. STRENGTHENING THE INTERNATIONAL COOPERATION

In the period of deepening economic integration, international cooperation plays an important role
in developing and enhancing the competitiveness of Vietnam logistics service industry. Through
international cooperation, Vietnam can take advantage of investment capital into the logistics
service industry and expand the scale of business activities, learning management experience,
training high-quality human resources and transfer of technologies in the context of the Industrial
Revolution 4.0. At present, VLA has close cooperation with international logistics and freight
forwarding organizations such as International Federation of Freight Forwarders (FIATA), ASEAN
Freight Forwarders Association (AFFA) and other International organizations as UNESCAP.
Vietnam logistics service enterprises have cooperative relationships with most major markets in
the world.

The Ministry of Industry and Trade, the Ministry of Planning and Investment, the Ministry of Transport
and the Ministry of Foreign Affairs, etc. are requested to assist VLA and enterprises in providing market
information, especially on the regulations and legislation related to logistics; assisting delegations of
enterprises to visit and learn the reality of logistics services, especially the management and operations
of seaports, warehouses and multi-modal transportation in the developed countries; introducing major
global partners; assisting in establishment of representative offices or setting up commercial presence
in the host country; connecting the organization of international events in Vietnam.

Strengthening linkages between VLA and logistics service providers and their counteparts in ASEAN
and the World as well and attracting foreign enterprises to invest in developing logistics services in
Vietnam.

Whitebook 2018 193

 CONCLUSION

O ver 25 years of building and growth, up to now, the Vietnam Logistics Business Association (VLA)
with nearly 400 members, is representing well worth the large number of enterprisers in the Vietnam
logistics services industry, domestically and internationally.

Logistics is playing an increasingly important role in the world economy and in every country as well as
in everyday life. The World Bank's 2010 LPI Report indicated that, “For countries at the same level of
per capita income, those with the best logistics performance experience additional growth of 1 percent
in GDP and 2 percent in trade”. Reduction of logistics costs by 1%, would increase world revenues by
USD40 billion (OECD Report 2009). With the cross-border e-commerce development, e-logistics is
growing rapidly serving directly to the daily requirements of every citizen. The Industrial Revolution 4.0,
with its breakthroughs in the field of artificial intelligence, integrates artificial intelligence with the Internet
(IoT) network and modernization tools are starting to change the whole perspective of the global logistics
sector. The logistics market is forecast to grow at an average annual rate of 6.54% in the period of 2017-
2020 and to reach USD15.5 trillion by 2024.

According to the WB LPI Report 2018, Vietnam is ranked at 39/160 countries in terms of logistics
operation and ranking the 3rd in ASEAN after Singapore and Thailand. Although there are much potential,
so far the competitiveness of the logistics service industry in Vietnam is still limited and logistics costs
are on the high side as compared with the developed countries. This is the task that VLA, the Vietnam
logistics services industry and the entire country are trying to reduce logistics costs and improve labor
productivity, striving to make Vietnam become a logistics center of the region.

In that context, VLA is implementing the Decision 200/QĐ-TTg dated 14/02/2017 by the Prime
Minister, which includes 60 specific tasks focusing on the main content that is to connect closely
with enterprises in production, importation, exportation and distribution areas to increase the ratio of
outsourcing, to develop 3PL, 4PL and e-logistics services, to promote the application of high technologies
and training development of high-quality logistics human resources. VLA has to do well the work of
social criticism and membership promotion to reach 500 members by 2020.

The information and data in this VLA Whitebook 2018 are sure to provide businesses, especially
VLA members with a more complete and accurate view of Vietnam's logistics activities to plan effective
business operations in the time to come. The information and data of the VLA Whitebook 2018 will
also be a reliable reference for State management agencies in planning policies related to the logistics
service industry, and controlling logistics activities. They will serve research institutes and organizations as
well as enterprises at home and abroad in cooperation and development of the Vietnam logistics service
industry.

This is the first time VLA publishes its VLA Whitebook 2018 on the occasion of the 25th founding
anniversary of the Association. During the preparation process, VLA had received a lot of practical
comments and support from domestic and international people, organizations and experts inside and
outside the logistics service industry. VLA expresses its sincere thanks to them.

The VLA Whitebook 2018 on logistics is made in a time constraint, hence certainly shortcomings
occur. However, VLA and the Editorial Board hope that this VLA Whitebook 2018 will meet basic
information, data and formal orientations by VLA to help readers get the latest relevant information and
data. We are looking forward to comments from readers in order to improve on the next publication.
Thank you very much.
www.vla.com.vn

194 Whitebook 2018

Photo: Do Thai Son

Whitebook 2018 195

 HIỆP HỘI DOANH NGHIỆP DỊCH VỤ LOGISTICS VIỆT NAM
VIETNAM LOGISTICS BUSINESS ASSOCIATION

SÁCH TRẮNG - VLA 2018

25 NĂM PHÁT TRIỂN VÀ HỘI NHẬP QUỐC TẾ
VLA WHITEBOOK 2018
25 YEARS OF GROWTH AND INTERNATIONAL INTEGRATION

NHÀ XUẤT BẢN VĂN HÓA - VĂN NGHỆ TP. Hồ Chí Minh
Hochiminh City Culture-Literature and Arts Publishing House
88-90 Ký Con, P. Nguyễn Thái Bình, Quận 1 - TP. Hồ Chí Minh
ĐT: (028) 38216009 - 39142419 - Fax: (028) 39142890
Email: nxbvhvn@nxbvanhoavannghe.org.vn
nxbvanhoavannghe@yahoo.com.vn
Website và bán hàng trực tuyến: www.nxbvanhoavannghe.org.vn
Cửa hàng sách: 310 Trần Hưng Đạo, Quận 1, TP. Hồ Chí Minh
Gian hàng 03 Đường sách TP. Hồ Chí Minh, đường Nguyễn Văn Bình, Quận 1, TP. Hồ Chí Minh

Chịu trách nhiệm xuất bản:

Giám đốc - Tổng Biên tập Đinh Thị Phương Thảo

Biên tập: Phạm Thị Thanh Phượng

Sửa bản in: An - Phát
Trình bày & Bìa: Tạp chí Vietnam Logistics Review
Đối tác liên kết: Tạp chí Vietnam Logistics Review

In lần thứ nhất. Số lượng: 1000 bản, Khổ 20.5x29 cm

Công ty TNHH MTV Lê Quang Lộc, Số 161 Lý Chính Thắng, Phường 7, Quận 3, TP. Hồ Chí Minh
Số đăng ký KHXB: 3906-2018/CXBIPH/4-167/VNTPHCM
Quyết định xuất bản số: 599-QĐ/NXBVHVN ngày 09/11/2018
ISBN: 978-604-68-5074-8
In xong và nộp lưu chiểu năm 2018