ASEAN Logistics Firms Eye Enhanced Connectivity ahead of AEC Formation

Attendees at the conference entitled “Vietnam Logistics Integration into AEC 2015” in HCMC on Nov. 27 (Photo: BizLIVE)

The event drove the participation of representatives of Vietnam’s Ministry of Industry and Trade, the General Department of Vietnam Customs, the Vietnam Logistics Business Assiation (VLA) and logistics associations of the other nine ASEAN countries.

In his opening speech, VLA Chairman Do Xuan Quang stated that the ASEAN Economic Community (AEC) will turn the ASEAN into a region of free movement of goods, services, investment, skilled labor force and capital.

On the way to become a single market, ASEAN leaders and associations pay great attention to developing the logistics sector, he added.

Backbone of trade activity

The logistics sector is considered the backbone of trade amongst ASEAN members as it plays a continuous role in the process starting with the purchase of inputs, goods manufacturing, and distribution to end consumers.

Logistics integration is expected to help accelerate the connectivity between the manufacturing sector within each ASEAN countries as well as among them, to ensure the successful of the AEC.

Joining the AEC and integrating in the logistics network in the ASEAN bring both opportunities and challenges to the Vietnamese logistics busineses, the VLA chairman said.

Thus the conference will provide room for regional logistics service providers to find Vietnamese potential clients and enhance the connectivity between the Vietnamese logistics industry with the global supply and value chains, Mr. Quang noted.

Momentum from AEC for Vietnam

Vietnam’s Vice Minister of Transport Nguyen Nhat showed his optimism about effects of the AEC integration on Vietnam and its logistics industry. ASEAN is Vietnam’s third-largest export market, only after the U.S. and the EU.

The integration of the logistics industry in ASEAN countries requires removing hindrances to market access of foreign companies, facilitating trade and customs, and applying cross-border multimodal transport, he stressed.

He pointed out that the linkage between Vietnamese logistic service providers and exporters was weak, leading to modest contribution of the sector to the local business community.

This situation leads to another headache, which is the heavy fee burden that local exporters have to bear, thus undermining the competitiveness of Vietnamese goods, he said.

In addition, the practice of “buying CIF, selling FOB” seen at Vietnamese exporting companies has existed for a long time. “This practice has caused Vietnam to miss opportunities for further development of the transport, insurance and logistics,” Mr. Nhat added./.

Source: Bizlive