Seminar underscores poor logistic services
(VOV) - Vietnam businesses won’t be able to compete with foreign rivals and are likely to be defeated on home turf in the near future if they continue to depend on cheap labour costs.
Nguyen Tran Nhu Hoa, UPS Marketing Director in Vietnam made the remark at an export promotion meeting in Hanoi on April 16.
She said one of the leading UPS customers in Vietnam is a world leading footwear group with 65 factories manufacturing products.
The company chose only one factory owned by Vietnamese, while the remaining were Chinese and Taiwanese owned.
The reason for this was simply logistics, Hoa said, adding that five criteria to become factory members of the group include two important ones – logistics and customer service, not cheap labour costs.
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Vietnam businesses’ failure to meet these criteria has prevented them from taking part in the value chain of the world leading group, Hoa noted.
The logistics services of businesses, especially small-and medium-sized enterprises are too weak. These businesses just pay attention to production numbers, rather than logistics.
A current surge to move factories out of China and to other countries, including Vietnam, is a good start. However, Cambodia, Myanmar and India also have a competitive investment environment, and so if Vietnam does not change quickly, it will lag behind these countries and lose out, Hoa added.
Bui Huy Son, head of the Trade Promotion Agency under the Ministry of Industry and Trade, echoed Hoa’s view, saying that businesses should pour more dollars into logistics to get more benefits.