Labour shortages hold back Vietnam's logistics industry

Thousands of logistics entrepreneurs are struggling with a serious shortage of employees since a rapid increase of services demands, the Vietnam Logistics Institute (VNLI) has said.

About 300,000 business entrepreneurs are involved in logistics services, providing jobs for nearly 1.5 million labourers across the country, of whom 40% are from HCM City.

However, these employees could only meet 40% of the sector's demand in Vietnam, so the country was facing a serious shortage of workers in the next three years, the institute has reported.

In the next three years, those companies providing logistics services would need more than 18,000 workers, while other firms that provide their own logistics services would need more than a million more employees, it said earlier this week.

A lack of vocational training and information was hindering the employment process for the sector, experts warned.

Dr Le Van Bay, a logistics lecturer, said education and training in colleges and universities had ignored the sector so only a few students studied logistics.

Bay said the HCM City University of Transport and the Vietnam Maritime University had opened logistics faculties, but they faced increasing obstacles to improve the quality of training due to a lack of experienced lecturers.

The logistics service industry in Vietnam has seen impressive progress in both speed and quantity, despite a shortage of capital, equipment and infrastructure.

However, most logistics companies in Vietnam say they lack highly qualified staff.

A logistics employer from HCM City complained his company was struggling to expand due to a shortage of high-skilled workers.

He said most experienced logistic workers preferred part-time work, while new graduates were not qualified for the positions due to a lack of soft skills, including communication and foreign languages.

A recent survey by a HCM City development research institute said 53.3% of logistics companies in the city faced a shortage of high-skilled workers.

About 30% of those companies complained they had to re-train their employees and only 6.7% were satisfied with their labourers' qualifications.

Fast growing

While the Vietnamese logistics sector is only in the early stages of development, demand for such services is growing fast, a development spurred by the country's continued inflow of foreign direct investment (FDI).

Following Vietnam's 2007 World Trade Organisation accession, the country's FDI level has been rising steadily.

Accounting for more than half of the total accrued FDI, investment in manufacturing in particular has been driving the country's demand for international transport and logistics services.

Situated to the southeast of the Indochinese peninsula and with a 3,200 km coastline, Vietnam depends heavily on sea freight transportation for its external trade.

With commercial and manufacturing activities developing much in the south, the ports along the Mekong River Delta and in HCM City have traditionally been the mainstay of Vietnam's transport and logistics industries.