Technological solutions are transforming every aspect of Vietnamese industry, including logistics. Chairwoman of IMG Logistics, Nguyen Thi Thu Hien, discussed with VIR’s Bich Thuy how logistics companies, as SMEs, can leapfrog the competition by adopting emerging tech into their business to benefit from a global boom in Cross-Border e-Commerce.
|IMG Logistics and Vcargo Cloud signed the partnership at last week’s logistics conference in Haiphong|
Vietnam’s logistics market is appealing to more domestic and international firms. What are the advantages IMG Logistics has to make it different and competitive with its rivals?
|Nguyen Thi Thu Hien|
IMG Logistics has a different view. Since 2016, when the logistics market still lacked supporting policies for development and suffered low awareness about Industry 4.0, we have spent almost three years studying the local and international market to build our business model. We recognise that amid strong development of e-commerce, what logistics firms need is a relevant logistics digital core rather than just transport vehicles and warehouses. We have a deep understanding of technologies which can enable a smart supply chain, value chain, factories, smart cities and an entire nation. Additionally, we focus on international markets and technology by co-operating with leading partners in the region.
We will start with very simple step to reach our key performance indicators. We also seek to build logistics infrastructure with the aim of helping shippers and logistics providers to move cargo faster and cheaper. We love to work with our Vietnamese small- and medium-sized enterprises and create mutual benefit. We don’t see conflict here but there may be some collaborative competition, as in any normal market.
IMG Logistics last week signed a cooperation agreement with Singapore’s V-Cargo Cloud. How is this significant to the company’s future development?
V-Cargo Cloud is one of leaders in Singapore in e-commerce logistics platforms and has had great success in over 40 countries including the key regions of Asia-Pacific, China, the Middle East, Central Asia, Latin America, and the African continent.With this agreement, we will cooperate for the digitalisation of logistics and cross-border e-commerce (CBE) in Vietnam.
As part of the partnership, IMG Logistics and V-Cargo Cloud will work on an e-commerce logistics platform to provide digitalised services and databases for relevant companies. Evidently, it marks an important milestone in our current development. With strong expertise in e-commerce logistics and a deep network of customers, V-Cargo Cloud will give us a great opportunity to approach thousands of customers both domestically and worldwide amid a boom in e-commerce.
CBE is now a key trend globally and is forecast to continue its growth momentum in the years to come. DHL’s recent report showed that CBE globally will maintain average growth at 25 per cent in the next three years. Accordingly, the total transaction value is projected to rise from $300 billion in 2015 to $900 billion next year. In Southeast Asia, even though CBE is still in the early stages of development in some areas, it is nonetheless reporting positive growth.
To achieve the targets, we plan to work with 50 local IT partners to deploy the platform and are working with other potential groups. How can the new platform support logistics firms to dig into the multiple benefits from technology disruption in business development, while solving the tremendous existing challenges?
As disruptive technologies are now taking the world by storm, the logistics industry is no exception to this trend. With our platform, we hope to promote CBE by helping logistics companies digitalise their business process and operations so as to benefit from the strong growth of CBE.
We plan to develop the e-commerce logistics platform step by step, with the first moves to be made within the year. The platform will work as an information and database hub, enabling international logistics firms to enter the Vietnamese market, and helping Vietnamese firms venture further into international markets in order to benefit from a boom in e-commerce driven by growing regional and international trade.
Vietnam has signed a lot of free trade agreements with countries worldwide. However, logistics firms still lack an effective tool for e-logistics to benefit from these agreements. Besides, the Vietnamese logistics industry is facing other challenges due to underdeveloped infrastructure and a lack of logistics connectivity among means of transport and others.
The platform, which will be based in Vietnam, will support firms in administrative procedures, management of goods flows, insurance, financing, and shipping services, which will help them to reach higher service standards while also saving time and reducing costs, thus increasing their competitiveness.
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