The Fourth Industrial Revolution is bringing tremendous opportunities for shipping and logistics in Asia, particularly in Vietnam said international experts at a recent panel discussion hosted by RMIT Vietnam.
Challenges in infrastructure and connectivity
Within e-commerce “customer behaviours are changing, [which] makes the entire logistics environment change” said DHL Global Forwarding Head of Marketing and Sales Mark Cheong. He also emphasised that new technologies needed to be adapted to tackle this challenge.
“We can define the connectivity [between good/parcels and customers] through data synchronisation [and] data transfer,” Mr Cheong explained when discussing how technology could help boost business. “This will improve the information that flows through from production to customers. And at DHL, we are online so you can get a quotation from anywhere in the world to anywhere in the world.”
Maersk Area Head of Operations (Vietnam, Cambodia, Myanmar and Laos) Tobias Gruemmer revealed that the application of new technologies could allow customers to monitor their shipping containers – their condition and security – in real time, with blockchain having the biggest potential to generate cost savings.
Ocean Export Manager of Expeditors Henry Vo discussed the opportunities for Vietnam that could come from the recent trade war between China and the US. “It might bring a lot of opportunities for us in import and export,” Mr Vo said. “Many factories approached us and expressed that they want to move production from China to Vietnam.”
Both Mr Vo and RMIT Vietnam Head of Management Department from the School of Business & Management Associate Professor Robert McClelland, agreed that the 12 free trade agreements that Vietnam currently has with many organisations in other countries will generate opportunities for the shipping and logistics industry.
Associate Professor McClelland said that even though there has been an advancement of infrastructure within Vietnam, it is not quite there yet: “In term of technologies, Vietnam is equivalent to most countries in Southeast Asia in some aspects. It has Lazada, an equivalent to Amazon, many retail businesses are moving to online sales, Grab, one of many high technology and digital businesses, as well as many holiday and hotel booking companies and businesses in the supply chain. All of those have equivalents across the whole of Southeast Asia.”
“However, transportation within the country [where infrastructure is involved], or the on-land connection, is not quite there yet,” Associate Professor McClelland said.
“The Government needs to speed up the improvement of infrastructure. It’s good now, but to stay good in the future, it needs to be invested in now,” Mr Gruemmer commented. He also urged the Government to develop the three major port complexes in the country and to speed up the development of Long Thanh airport to enable transport of bigger containers.
As the IMO 2020 [a landmark decision made by the International Maritime Organization (IMO) which settled on 1 January 2020 as the implementation date for a significant reduction in the sulphur content of the fuel oil used by ships] is approaching, representatives from leading organisations in the industry also shared their approaches on achieving sustainability.
DHL has developed its Innovation Centre in two different locations and started to adapt more environmentally friendly methods to deliver its parcels Mr Cheong said, and from June this year Maersk will offer its customers carbon-neutral transport.
“A new carbon neutral product – the first of its kind in the industry - is being piloted with select Maersk customers who are highly engaged in sustainable solutions for their supply chain,” Mr Gruemmer cited from Maersk’s recent press release. “H&M Group is the first company to trial it as part of the shift towards carbon-neutral transportation.”
While the Government may need to improve the infrastructure and connectivity in Vietnam, Associate Professor McClelland believes it’s time for local businesses to consider corporate social responsibility (CSR) when looking at business deals.
“Companies have to take CSR standards on board, especially with the number of free trade agreements that have been signed recently,” Associate Professor McClelland said. “CSR has an international set of standards and maybe Vietnam is not quite there yet, but it’s still an area that needs to be addressed. [Maybe] not in international companies in Vietnam, but in Vietnamese companies that aspire to become international.”
Story: Ha Hoang