E-commerce is exploding, requiring digital transformation of logistics "links"

Technology investment is the "key" to sustainable logistics. Illustration photo: Internet

Important "link" of e-commerce

According to the Vietnam Logistics Business Association (VLBA), the logistics industry in Vietnam accounts for 20-25% of GDP of the total value of goods and services, expected to grow 12% each year in the near future. The strong growth of the e-commerce industry brings more opportunities for logistics companies.

Deputy Director of the Import-Export Department (Ministry of Industry and Trade) Tran Thanh Hai said that logistics plays an important role in the entire process from social production, import-export, circulation and distribution to consumption, creating added value, increasingly contributing to promoting the growth of the country's import-export turnover. In the context of Vietnam's deep integration into the regional and world economy, active participation in free trade agreements and with geo-economic advantages, Vietnam's logistics service industry will have many opportunities to develop and participate more deeply in the global logistics supply chain.

With 43.9 million people participating in online shopping, Vietnam is the country with the highest proportion of people shopping for e-commerce in Southeast Asia, which shows that the e-commerce industry's demand for delivery is always necessary.

Despite the great development potential, the difficulties of the logistics and e-commerce industries are also difficult problems. According to the Import-Export Department, the increase in e-commerce transaction volume has increased the demand for transportation, logistics and delivery, which have been both an opportunity and a challenge in recent years for logistics services in the ecommerce. Buyers can shop in unlimit ed geographical areas, can order any product in another country or region via the website, order information will be transmitted and accepted at high speed almost instantaneously. But on the contrary, the transportation of goods cannot reach the user immediately, but will still need to overcome a certain geographical distance. This is done by the logistics system. Therefore, although transactions are carried out on the internet environment, logistics services are an indispensable link to complete orders and transactions.

Applying technology to logistics activities helps businesses reduce delivery costs by 14% and increase the number of deliveries per vehicle by 13%. Additionally, these breakthrough technologies enable logistics companies and service providers to further optimize costs and increase delivery productivity by intelligently planning routes to ensure multiple arrivals receive and return goods...

Digital transformation to add value

The Import-Export Department assesses that, according to statistics, the application of digital technology in logistics businesses still has many limit ations in terms of technology and information security or payment security. Technology solutions for handling post-delivery operations such as: returns, recalls, goods handling... are not well organized, built and controlled, also creating challenges for logistics units when they have not met the requirements about quality of recall services, return defective goods or return warranty products. That poses a challenge for businesses to invest more strongly to take advantage of digital platforms in the production and distribution of goods, promoting the country's economic growth.

Faced with this reality, experts believe that applying technology and digital transformation in logistics is the "key" to developing e-commerce and the economy. Mr. Le Quang Trung, Vice Chairman of the Vietnam Logistics Service Business Association, said that the trend of the modern logistics industry is towards automation, cost cutting and energy savings. Vietnamese companies have advantages in innovation, consistency in operations and competitive prices. Vietnam's seaports are currently moving towards a smart port model, applying modern automatic technology.

To take advantage of the opportunity, experts say that logistics needs to be invested carefully, especially in the aspect of digital transformation to be able to respond and adapt to the market context, and provide maximum support to promote development of other professions. According to Mr. Dinh Thanh Son, Deputy General Director of Viettel Post Corporation, many modern technologies are being deployed around the world in the field of logistics to optimize operations and protect the environment. Based on the existing 5,000 transport cars and aiming to develop an additional 15,000 cars in the next 5 years while cooperating with railway transport, sea transport... Viettel's logistics capacity is increasingly improving.

Besides, to take advantage of the potential for developing the e-commerce market, experts believe that there needs to be coordination between relevant units. These are supportive and promoting policies from relevant state agencies; from businesses, investors need to focus on expanding and modernizing warehouses and network planning to solve delivery options and forms, optimizing route deliveries, thereby minimizing costs of delivery for both businesses and users.