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Hastening digital transformation in logistics industry

Digital transformation has proven itself an effective measure to enhance competitiveness in the context of the Covid-19 pandemic. Many Vietnamese logistics enterprises are hastening the application of digital technology and increasing the connection with related industries, creating favorable conditions for this transformation.

Great effect

Vietnam’s logistics companies mainly used simple software in their business activities in the past. However, recognizing the important role of digital transformation, since 2018 logistics companies have been applying more advanced software, reducing operating costs, attracting more customers and maximizing profit. For example, digital technology has helped Vico Logistics (Vietnam) Company Limited connect with customers and analyze data faster and more accurately. T&M Company Limited spends more than VND1 billion annually to operate an integrated digital transformation model in warehouse and sea freight management, reducing processing time and facilitating access to global value chains.

Although the effectiveness of digital transformation in logistics is distinct, high costs and unsuitable technology application still pose many difficulties.

In fact, Vietnam has only 17 types of logistics services with different levels. In addition, inexperience in international software application, mistrust of digital technology applications in terms of security, safety level and solvency, and ingrained fear of change are also a barrier to digital transformation.

Sticking to government policy

According to the Vietnam Logistics Business Association (VLA), digital transformation progress requires implementation of Prime Ministerial Decision 749/QD-TTg dated June 3, 2020 approving the national digital transformation program through 2025, with orientations toward 2030.

In order to implement this decision, VLA is conducting a number of key projects. The first is sample model testing, application model propagation, solution transfer of eDO (electronic delivery order), eBL (electronic bill of lading) for less-than-container loads (LCL) transported by sea and air by blockchain technology. This project is being actively researched and prepared to be deployed in the next three months.

According to VLA Vice President Dao Trong Khoa, the association has an initial agreement with FPT Corporation and the Vietnam Digital Agriculture Association (VIDA) to establish a community technology company for development of a platform to connect available technology applications.

According to VLA, all steps are being implemented urgently because digital transformation is crucial to developing safe logistics services given the Covid-19 pandemic. However, to speed up digital transformation, VLA also petitioned the state to speedily complete the legal framework for digital transformation, especially on security, anti-sabotage cooperation, digital administration and taxation of digital technology.

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