Application of Information Technology by Vietnamese Logistics Enterprises

Globalization has opened the door to trade between nations, posing new challenges for transportation, warehousing, and post-logistics services. Expected in the first decades of the 21st century, one of the three important global development trends in the logistics sector is e-logistics.

Post-logistics management is a complex field that requires significant costs but plays a crucial role in a business’s profitability, especially in the rapidly developing e-commerce context. Therefore, the application of information technology and e-commerce, such as global supply chain information management systems, is becoming a widely adopted trend in the business.

Digital transformation (DT) is an objective and urgent requirement for logistics enterprises. Therefore, logistics companies need to undergo DT to change, create breakthroughs to enhance competitive capabilities, reduce costs, and achieve growth.

This article will present policy recommendations to promote the use of information technology in the activities of logistics enterprises in Vietnam.

Current Application of Information Technology in Vietnamese Logistics Enterprises

Logistics enterprises in Vietnam provide 2-17 different logistics services, mainly in areas such as freight forwarding, transportation, warehouse management, express delivery, and customs declaration. About 50-60% of enterprises are currently applying various types of technology, depending on the scale and nature of each business. However, the biggest challenge they face is financial capacity.

Among the various applications of information technology, only customs declaration exceeds the 75.2% threshold due to the mandatory requirement for electronic customs declaration for imported and exported goods. Other basic applications such as order management (41.9%), tracking and tracing (38.5%), transportation management (37.6%), barcode scanning (27%), and human resources management (26.4%) are below the average.

A detailed analysis of the level of information technology application for members of the Vietnam Logistics Association (VLA) is shown in Table 1. The results indicate that indices such as order management (16.9%), e-commerce (15.5%), and logistics for e-commerce (10.8%) reflect limitations in the application of information technology in Vietnamese logistics enterprises.

For Vietnamese logistics, information technology is integrated into four main areas: road transport, warehouse automation in e-commerce, manufacturing operations control systems, and supply chain management in the retail industry.

However, a survey by Vietnam Report shows that although 100% of logistics enterprises have increased investment in digital transformation in the past year, only 86% believe that applying technology and digitization will bring significant benefits in terms of productivity and business efficiency.

It is noteworthy that, despite the potential, the logistics industry in Vietnam has not developed proportionally to the opportunities. The majority of Vietnamese logistics enterprises are small and medium-sized, facing limitations in investment capital and a lack of specialized human resources in information technology. This poses a challenge for them to participate in the e-logistics supply chain, especially for 90% of businesses with capital under VND 10 billion.

Table 1. Results of information technology application by VLA member enterprises

Factors Affecting the Application of Information Technology in Vietnamese Logistics Enterprises

Awareness of Information Technology:

Although awareness of the benefits of information technology is increasing, up to 44% of logistics businesses do not consider the important role of technology in their development. 61.9% of businesses only focus on limited information technology development strategies. Concerns about the safety and security of information on online platforms are a major reason why 43.3% of businesses do not consider information technology a crucial factor for competitive advantage.

Infrastructure and Technology:

Vietnam is still lagging in terms of technology compared to the world, leading to businesses primarily using available technologies instead of mastering the core technology of digital transformation. The information technology infrastructure is still underdeveloped, and non-uniform, causing difficulties in the digital transformation process.

Human Resources:

To promote the digital transformation process, there is a need for employees with the ability to access, develop, and use new technologies. Therefore, training and developing human resources are crucial factors. 90% of businesses with capital under VND 10 billion face difficulties in participating in the e-Logistics supply chain.

Financial Resources:

Over 98.1% of SMEs in Vietnam are facing difficulties in terms of capital, making it challenging to implement expensive technology solutions. Small and medium-sized enterprises mainly focus on short-term growth forms to address capital issues.

State Policies on Information Technology Development:

The government needs to implement policies supporting businesses in digital transformation, creating conditions for comprehensive and effective development. Financial support, human resource training, and building digital transformation guidelines for businesses are essential measures.

Conclusion:

The application of information technology in the logistics industry is the key to ensuring sustainable development in the Industry 4.0 era. Close collaboration between businesses and the government is essential to promote digital transformation, posing challenges such as limited awareness, inadequate infrastructure, and issues with human resources, and finance. To overcome these challenges, a comprehensive strategy and active support from all relevant parties are needed.

Source: VLA

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