Logistics groups roll out schemes to avert doldrums
As the COVID-19 pandemic wreaks havoc on supply chains globally, logistics firms in Vietnam have experienced decline in revenue but are mustering the strength to overcome the challenges ahead.
Logistics groups roll out schemes to avert doldrums, illustration photo
Bee Logistics, one of Vietnam’s leading international service providers in the field, has seen a 10 per cent fall in the number of services providing for customers in the first quarter. In the second quarter the dip may reach 50 per cent or even more.
With representative offices in eight countries, including Vietnam’s major trading markets of China and South Korea, the pandemic has significantly delayed Bee’s plan to expand networks, and harmed the business results of its representative offices abroad.
According to the latest survey by the Vietnam Logistics Association (VLA), around 15 per cent of logistics firms have experienced a 50 per cent decline in revenue against 2019. Also, half of them reported a 10-30 per cent decline in logistics services in local and foreign markets so far compared to last year.
Chun How Loh, general director of APL Logistics Vietnam Co., Ltd., said that all sectors of the economy are being impacted including retail and consumer goods, which are some of the key exports of Vietnam. “As necessary measures are taken to combat the virus we expect to see a major downturn, and are preparing to weather the impacts of such downturn for the foreseeable future,” Loh said.
The supply chain impact is uneven across the various industry segments. To mitigate the impact of the COVID-19 crisis, logistics firms have led several initiatives to overcome the tough times. APL Logistics is actively rolling out and accelerating process digitisation to support work from home for all functions except those critical for maintaining operations at its facilities.
APL Logistics was an early adopter of e-invoicing when Vietnam was pushing for it. Currently the company is accelerating other digital solutions, including a remodelling of its operating systems to support these unprecedented times.
For its clients, APL Logistics is also rolling out “flow management” programmes to help them slow down or speed up their supply chains as needed.
Dinh Huu Thanh, CEO of Bee Logistics, told VIR that to mitigate possible losses from COVID-19, the company has focused on diversifying services and increase its professionalism since the beginning of this year, while strengthening customer networks and improving quality of staff, services, and IT applications to increase labour productivity.
According to Thanh, Bee Logistics has made efforts to improve connectivity among kinds of logistics services, for instance, co-ordination among railway, sea freight, and road logistics services. “The company not only offers solutions at cross-border gates to ease risks for customers from changes in the policies, but also solutions for air freight service amid cut of flights,” Thanh said.
Meanwhile, the company keeps updating information and giving consultancy for customers about the markets and import-export procedures. It is also developing bulk cargo services, gauge cargo transportation, and other domestic services.
Bee Logistics expects the government to use financial tools to support businesses such as relaxing times for tax and social insurance payments, reducing cost of bank loans, and creating a healthy business environment in general.
Other measures may include formulating supporting policies for private companies to develop services abroad; developing and performing policies more efficiently; facilitating trade procedures; and studying the advantages of geographical location to develop Vietnam into one of leading logistics transshipment hubs in the region.
Last week, the Ministry of Transport asked the government to assign the Ministry of Finance to consider reducing several taxes for transport businesses. For the civil aviation industry, the ministry has asked the government to exempt import and environmental protection taxes on flight fuel from January 23 to December 31.
In case of difficulties balancing the budget, the ministry expects the government to cut half of these taxes and allow businesses to delay tax payments and budget contributions.
Furthermore, the ministry also asked for reduced or suspended payments for corporate income, personal income and foreign contractor taxes over the same time frame. Businesses are expected to enjoy cuts to VAT on domestic transport over three years. VIR
The expected execution of the EU-Vietnam Free Trade Agreement in 2020 will create great pressure on Vietnamese logistics businesses, insiders said.
Fifteen per cent of Vietnam’s logistics firms estimate they will see revenue cut in half this year compared to 2019 because of the Covid-19 pandemic.