How will the logistics industry solve the problem of sustainable development?

The logistics industry has been seriously impacted by the Covid-19 pandemic. Image: T.L

The Covid-19 pandemic has shown the fragility of supply chains around the world. To develop sustainably, the logistics industry is forced to shift strongly in the coming time.

Discussing in the online discussion “Vietnam Logistics – Towards a sustainable supply chain”, on the morning of October 7, Ms. Megan Benger, Senior Consultant of TMX Global, said that the Covid-19 pandemic has awakened many businesses, helping businesses recognize the weaknesses of the logistics system. Together with the development of e-commerce and the rapid change in consumer spending habits and service expectations, transportation companies are forced to adjust their logistics operations.

For example, delivery service within a day has become a must-have service for a logistics business. In addition, the ability to track orders is also something customers are especially interested in when choosing a service. Or some countries have curbside delivery services near their homes for customers to pick up, or click and collect services have also become popular so customers can go to a certain point to pick up the goods.

In particular, businesses are also focusing on investing in reverse logistics to ensure the exchange and return process is smooth. Currently, due to the explosion of e-commerce, the level of influence that logistics companies have on customers has changed a lot. Previously, the responsibility of customer interaction and care belonged to retailers. However, as consumers gradually shift from in-store shopping to online shopping, the interaction between shoppers and logistics businesses is also increasing.

Senior consultant at TMX Global said that in the coming time, to ensure the supply chain operates more effectively, the way companies work with 3PL transportation providers must also change, with a longer-term plan to minimize future risks.

“Previously, the company shipped goods mainly by road, but now we have to consider shipping goods by sea. Other companies that primarily ship goods by sea must now consider shipping goods by air. Many companies also have to come up with different solutions to bring goods to customers,” Ms. Megan Benger said.

This expert recommends that businesses and governments need to consider placing Micro-fulfillment centers (small-scale order processing centers) in urban areas, close to end consumers to minimize delivery time. In addition, the trend of warehouse automation is very popular with businesses. This trend not only meets the need to cut costs and manpower but also increases efficiency and order processing time.

Transportation management systems are also applied by many businesses and are constantly updated to optimize transportation processes, reduce delivery time to consumers as well as help customers easily track orders. In addition, the transportation management system also helps customers manage performance, find weaknesses to overcome and improve, and increase competitiveness in an increasingly fierce market.

“Businesses that have a long-term vision and invest in modern technology for logistics are gradually gaining more market share, dominating and increasing customer satisfaction,” Ms. Megan Benger emphasized.

Applying technology in logistics will minimize the weaknesses of the logistics industry in the future. Photo: T.L

According to Dr. Nguyen Van Hop – Dean of IEM Department, International University (Vietnam National University HCMC), in the past, conventional supply chains only focused on efficiency by providing goods to consumers as quickly as possible, most cost-effectively, on time, right quantity and quality. However, after the Covid-19 pandemic, the supply chain wants to operate more sustainably, not only ensuring operational efficiency but also focusing on other factors, of which two are particularly important about environment and society, as well as people.

In terms of the environment, the supply chain operates more sustainably only when it consumes less of its resources including: raw materials, energy, water resources, human resources… less and emits less. In terms of society, people and businesses must invest in training so that human resources have better expertise, ensuring the welfare and working conditions of workers and impact on society.

From the perspective of logistics businesses, Ms. Cao Cam Linh, Strategic Director of Viettel Post Joint Stock Corporation, wants state agencies to consult with experts and businesses to build a legal corridor timely, ensuring roles as well as rights and mechanisms to promote logistics and supply chains.

Specifically, according to Ms. Linh, in 2020, the Prime Minister issued Decision No. 283/QD-TTg approving the Service Industry Restructuring Proposal to 2020, with an orientation to 2025; at the same time, there are additional projects and directives on promoting inland waterway transport.

However, the field of logistics and supply chain needs to be oriented more deeply and clearly. In addition, to be able to integrate internationally, it is necessary to have projects to develop international seaports, and international airports that must have clear institutions, creating favorable conditions for businesses to develop.

Translated by: Nguyễn Hương