Major challenges for postal businesses According to the General Statistics Office, China is currently a major trading partner of Vietnam, with the total import and export turnover of Vietnam with China in 2023 estimated at 173.2 billion USD. However, in a recent petition sent to the Government and the Prime Minister, the Vietnam Young Entrepreneurs Association proposed that the Government and ministries and branches further promote administrative procedure reforms and especially reduce logistics costs. This association cited that logistics costs in Vietnam's agricultural sector are very high, much higher than those of other countries in the region, for example, the logistics cost of a container of bananas accounts for 15.1% of the value.

The strong development of e-commerce and logistics requires Vietnamese postal enterprises to quickly innovate, automate and focus on investing in developing network infrastructure. (Illustration photo: M. Son)

In recent years, the postal and delivery network has been developed with a system of vehicles and service points covering the whole country. In addition to the two large enterprises, Vietnam Post and Viettel Post, many other enterprises in the market have also invested in developing warehouse infrastructure and exploitation centers to organize transportation, exploitation and service provision. In addition, there are more than 50,000 transportation and logistics enterprises, most of which are small and medium-sized enterprises, renting infrastructure to operate services. With that situation, experts say that the postal and logistics infrastructure of domestic enterprises is still fragmented and not optimized, so domestic logistics costs as well as international connections are still high. On the other hand, in the next 10 years, logistics and e-commerce are forecasted to be one of the fastest growing sectors of the economy. In the Vietnamese market, large logistics and trade enterprises in the world are present. This requires domestic postal businesses, especially traditional postal businesses, to quickly innovate, digitally transform, and automate to create long-term competitive advantages for themselves.
Vietnamese postal enterprises accelerate digital transformation, automate operations. Video source: Viettel Post Vietnam's postal development strategy to 2025 defines the vision of turning postal services into essential national infrastructure and of the digital economy, especially e-commerce; expanding the service ecosystem, new operating space; promoting the development of digital government and digital society. One goal by 2025 is that the average growth rate of postal services serving e-commerce will reach at least 30%. Along with that, develop at least 3 large postal enterprises to lead the market. Postal services participate in expanding the Vietnam - China goods connection channel Realizing the need to redesign the network to meet both e-commerce and logistics needs, in recent years, the two large traditional postal enterprises, Vietnam Post and Viettel Post, have had many activities. The expectation is to form a network infrastructure to ensure the provision of postal products and services and other products and services to users with high service quality but reasonable prices, competitive with foreign enterprises. Regarding trade connections between Vietnam and China, on March 8, Viettel Post announced logistics cooperation activities with Chinese partners. This is an activity within the plan to expand investment and connect the network abroad of this postal enterprise, with the orientation of developing into a logistics technology company.

On March 7, Viettel Post signed an agreement with the government of Pingxiang City (China) to cooperate in establishing a representative office and building a China-ASEAN agricultural products trading center in this city. (Photo: Thu Huong)

To kick off the formation of cross-border trade routes between China, Vietnam and ASEAN, from March 5 to March 7, Viettel Post worked with the authorities and businesses in the two cities of Nanning and Pingxiang in China to sign cooperation agreements. Specifically, in addition to the decision to invest in two large logistics centers in China, including the China-ASEAN agricultural products trading center in Pingxiang and the logistics center in Nanning, Viettel Post also announced cooperation with Chinese businesses to effectively exploit multimodal transport. Thereby, contributing to the completion of the cross-border transport network infrastructure to optimize logistics costs, shorten transportation times and increase the competitiveness of Vietnamese goods. For Vietnam Post, in September and October 2023, the postal enterprise with the largest network scale in Vietnam also made moves to promote postal and logistics cooperation with Chinese agencies and businesses. In mid-September last year, a working delegation of Vietnam Post led by Nguyen Truong Giang, Head of the Board of Directors, visited and worked with the General Department of Posts and China Post. At this meeting, leaders of Vietnam Post and China Post discussed issues that need to be adjusted in future cooperation, and discussed the possibility of cooperation in the fields of transportation and cross-border e-commerce services. The two countries' postal services also agreed on cooperation views through organizing working groups for each field.

Vietnam Post Logistics will cooperate with Ideal Logistics TYZ (China) to develop logistics and warehousing activities in the two countries and internationally. (Illustration photo: Q.Bao)

Most recently, at the end of October 2023, in Hanoi, Vietnam Post Logistics and Guangdong Ideal Logistics TYZ China-Vietnam-Thai Supply Chain Management Co., Ltd. (Ideal Logistics TYZ) signed a cooperation contract. Accordingly, the two enterprises agreed to coordinate to develop logistics and warehousing activities in Vietnam, China and internationally; cooperate to promote trade and e-commerce activities, product consumption and use of services provided by the parties to expand the domestic and international logistics market. Activities to expand international cooperation towards meeting the needs of the e-commerce and logistics market partly show that traditional postal enterprises in Vietnam are making changes, focusing on investing in expanding network infrastructure to continue to affirm their position as key postal enterprises in the new context./.

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