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WB: Private sector can improve logistics

Released at: 09:24, 09/01/2016

WB: Private sector can improve logistics

Vietnam could do worse than more thoroughly engage the private sector in freight logistics, according to a recent World Bank report.

by Hoang Thu

Vietnam’s evolving economy needs new strategies to maintain strong growth and a recent World Bank report calls for the government to work with private sector importers, exporters, and transport companies to improve freight logistics.

Entitled “Engaging the Private Sector in Transport and Logistics Planning and Policy Making: Options for Vietnam”, the report noted that systematic engagement with freight stakeholders by government agencies responsible for planning and policy making can boost trade competitiveness.

“By more explicitly, transparently, and predictably engaging with private sector stakeholders all across the import-export and domestic supply chain, national agencies like the Ministry of Transport and sub-national ones like provincial departments of transport can better equip Vietnam with the logistics system it needs as it enters its next phase of logistics competitiveness as a middle-income country,” said Mr. Luis C. Blancas, World Bank Senior Transport Specialist and author of the report.

International experience has shown that private sector stakeholders - the end-users of transport infrastructure and key intended beneficiaries of public policies aimed at facilitating trade and reducing logistics costs - are well-positioned to inform public sector decision making on matching supply and demand in transport and logistics, according to the report.

In Vietnam, however, private sector stakeholders remain relatively untapped as a source of insight into transport and logistics policy making and planning.

Malaysia, Thailand, the US, and the UK are among the world’s top-performing countries in transport and logistics, according to the World Bank’s Logistics Performance Index benchmark, and have considerable experience in engaging private sector stakeholders in planning and policy making to help public sector agencies support strong logistics outcomes. Such experience elsewhere provides lessons learned and pitfalls to avoid for Vietnam.

In the past, private sector freight stakeholders in Vietnam have worked with government agencies on efforts to facilitate trade, rather than longer-term aspects like infrastructure planning and crafting policies to promote desirable sector-wide outcomes such as better service delivery, healthier market competition and cutting greenhouse gas emissions that cause climate change.

The World Bank report contends that increased public-private engagement can greatly enhance logistics competitiveness in those areas.

It suggests establishing legally-backed platforms for public-private and public-public collaboration and furnishing such partnerships with sufficient resources to carry out their mandate.

Other important steps include managing private sector expectations, ensuring comprehensive representation of stakeholders across the supply chain, and observing common-sense “business meeting” norms regarding timeliness and the prompt issuance of minutes with clearly assigned responsibilities and well-defined next steps.

The report also calls for pursuing private sector engagement opportunities throughout the planning and policy making cycle as opposed to only within selected portions of it.

A survey of Vietnam-based private sector freight stakeholders conducted for the report confirmed an unmet need for greater engagement between the government and private sector on planning and policy making in logistics.

Respondents strongly supported platforms for dialogue and collaboration consistent with the approaches suggested by international experience.

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