_ TRANSIMEX- SAIGON is one of Vietnam’s leading logistics companies. Over 27 years’ operation, overcoming market difficulties and challenges, Transimex- Saigon has increased in quality and size and has constantly gained home and foreign customers’ confidence. In the term of trading scale and experience Transimex - Saigon ranked among top 3 companies dealing in Logistics in VN after Gemadept and Vinatrans.

_ Transimex- Saigon is always highly competitive due to a closed process of services from accepting, transporting, storing to collecting commodities.

_ Transimex- Saigon always proves to be a remarkable trade name with long- term experience in the field of logistics, the brilliant management and the staff with professional skills, experience, devotion and enthusiasm, appropriate and innovational facilities.

_ The headquarters is located on the main road of Ho Chi Minh city, so it can easily attract customers’ attention.

_ It has the advantage in the big yard and warehouse, area.

_ Transimex- Saigon a wide network of branches in areas and important seaports of Vietnam (Ha Noi, Hai Phong and Da Nang…) and the representative offices in the industrial zones and export processing zones such as Dong Nai, Binh Duong, TP. Ho Chi Minh… and partners all over the world.

_ Its service quality is always highly appreciated due to applying advanced technological process and modern means of transport as well as quality management system in accordance with the international standard.

_ It has potential markets and customers.

_ It also provides flexible service prices and has ability to compete with other companies in the same field.

_ In addition, Nippon Express (Vietnam) Co.Ltd. which is the joint venture between TRANSIMEX- SAI GON and Nippon Express ( Japan) from the year 2000 (with the contribution ratio of 50 to 50) holds a large market share in Vietnam.

* Long- term Development Strategy of Transimex- Saigon:

_ To be Vietnam’s leading logistics provider with quantity and quality development. The company plans to get the target growth of 10-12% /year and tends to remain stable profit growth rate in the following years (2007-2015).

_ To invest in human resources and direct them towards specialization and professionalization.

_ Using information technology in management and providing logistics.

_ Directing toward logistic services requiring high technology such as machinery and devices serving building projects, beverage, exhibits, art objects on display, art galleries and goods distribution.

_ Uniting and expanding the global system of agents.

_ Developing and widening the yard and warehouse network in the main economic areas through out the country.

_ Diversifying business lines. Apart from developing traditional industries, the company will extend its activities into new kinds of service such as offices for rent, tourism, EMS and yard and warehouse control.

In general, the market supply of logistics outstripped the demand for it due to the expanse of small and medium sized companies. The companies, therefore, are always in unsound competition.

Vietnam has been a member of WTO. Therefore, not only home companies but also foreign ones are in unsound competition (although the Government limits foreign investment in Logistics). Not only competion for supply but also quality. Foreign investors have more experience and potentiality in the logistics industry than Vietnam’s. This is really a great challenge to Vietnam’s transport and delivery system in the integrative time.

Vietnam ’s real Logistics: small scale tattered business.

The source of income worth billions of dollars is flowing into foreign investors’ pockets. Vietnam’s companies share a very small part of the huge cake which gets bigger and bigger on Logistics market. According to the latest calculation of Maritime Department of Vietnam, the most important in Logistics is the sea transporatation. Home sea transport companies meet with only 18% exports and imports in the need of transport. The other rate is carried out by foreign companies. This is really big loss of Vietnam’s companies when there is up to 90% sea-borne freight. In 2006 about 153 million tons of goods is transported through Vietnam’s seaports, up 19.4%. This is really a potential market which foreign corporations are lusting for and trying to develop.

At present there are about 800-900 logistics companies. VIFFAS had 97 members including 70 full members and 20 associative members. On the average, every company has the operation period of 5 years with average registered capital of 1.5 billion/business. However, Vietnam’s companies can satisfy a quarter the demand for logistics and mainly provide services for some steps of the huge service chain. Vietnam’s logistics industry is at a start and most of the logistics system isn’t carried out in synchronic way.

The infrastructure of logistics in Vietnam is in poor condition, small scale and irrational distribution:

Vietnam’s infrastructure system consists of 17,000 km asphalted road, more than 3,200 km railroad, 42,000 km waterborne, 226 seaports and 20 airports. However, the quality of the system is not the same and there are still some parts which are not technically guaranteed. At present, only about 20 seaports have capacity to transport international freight. Although most of the ports are in containerization, they can only accept small ships and lack of specialized handling equipment and managing experience in loading and unloading containers.

Airlines fail to provide enough air transport in rush period. In Vietnam Tan Son Nhat airport is the only destination of international freight planes. International airports such as Tan Son Nhat, Noi Bai and Da Nang still have no freight stations, sectors for collecting goods and customs clearance like some countries in the Southeast Asia. The ability to maintain and develop road system is limited and isn’t designed for container transportation. Besides, specialized trucks and lorries are in poor condition. The network of railways is not used effectively because of lacking modernization. According to head department of statistics, railway freight makes up 15% the transported freight. However, Vietnam’s railway network is made from rails with two different sizes (1,000 and 1,435 mm) and with low loading capacity. It takes the fastest train about 32 hours to travel from Ho Chi Minh to Ha Noi (1,630 km). Moreover, many inter district, inter-provincial roads are in very bad condition.

Great chance:

It is estimated that logistics will be an important economy in Vietnam, accounting for 15% Vietnam’s GDP. In particular, in the next ten years, the demand for logistics will increase when Vietnam’s import - export turnover reaches 200 billion USD/ year. In 2010, cargo containers transported through Vietnam’s seaports can reach from 3.6-4.2 million TEU. The figure may rise to 7.7 million TEU by 2020.

The economic development as well as the rapid growth of import and export operation offer logistics industry more opportunities. The country’s export turnover in the next ten years may reach $200 billion according to Ministry of Commerce. This proves the big potential development of logistics in VN.

In recent years, Vietnam’s marine transport have been significant development. About 90% imports and exports are transported by sea. Particularly, the container transportation always gets the growth rate of two figure number. However,tThe consequence is that Vietnam is in the need of deep water ports to satisfy the increasing demand for import and export. The total volume of imports and exports carried through Vietnam’s seaports is about 140 million tons/ year (153 million tons in 2006). Annual growth rate is expected to gain 20-25% in ten years’ time. Vietnam’s Government and international investors are developing series of deep water ports in Cai Mep-Thi Vai area in the south and in Hai Phong in the north. The projects are expected to be finished in 2009.

Moving foreign enterprises to Vietnam from other places also creates opportunities to set up an effective system of logistics.

Big challenges:

It is nearly time to open logistics market in 2009. According to commitment to WTO, Vietnam will offer equalities of interests and obligations to wholly foreign- owned maritime service companies and logistics providers. This is really a big challenge to Vietnam’s companies. The pressure to compete with foreign companies, constant growth of the logistic market as well as the customers requirements always remain great challenges to Logistic companies.

The most worrying problem is that home small logistics companies which are doing separate business are not aware of the importance of cooperation. To get contract, the companies are in unwholesome competition and struggle for contraction by lowering the service prices, especially cutting down the container rent cost. As a result, home companies are put a disadvantage while foreign companies who are the ship owners will obtain profit. Another concern is that while home companies are struggling with one another such big maritime corporations as APL, Mitsui OSK, Maerk Logistics, NYK Logistics…with huge capital, dense network of agents, closed system of services, specialized entrepot, wide range of information and professional administration are taking steps to penetrate, strengthen and control the home market.

Let’s take Canon in Que Vo, Bac Ninh as an example. When the factory offers package logistics, NYK logistics, LOGITEM, MOL Vietnam and Dragon Logistics together bid for the service package. Consequently, the winner is the company that offers the prices below the cost price in the stage of transport in heavy-duty truck and . The damage is compensated by sea transport charges. Thus, companies without cargo ships must be at disadvantage.

Besides, one of the biggest facing Vietnam’s logistics is the lack of human resources. According to VIFFA’s estimate, there are about 4,000 employees among 140 full members. It is estimated that there are about 4,000- 5,000 semiprofessional employees. The human resource comes from different sources. Up to now, transportation, marine, foreign trade universities and colleges only give general lessons of foreign operations, transportation. School books and referent materials on this kind of logistics are limited. It is worse that experts with advanced training aren’t enough to satisfy demand for development.

Conclusion:

As mentioned above, logistics not only brings about an enormous source of income but also plays an important part in businesses’ stability. According to ESCAP, logistics is a process of optimizing position, storing and transporting natural resources, input and output from providers, distributors to customers by means of economic activities.

As for national economy, logistics play an essential role in production, transportation and distribution. Recent surveys show that logistics accounts for 15-20% GDP of almost countries in Europe, North America and Asia-Pacific. Therefore, if logistics industry works effectively, social economic effects certainly improved.

For companies, logistics play a key role in solving input and output problem effectively. Logistics can change the input resources and optimize rorative process of cargo service material. In addition, it can help reduce the cost and stimulate their competitiveness.

In Vietnam, logistics cost makes up 20% the cost price while the figure in developed countries is 8-12%. This weakens the competition about finished goods between Vietnam’s businesses with foreign companies.

Distribution is considered as the decisive factor of the economy. Taking the advantages of distribution system is to be sure of success. Logistics is an important link of the system. So logistics should be taken into proper consideration as the time for logistics to participate in WTO is approaching and it is highly probable that Vietnam’s logistics will be defeated on home market.