The world is changing rapidly, making the global supply chain increasingly complex, and logistics costs are becoming a clear burden for Vietnamese businesses. To maintain a competitive advantage, businesses need policies to cut logistics costs. However, this will lead to huge challenges for businesses.

So how to reduce logistics costs, optimize processes while still maintaining service speed and quality? This article by Meksmart will help you see clearly the problems that logistics businesses are facing today as well as solutions to reduce logistics costs.

1. Current general situation of logistics enterprises

According to the World Bank's report, logistics costs account for a large part of the cost of many industries in Vietnam, averaging 16-17% of GDP, many years ago it was 18-19%. This is a relatively high logistics cost compared to other countries in the region and continent (Japan's logistics costs account for only 11% of GDP, Singapore 8%, Malaysia 13%, Indonesia 13%)... These figures reflect the great pressure that businesses face when trying to cut costs while still ensuring service quality.

Reasons for high logistics costs of Vietnamese enterprises:
- The capacity of domestic logistics enterprises is still weak: Limited capital, technology, management and high-quality human resources.

- Underdeveloped transport and logistics infrastructure: Facilities such as seaports, warehouses, and means of transport are still lacking and weak.

- Transportation costs account for a large proportion: Transportation accounts for 40 - 60% of total logistics costs.

- Lack of multimodal transport connections: Mainly transport by road, which is inherently expensive.

- Unusually high domestic transportation costs: For example, transporting containers from Hai Phong to Hanoi is 3 times more expensive than transporting from China to Vietnam.

- Foreign enterprises account for a large market share: Although the number is small, international logistics companies account for up to 80% of the market share.

- Lack of modern information systems and clear legal frameworks: Causing difficulties in management and expansion of operations.

Current status of logistics enterprises

From that situation, enterprises need to reduce logistics costs to not only save budget but also: optimize the supply chain, improve operational efficiency, enhance price competitiveness in the market, improve customer experience thanks to faster and more accurate delivery.

2. Reducing logistics costs - Challenges for businesses

Cutting logistics costs is necessary in the current context, but also poses many big challenges for businesses.

One of the big challenges that businesses face when reducing logistics costs is the issue of data quality. To make accurate and timely decisions, businesses need to collect, analyze and share data related to performance, costs and logistics operations accurately, completely and synchronously.

In addition, balancing logistics costs with other factors such as service levels, quality, safety and reliability is not a simple problem. These factors often have a trade-off relationship, easily leading to conflicts between internal goals as well as between stakeholders.

In addition, coordination and cooperation with partners inside and outside the business from suppliers, transport units, distributors to customers is necessary to optimize the supply chain. However, each party has different interests, expectations and capabilities, making the cooperation process difficult.

Finally, businesses also have to cope with unforeseen fluctuations from the external environment such as market conditions, consumer trends, changes in policies or disruptions. All of these factors can directly affect the business's logistics strategy and efficiency.

Challenges for businesses when reducing logistics costs

To minimize logistics costs while maintaining stable operations, businesses can apply a number of comprehensive and synchronous solutions such as promoting energy conversion and saving, and optimizing operating processes to improve resource efficiency. In addition, businesses can take advantage of mergers and acquisitions (M&A) to expand scale, market and accelerate growth. However, businesses need to be cautious about the risk of being acquired by strategic partners.

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3. Meksmart accompanies businesses to reduce logistics costs

With a team of experienced experts in the fields of operations, logistics and digital technology, Meksmart provides solutions for businesses to reduce logistics costs with MEKTMS and MEKWMS.

MEKTMS is a comprehensive transportation management solution for logistics businesses with 3 core goals:

- Reduce transportation costs
- Improve delivery efficiency
- Increase customer satisfaction

MEK-TMS helps businesses quickly plan transportation, optimize routes and improve performance. The system automates the delivery process, bringing superior efficiency compared to traditional methods.

MEKWMS is a modern warehouse management solution, processing in real time in an optimal way:

- Optimize processing speed: All data on goods, processing status, inventory... are continuously updated in real time, helping managers make quick and accurate decisions.

- Smart solution for order preparation: store and retrieve data quickly, optimize pick-up routes, automate processes: packing, shipping, counting, receiving, classifying locations, managing documents, reallocating warehouses...

- Accurate and transparent inventory management: Track inventory by item code, status, storage date, expiry date, etc.

- Arrange goods optimally according to multidimensional criteria: MEKWMS uses smart algorithms to determine the optimal storage location for each type of goods, based on type, size, volume, frequency of delivery, expiry date, storage temperature requirements, etc.

Meksmart accompanies businesses to confidently reduce logistics costs

CONCLUSION

Reducing logistics costs is a big challenge for Vietnamese import-export enterprises, but if the right solution is applied, it will bring clear results.
Good cost control not only helps reduce product prices but also enhances national competitiveness, promoting sustainable economic development.
Meksmart accompanies businesses in the digitalization process from process consulting, WMS/TMS implementation to data analysis to build a flexible, transparent and economical logistics system.