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Vietnam Academy of Social Sciences Graduate Academy of Social Sciences VU THI QUE ANH LOGISTICS DEVELOPMENT IN SOME ASEAN OUNTRIES – LESSONS DRAWED FOR VIETNAM Major: World Economics & International Economic Relationship Major code: 62.31.07.01 Name of Supervisors: 1. Prof. Dr. Nguyen Xuan Thang 2. Asso. Prof. Dr. Pham Thi Thanh Binh Ha noi, 2014 PREFACE 1. Rationale of the dissertation Logistics are operations to optimize the storage, to-way transportation of resources (raw materials, semi-finished products, finished products and goods), finance, and information from the provider through the stages of the supply chain to consumers. In the modern economy, logistics is more and more playing important role. In the condition of production keep grows when the resources being scarce, logistics help manufacturers to optimize all operations to save resources, save money and save time. Moreover, in a competitive conditions where machineries, equipments, technology developed at an equal level, the supplier who have lowest logistics cost and could fastest satisfy customer demands will have an edges on others. In addition, in the conditions of globalization and regionalization in which production and business activities related to multiple countries with different distance and time, logistics become more important because the efficiency of logistics directly affect to the price of goods and ability to satisfy customer’s demands. The recent researches have pointed out that logistics operations accounted for 10-15% of GDP itself in most countries in Europe, North America and Asia-Pacific. Therefore, improving the efficiency of logistics operations will contribute to improve the socioeconomic efficiency of each country. The development of logistics systems will ensure to properly deal with issues of transportation, warehousing services, transit, customs clearance and therefore increase the competitiveness of the goods and services. However, in Vietnam, logistics is a new sector and spontaneously developed with low efficiency, inadequacy and high cost (the logistics cost to GDP of Vietnam is 25% in compare with logistics cost to GDP of the US is only 7,7%; Singapore is 8%, European countries is about 10%, Japan is 11 %, China is 18 %,). High logistics costs is an important cause that reduced competitiveness and business performance of enterprises in particular and hinder the growth of economic of Vietnam in general. Therefore, if logistics are not to 1 be attached special important to development, Vietnam economy will not only have to suffer from loss of benefits but the domestic manufacture sector will also have to face difficulties to survive due to they could not compete with foreign companies. So, the problem of the logistics systems establishment and development in Vietnam really needs to be answered. Studying and learning experiences of logistics development in the three ASEAN countries that have more developed logistics system (as Singapore, Malaysia and Thailand) is necessary in order to draw lessons for Vietnam. This is a short and effective method to help Vietnam to rapidly achieve goals of logistics development. The fellow has selected the "Development of logistics in several Southeast Asian countries - Lessons for Vietnam" as research subjects. 2. Literature review In about recent 20 years, logistics has attracted the attention of researchers. There are plentiful logistics studies in the world and studies have been approached in variety of different point of view. Almost general theoretical researches on logistics are in terms of microscopic focusing to issues that related to the logistics in business. In addition to the general theoretical studies, there are some specific studies focusing to one or several aspects of logistics in a certain countries at middle and macro angle. Some logistics studies of Singapore, China, Thailand shows the fact that they interested in learning foreign experiences. In Vietnam, there are very few in-depth logistics studies, especially Vietnam do not have in-depth study focusing to the experiences of go-ahead countries. In the national research, Prof. Phd. Dang Dinh Dao has published a monograph about logistics services of Vietnam in the global integration process (2012). The book is partly mentioned to logistics development experiences of Japan, China, Singapore and Thailand but only at very generally view because this is not the main research purpose. Therefore, it is necessary to have an indepth study with more comprehensive research about this issue. 3. Objectives and tasks of the dissertation 2 The overall purpose of the dissertation is to draw lessons from the experiences of logistics development of Singapore, Malaysia, and Thailand and propose recommendations for the logistics development of Vietnam. To achieve this overall purpose, the dissertation have specific objective as: - Interpretation of basic theoretical issues of logistics and logistics development, with particular emphasis to the theoretical development of logistics and logistics development in the macro perspective as the national logistics system. - Analyzing the situation to assess the strengths and weaknesses, and the causes of success as well as limitations in logistics development of Singapore, Malaysia and Thailand. - Drawing lessons for logistics development in Vietnam from logistics development experiences of Singapore, Malaysia and Thailand. - Assessing the logistics development of Vietnam to identify shortcomings, limitations and the cause of that situation. - Proposing recommendations for logistics development in Vietnam. 4. The scope and objects of the dissertation The object of the dissertation is logistics development of Singapore, Malaysia, Thailand and Vietnam. Dissertation approach the logistics development of 4 countries in macro perspective based on national logistics system (includes 4 elements: logistics infrastructure, logistics institutional framework, logistics service providers and the logistics services user) in a period of 10-20 years depends on each country. The recommendations are proposed to help to develop the logistics system of Vietnam in the short and medium term (10 years). 5. Methodology The dissertation, together with using dialectical materialism and historical materialism methodology based on secondary data sources and data from the 3 survey results of the existing research and statistics, focus on clarifying the studying issue by analyzing the high reliability Logistics Performance Index (LPI) issued by World Bank (WB. The method of qualitative data analysis is the primary method to be used, including analysis, synthesis, case study, and comparative analysis method. In addition, the dissertation uses SWOT analysis method to assess the logistics situation of target countries also. 6. The new findings of the dissertation First, the dissertation created a basic theoretical about logistics in historical and comprehensive perspective, understandable explanations of basic issues such as the essence of logistics, needs to develop the logistics, the formation and development of logistics services, the elements of the national logistics system and national logistics development context; Second, the dissertation analyzed the current comprehensive situation of logistics development in the three ASEAN countries (Singapore, Malaysia, Thailand) with rich content while pointing out the strengths, weaknesses and the causes of that limitations in logistics development in these countries; Third, the dissertation drawn some lessons from the experiences of logistics development in three studied countries and link to Vietnam case; Fourth, the dissertation pointed out the weaknesses and cause of problems of logistics development of Vietnam. Based on drawn lessons, the dissertation proposed some recommendations for the development of logistics in Vietnam. 7. Layout of the dissertation Beside the preface, conclusion, list of tables, list of abbreviations, references and appendices, the dissertation consists of three chapters: + Chapter 1: Basic theoretical matters of logistics and national logistics development + Chapter 2: Current situation of logistics development in Singapore, Malaysia and Thailand 4 + Chapter 3: Lessons from experiences of studied ASEAN countries and proposed recommendations for logistics development of Vietnam CHAPTER 1 BASIC THEORETICAL MATTERS OF LOGISTICS AND NATIONAL LOGISTICS DEVELOPMENT 1.1. Logistics theoretical: 1.1.1. Origin and Essence of logistics Logistics term has been used very first in military. After the WWII, the logistics term has been used in economy by American and by half-end of XX century the logistics term has been used all over the world with the appearance of “Logistics” companies. In fact, the logistics activities did not appear from half-end of XX century (as many people think) but it appeared along with the appearance and development of production and the essence of logistics is group of activities support for production, distribution and goods circulation. Over the time, more developed production, more improved that activities and that activities developed to higher level, more diversify, more plentiful and specialized as separated sector of economy with the name as “Logistics”. 1.1.2. Concept of logistics There are many concept and definitions of logistics. The reason is that logistics is not a single activity but includes strings of activities support whole process of production, distribution and circulation. Moreover, over the time, activities are expanded and caused concept of logistics to be changed accordingly to time and location so that many logistics concept have been defined as different time and location. Now a day, the definition of US Council of Supply Chain Management Professionals (CSCMP) 2011 is most widely acknowledged. As that definition, logistics are defined as a part of supply chain process, includes planning, performing and controlling goods, services, information in two-way flow 5 between starting point to end using point to get high efficiency, high profit to meet customer demands. 1.1.3. Main activities of logistics Logistics activities in business normally include customer services, transportation, reserve management, warehousing, material supply, purchasing and hiring services, packaging, connecting production and operation, information management. 1.1.4. Role of logistics In business view, logistics play a role of optimizing the production and business process from input to customer; support for managers to make properly decisions; ensure to provide right goods at right location just in time (JIT), satisfy customer’s demands. Therefore, logistics become important factor that add value to business’s profit, create competitiveness as well as stabilize the business development. In fact, 98% of manufacturers realized that logistics is important in satisfying customer’s demands, 85% of manufacturers aware that logistics is main factor of competitive advantage of business, 62% of manufacturer know that logistics is top priority in management. (Finland, 2009). At the macro view, logistics role in national economy to impulse or hinder the development of the manufacture industry and whole economy, to impulse the circulation of goods and to expand market in international business; to increase competitiveness of domestic goods on the international market; to be an effective tool to link the activities of various chain in the global value chain and help to reduce costs, improve and standardization documents in international business. 1.1.5. Classification of logistics Logistics can be classified according to criteria as approach way, person who operates logistics activities, characteristics of operation or according to direction of material flow depending on purpose of research. 1.2. Foundation and development of logistics in the economy 6 The popular emergence of third party logistics supplier (3PL) marks the foundation of new sector as logistics. In developed economy, logistics sector appeared sooner and fast grown with logistics supply- demand more and more raising up. 1.3. National logistics development 1.3.1. Elements of the national logistics system National logistics system is composed from 4 basic logistics elements with closed relationship as: (1) Logistics infrastructure including physical infrastructure (ports, airports, roads, railway, waterway, pipeline, warehouse, transportation, customs clearance inland ports, hubs, logistics centers ...) and Information technology infrastructure. (2) Logistics Institutional Framework including laws and policies relating to the economic environment in general and logistics activities in particular such as management regulations, tax incentives, logistics investment encourage policy, customs policy, ... (3) Logistics service provider ( LSP ) including company provide logistics services for customers. (4) The logistics user including manufacturer, import and export companies, wholesalers, retailers… who have demand for logistics services. 1.3.2. Context of national logistics development Based on the concept of economic development, national logistics development process could be understood as process to improve all aspects, increasing both quantity and quality, of elements constituting the national logistics system. That process includes development of logistics infrastructure, creating conductively institutional framework for logistics development, supplier and logistics user development in order to create the most propitious and optimal conditions that enable logistics to operate effectively and promote the development of logistics sector. As inclusive theory of development, logistics development does not only focus to quantity development as scale enlargement, increasing quantity of logistics infrastructures (increasing number or enlargement of roads, ports, airports, railway, bridges, sewers, pipelines, telecommunications networks, 7 warehouses, dry ports, ...) but focus to quality development (improve quality of infrastructure, reducing the cost of infrastructure using, increase connectivity among the transport system as a basis for developing forms of multimodal transport, increasing forms of infrastructure services, establish Logistics Zones with modern facilities... ) as well. Logistics development not only include increasing number of logistics supplier and consumer, increasing proportion of logistics in GDP but also include quality development as increasing of number of services, services quality enhancement, increasing service coverage, increasing number of services that the business willing to use. At the same time, the development of the national logistics system was also associated with changes in institutional administration, management and implementation of logistics activities with the aim to facilitate trade, reduce costs, reduce time, reduce problems, strengthen the cohesion and confidence... of the entire logistics system and to ensure sustainable growth in the future . 1.3.3. National logistics development assessment criteria As the Asian Development Bank (ADB), the performance of the national logistics system could be assessed based on four factors: logistics infrastructure, logistics institutional framework, logistic services user and logistics service providers. As the World Bank (WB), effectiveness of logistics could be assessed based on Logistics Performance Index (LPI) indexed by the WB through investigations, researches and that LPI have been publicized in "Connect to Compete - Logistics sector in the global economy" report. The LPI consists of many criteria: quality of infrastructure, customs facilitation, capacity of service providers, ability to track and trace consignments, just in time delivery, international shipment (LPI international) and many specific criteria including qualitative and quantitative assessment related to the domestics LPI. These criteria are evaluated on a scale from 1 to 5 or from 0% to 100%. According to research purpose, the dissertation have combined the approach method from logistics elements of ADB with properly indexes from 8 LPI of WB to make clearance of development level of national logistics elements and to point out strength and weakness in each element. 1.4. Factors influencing to the development of national logistics Factors that influence to the development of national logistics could be divided into 4 groups: (i) natural and geographical conditions, (ii) political, social and macroeconomic environment, (iii) the development of productive forces; (iv) strategy, policy and the role of government. CHAPTER 2 CURRENT SITUATION OF LOGISTICS DEVELOPMENT IN SINGAPORE, MALAYSIA AND THAILAND 2.1. Current situation of logistics development in Singapore 2.1.1. Natural geographic, economic and social characteristics 2.1.2. Development of logistics in Singapore With the target to make Singapore become a Center hubs in region, from 1980s Singapore Government have implemented many solutions to promote the logistics. Singapore has developed and modernized physical and communication infrastructure. Singapore has the most modern port, airport, roads and warehouse in the world. In parallel with investing to physical infrastructure, Singapore has developed the communication system by launching national informatics projects to setting-up 5 connection network as: Business network, port network, online Jurong port network, marine network and aviation network. Modern transportation infrastructure together with strong communication system is key factor make the strength of Singapore’s logistics. Singapore created an institutional framework to promote logistics development and trade facilities. Government of Singapore have enforced many policies of financial, monetary and exchange rate stabilization to 9 increase saving and attract foreign investment; implemented tax incentive policies for transportation companies, tax exempt policy for venture business, income tax exempt policy for benefit from shipping operation in 10 years… The most remarkable is beneficiaries from preferential policies of Government are strong, big scale, efficiency logistics companies and they have commitment for long term and stability development. It is evident to prove that the Singapore Government aimed to a strong and solid logistics development. Customs clearance policies have been make transparency with very clearly regulations and could be easily applied. Beside that, Singapore Government also focused to education and training policy as well as talented foreigner resources attractive policy. There are many LSP in Singapore and they could provide many services in form of flexibility with professional standard, high quality and confidence services. Big logistics demands in Singapore are the result of outsourcing trend that comes from domestic manufacturers and almost comes from foreign companies and agents. Thanks to highly developed logistics system, Singapore becomes No.1 Logistics Center in the world. In all 3 assessment reports from 2007 to 2012, the LPI of Singapore kept the flagship at 1st and 2nd ranks. 2.2. Current situation of logistics development in Malaysia 2.2.1. Natural geographic, economic and social characteristics 2.2.2. Development of logistics in Malaysia From 1980, as the strategy to develop base on export, Malaysia have recognized the important role of low cost distribution system and efficiency distribution strategy. In the 8th National Master Development Plan (20012005), Malaysia Government has enforced many policies to make facilities for both domestic and foreign 3PL companies. In 2006, Malaysia Government have created long term plan for logistics sector separately until 2020 (IPM3) and according to that, logistics sector have been identified as 10 separate sector and have an important role in national economic development. Malaysia has hardly invested in infrastructure. (i) Transport infrastructure has been synchronous and comprehensive invested; (ii) Information technology and communication infrastructure have been upgraded and modernized continuously. (iii) Many In-Land Container Depot (ICD have been built to become connecting point of transportation methods; (iv) Free Commercial Zone (FCZ) have been built to support for main ports to become regional transit center. Malaysia have created and enhanced their logistics institutional framework. As re-aware about role of logistics, Malaysia Government keep going to improve the policy system to support for logistics development; focus to facilitate custom clearance procedures; apply high technology into logistics management, supervision and control; apply various policies to set up an propitious environment to attract investment such as tax incentive policy, policies support for international LSP and directly invest to local LSP. Malaysia develop logistics market through develop LSP and support for education and training activities to make more demand for logistics. In the period of 1980 to 2000, logistics in Malaysia operated in 2PL model. In decade after that (2000-present), the 3PL logistics model have fair development in Malaysia with the participation of many 3PL companies, in which, there are companies meet international standard. Together with local logistics company (57% market share), number of big logistics companies who have global network is increasing (31% market share). In 2012, Malaysia Government continues to make more propitious conditions for logistics development through Government innovation and Economic innovation programs. Thanks to that, the logistics demand in Malaysia has increase and spread out to many sectors instead of limited in out-sourcing sector as before. 11 General assessment: Malaysia ranked 29/155 in global LPI 2012. The lowest index in the LPI of Malaysia is custom clearance facilitation (mostly relate to religion). Generally, logistics system of Malaysia is steady, logistics service quality is acceptable. Charges and fees have been adjusted to make more prefer for transportation activities (except railway). The quality of infrastructure has been well appraised. Logistics infrastructure support for transportation has been renovated. However, storage system is going to run out of capacity to meet transportation requirements. 2.3. Current situation of logistics development in Thailand 2.3.1. Natural geographic, economic and social characteristics 2.3.2. Development of logistics in Thailand From 2001, Thailand Government has recognized the important role of logistics and re-directed to make logistics as priority plan in master plan of national development. From 2003, projects of infrastructure development have been launched with aim to enhance competitiveness of Thailand by cut down total logistics cost. However, policies of Thailand Government have not made effect to logistics development. Facing with critical competition from international market and in domestics market, Thailand Government found that logistics development should be urgent matter and should be improved both in macro and micro level. From 2005, Thailand Government started strong measures to promote logistics to develop and use logistics as a tool to increase competition capacity of Thailand to push economic to grow. Thailand has invested to infrastructure. The Thailand Government have attach special importance to invest in public transport (construct and renovate roads, upgrade border business gate, warehouse, Suvarnabhumi airport) making up 44% of total national investment in period 2005-2009). However, infrastructure and capacity of railway and marine transport are still limited. The budget for investment has been arranged from national budget in combination with budget mobilized from private sector and 12 foreign investment. Beside the investment for infrastructure, Thailand Government orient to bring informatics technology into logistics management but they just started very beginning steps and it has not make any effect. Thailand has tried to make custom clearance facilitation by applying auto-custom system very soon (2000) and until 2007, Thailand officially applied electric custom system. However, that system has just applied in not so long time and procedures are still complicated so that the efficiency of custom clearance is not high. Logistics supplier in Thailand almost is foreign 3PL supplier with high quality services. Local LSP is very weak because small system, lacking of information on logistics management, limitation of capital and quality of human resource is not so high. There are only about 16 suppliers could provide comprehensive services and about 30 shipping company in Thailand but total capital of that group possessed 5% total registered logistics capital. Logistics demand of Thailand comes from foreign investment company and enterprises. Local manufacturers do not have habit to use out-sourcing services. To develop logistics sector, Thailand Government enforced many policies to encourage domestic company to have more deeply participation in to 3PL logistics market. Government also provides support for enterprise as advisory, technical and service advisory (Program of Thailand business enhancement 2002), attract foreign investment in processing industry to create demands for logistics market. General assessment: Logistics cost of Thailand has been reduced but still stand at high. The Thailand’s transportation infrastructure is not synchronized and not modern. The application of communication technology into logistics management is very limited and human resource is low quality. Administration and procedure (especially custom procedures) in Thailand is still complicated. As the assessment in LPI of WB, logistics 13 performance of Thailand seems to be go down in compare with general development of global logistics. Thailand fall from 31 st rank (2007) to 35th position in 2010 and to 38th position in 2012. 2.4. The reasons of success and limitations in the logistics development of Singapore, Malaysia and Thailand. 2.4.1. Singapore case Factors make propitious condition for logistics development could be listed as (i) advantages of nature condition; (ii) developed and stable socioeconomic condition; (iii) logistics system are right appreciated from the beginning of national development; (vi) Government have right direction, right and properly strategy and Government themselves participated in the development process or strictly supervise to ensure for right implementation of logistics development strategy. Singapore’s investment strategy focused to modern, quality improvement, concentrated investment (to airport, sea port, warehouse and Logistics Park instead of spread out to many fields). Singapore also implement various measure such as develop local network, create attractive economic and institutional environment to attract foreign investor, increase saving, mobilize capital, human resource and investment to logistics, increase logistics demands and supply by tax policies, develop human resource, promote power from private sector. 2.4.2. Malaysia case The most important that make good condition for development of logistics in Malaysia is right awareness and the role of Government. Malaysia government has determination to develop national logistics by many measures (both directly and indirectly) to evenly and quickly develop elements of national logistics system. However, because of starting later and having very large territory, Malaysia could not invest to infrastructure and communication system to meet modern standard. Malaysia do not have depth 14 port so that could not develop logistics related to marine and could not be able to compete with Singapore on this side. 2.4.3. Thailand case Fast growth rate of Thailand’s economy in period 1980 - 1990 is good condition for development of transport infrastructure as basement for logistics development. In addition, change in awareness about important role of logistics have help Thailand Government to have plans and strategy to develop logistics and get some remarkable developments. However, in beginning of XX century, Thailand Government do not have properly change in strategy, do not pay proper attention to develop human resource as well as communication infrastructure and Thailand have deal with many problem with influences from the unstable politic. Those problems have held back the logistics development of Thailand. CHAPTER 3 LESSONS FROM EXPERIENCES OF STUDIED ASEAN COUNTRIES AND PROPOSED RECOMMENDATIONS FOR LOGISTICS DEVELOPMENT OF VIETNAM 3.1. The current situation of logistics development of Vietnam 3.1.1. Logistics infrastructure of Vietnam Both physical infrastructure and communication infrastructure of Vietnam are still very weak. The assessment result on infrastructure 2012 by WB shown that Vietnam are weak in all aspects, especially in infrastructure with high rate of assessment remark “bad” (84,6% for railway, 69% for road, 53,8% for airport, 53,8% for warehouse and hubs) and 25% assessment claim that cost and fee for infrastructure is very high. The quality of infrastructure services has been assessed as “not good” (100% for marine line, railway, warehouse, hubs, 85% for road, 92% for airline). 3.1.2. Logistics institutional framework 15 Regulations related to logistics are not clear, not tight enough, improper with logistics and overlapping. The LPI of Vietnam show that customs clearance procedure is not transparence (70%), not identical (77%), custom officers are not well support for business man (85%). 3.1.3. Logistics providers Company that provide logistics services have many issues such as (i) small scale, (ii) operation is in local market, (iii) almost activities are work under authorization of foreign LSP, (vi) poor human resource (low quality and small quantity), (v) weak communication infrastructure, (vi) lacking of incorporation, support each others event having unsound competition. 3.1.4. Logistics service user - Business and manufacturer Demand for logistics in Vietnam is very low because reasons as: low level economic development, low level of division of work in human resource, routine of self-operation in logistics work, anxiety about ability to reduce cost, anxiety about quality of services. In addition, the routine of Vietnam enterprise in international trading is “FOB for sell, CIF for buy”. 3.1.5. General assessment 2012 LPI of Vietnam is in average level as 3 point (in 5) and ranked in 53 position in the global ranking of WB, below Thailand (38), Malaysia (29) and Singapore (1) Table 1 - LPI of Vietnam in comparison with studied countries - 2012 Country Rank LPI Customs Infrastruct International Logistics Tracking & ure shipment competence Tracing Timelines Vietnam 53 3.00 2.65 2.68 3.14 2.68 3.16 3.64 Singapore 1 4.13 4.1 4.15 3.99 4.07 4.07 4.39 Thailand 38 3.18 2.96 3.08 3.21 2.98 3.18 3.63 Malaysia 29 3.49 3.28 3.43 3.4 3.45 3.54 3.86 Source: LPI reports 2012 - World Bank It could be said that Vietnam is under developed and imbalance in logistics development. The lowest indexes in LPI of Vietnam are customs, infrastructure and logistics competence (under average). Causes of weakness: 16 First, awareness about role, importance of logistics in business and economy development is very limited. Second, logistics infrastructure is poor, not synchronous, having a high cost and improper along with deficiency of warehouse and inland port. Third, communication infrastructure is not synchronic and poor service quality. Forth, institutional framework is not propitious for business in general and for logistics in particular. Vietnam does not have policy supported for logistics, does not have long term, comprehensive and synchronic strategy. Policies related to customs clearance are unpropitious for business and logistics. Vietnam does not have a specific government agent or board for logistics to play a role of leaders as Singapore, Malaysia and Thailand. Fifth, Vietnam does not have qualified human resource. Sixth, the practices of self-provide of transportation, warehousing, human resource, loading and shipping as well as “FOB for sell, CIF for Buy” narrowed the logistics market and inhibited logistics development. 3.2. Lessons drawn for Vietnam from logistics development experiences of Singapore, Malaysia and Thailand. 3.2.1. Having right awareness about logistics important role in economic development. Only right awareness about importance of logistics could help Vietnam Government to define right development strategy. Experiences from 3 studied countries show that the sooner focus to logistics development, the stronger competition capacity will be gained with more chance to obtain stable development target. 3.2.2. Establish and develop synchronous physical infrastructure, create condition to link multimodal transport methods Physical infrastructure require great investment and long time to be established and develop, so that it would have a flexibility in national sources mobilization and coordination in which the participation of private sector should 17 being encouraged. Source from private sector are re-arranged by government to logistics support activities such as warehousing, purchasing load-unload equipment, modern packaging line, high volume transportation means. 3.2.3. Physical infrastructure development should associated with communication infrastructure In modern logistics, soft infrastructure day by day expresses its importance as key factor in national logistics performance and soft infrastructure should be one of prior aspect in logistics development. Investment in communication infrastructure should be comprehensive, modern from starting and should be in cooperation with education and training for application. 3.2.4. Create propitious institutional framework for logistics The infrastructure affect to the growth rate of development of logistics when the institutional framework affect to scale and stable development of logistics. It is necessary to have stable politic and socioeconomic environment, to enforce and perform propitious policies for logistics, especially customs clearance policies, and directly favorable policies for investment in logistics. 3.2.5. Develop national logistics through develop logistics market, and increase logistics supply and demands Along with encourage policies for investment and attract foreign investment into logistics, three studied countries have highly attention to education to improve awareness of business and manufacturer about logistics. Supply and demand of logistics increased will bring opportunities for strong development of logistics and make logistics operate efficiently. 3.2.6. Define direction and schedule to develop logistics base on condition and national economic potential Definition the direction for logistics development should be considered with national economic potential as well as national position in regional and global logistics system. 3.2.7. Define schedule for logistics development with proper phases considering to long term development. 18 Logistics development should base on investment schedule in phases but should ensure the long term development possibility, especially linkable of infrastructures possibility in the future. 3.2.8. Training human source for logistics development Logistics sector require high qualified human resource so that proper guidelines and support for human resource training and education from government will make good condition for logistics development. 3.2.9. Government should play a leading role in logistics development. Government have very important role in logistics development progress. Government is the only person who have enough capacity, power and condition to be responsible for (i) building up infrastructure, (ii) creating propitious institutional framework for logistics development, (iii) stabilizing politic and socioeconomic. 3.3. Recommended direction to develop logistics in Vietnam First, logistics development should connect and participate into regional logistic system. Second, investing to logistics for renovation and upgrading instead of investing for new construction. Third, develop railway and road infrastructure in a shape of fish bone model with main North-South main line and braches; develop marine transportation as a hubs for big ships to loadunload and in middle scale enough to be distribution center for mid and small ships; develop support system as inland port, hubs, connection point to enhance performance of logistics system. Forth, modernize logistics system base on communication development and high qualified human resource. Fifth, create environment for logistics development. Sixth, Government should not only define direction and promote but directly participate in implementation of logistics development plans. 3.4. Recommendations for Vietnam’s logistics development 3.4.1. Recommendations related to enhancing the role of Government 3.4.1.1. Innovate the awareness of Government and people participating in logistics operation, strengthen the role of Government. 19 Vietnam Government should aware that logistics is prior sector because it is a powerful tool to develop national economy and it should be scheduled to perform. Government should actively and directly involve in setting-up process of national logistics elements. Improve awareness of business through technical assistant program por business administration training courses (as experiences of Thailand and Malaysia) and through public multimedia supported by government. 3.4.1.2. Planning and prepare human and physical resources for creation and implementation of logistics plan. Vietnam should have plan for logistics development with detail individual phases. The proper schedule for Vietnam case is adjustable 5 years plans. Government should establish an in-charged board for national logistics development (with participation of experience logistics experts and experts from related ministries), arrange national budget for necessary work and looks for additional funding from loans and aids. By the middle of 2015, all conditions of human and finance source should be feasible. 3.4.2. Recommendations related to developing logistics infrastructure 3.4.2.1. Invest to develop transport infrastructure Transport infrastructure should be invested in direction of increasing linkage capacity. It is not necessary to construct new roads or expand current road system but the investment could be focus to hubs point and warehouses. Transportation should be operated in multimodal transport method. Vietnam could invest to build up infrastructure connection points as: parking place for heavy trucks at border gate and at connection point of local road with ASEAN highway network, connection point between roads and airport, stop point at connection between main national highway and other roads, in-land container depot at road-railway, railway-railway connection points (attend to tempavoiding sections in North-South railway). Logistics Parks would be created in 3 20 main economic areas of Vietnam as in North, Middle and South. These connections do not have to have large scale and area but should be well equipped and have good management system to ensure high capacity and quick cargo handling as well as reduce cost. 3.4.2.2. Invest and encourage for the application of information technology Government should create an information technology development strategy include development of data base system and network that support for business and electric data communication. It is more important that Vietnam Government should set up a national standard for data in accordance with international standards. Government could provide direct supports for business to apply information technology into their operation. 3.4.3. Recommendations related to establishing and adjusting institutional framework to make propitious environment for logistics development 3.4.3.1. Create institutional framework to adjust logistics activities in a consistent manner It is necessary to amend and supplement the Commercial law 2005 and create regulation system, diagnostics rules for logistics to improve the transparency and comprehensiveness to ensure commitments of ASEAN integration process, enforce special encourage police for logistics development. That complicated work could be well performed base on experiences learned from Singapore, Malaysia and Thailand in combination with advisories of specific forum guided by Government. 3.4.3.2. Modernize customs clearance and other border procedures Government should support for Customs to build up a customs computer system and create a new set of document forms. This document should synchronized, suitable for multimodal transport, in appropriated with other countries in region and could be used for customs clearance at border, port and airport. Customs stations should be upgraded and expanded. Regulations for 21 inspection at stock and interchange procedures should be completed and motivated customs teams could be established to perform that procedures. 3.4.3.3. Issue incentives policies to promote investment in logistics Government should issue policies to prior promote for foreign investment in logistics sector to make propitious condition for foreign LSP join into Vietnam’s logistics market and special incentives policies for well operated companies and companies that could have commitment for longterm operation in Vietnam. 3.4.4. Other recommendations In addition, to create condition for logistics development, Vietnam Government should involve in improve quality of human resource. Also, Government have responsibility to maintain stability of politics and socioeconomic, anti-corruption, harassment, prevent exact in the management of logistics operations, promote the strength of Logistics Association, strengthen the propaganda and education on the logistics through mass media. CONCLUSION With the purpose to learn lessons from the experiences of developing logistics in Singapore, Malaysia and Thailand and to propose recommendations to develop Vietnam logistics effectively, dissertation focuses on clarifying the following issues: The dissertation have scientifically interpreted the basic theory of logistics in historical and comprehensive perspective and approach in micro angle to make the concept of "Logistics" being understood explicitly, thereby clearly point out the important role of logistics in business operation of enterprises in particular and the whole economy in general. From the commentary in the micro perspective in combination with studying the formation and development of logistics services, the dissertation has shown contents of national logistics 22 development on the macro level. To develop national logistics in order to create most favorable and optimal conditions for most effectively operation of logistics in enterprises, it is necessary to impact to all 4 elements of the national logistics system, which are: Logistics infrastructure, logistics institutional framework, logistics service providers and logistics service users. The dissertation have assessed logistics development in three ASEAN countries as Singapore, Malaysia and Thailand based on in-depth analysis of 4 elements of logistics system combined with LPI index analysis in order to points out the cause of the successes and limitations of logistics development in each country. The analysis results indicated that the natural conditions and the socioeconomic stability are essential to develop the national logistics but the logistics development direction and right awareness, the participation of government is most important factors that affect to the speed and efficiency of logistics development. The experiences of studied countries bring high valuable lessons for Vietnam in national logistics development progress, including: (1) Having right awareness about logistics important role in economic development, (2) Establish and develop synchronous physical infrastructure, create condition to link multimodal transport methods, (3) Physical infrastructure development should associated with communication infrastructure, (4) Create propitious institutional framework for logistics, (5) Develop national logistics through develop logistics market, and increase logistics supply and demands, (6) Define direction and schedule to develop logistics base on condition and national economic potential, (7) Define schedule for logistics development with proper phases considering to long term development, (8) Training human source for logistics development, (9) Government should play a leading role in logistics development. From general review of the current status of logistics development in Vietnam, the dissertation points out the weaknesses, the problems still exist and the underlying cause of the weakness in logistics development in Vietnam. 23 To help Vietnam to get quickly logistics developments, the dissertation, base on lessons learned from logistics development in Singapore, Malaysia and Thailand, propose 4 recommendation groups include: (1) Improve the role of government (awareness innovation, strengthening the role of government, planning, preparing human and physical resources for the creation and implementation of logistics development plan) , (2) Logistics infrastructure development (investment in transport infrastructure development, investment and encourage for application of information technology), (3) Creation and adjustment institutional framework in order to create an environment for logistics development (macroscopic institutional framework creation, customs clearance and other procedures modernization, issued preferential policies to promote investment in logistics ) and other proposals related to human resource development and facilitating indirect support for logistics operations. The proposed recommendation focused to solutions to develop 4 elements of the national logistics system. In a condition of under logistics development, the importance of Government of Vietnam is on increasingly in national logistics development promotion. However, within the research framework with limited materials and very few opportunities to directly interview managers, policy makers, users and logistics supplier caused by long distances between Singapore, Malaysia, Thailand and Vietnam, the researcher could not make more in-depth analysis in some aspect. The researcher hopes to have condition to more in-depth analysis further studies./. 24