Domestic textile enterprises and logistics service providers of Vietnam should work together to reduce costs and improve their competitiveness, said Nguyen Tuong, Vice Chairman of the Vietnam Logistics Association (VLA). The textile industry needs to import raw materials from abroad and export products to foreign markets, he observed.

By working together, many enterprises could purchase raw materials by combining their orders to create a large shipment which will help to significantly reduce transportation costs, he added. The costs of logistics currently account for nearly one-third of the costs of each textile product exported, so the Vietnamese garment sector could save more than US$1 billion per year by reducing this cost.

Presenting a different story, Truong Van Cam, Vice Chairman of the Vietnam Textile and Apparel Association said that most textile companies currently perform outsourcing jobs causing them to depend on the supply of raw materials and transportation services of providers assigned by their partners. Most of these providers are foreign companies, thus the market share for local logistics companies has been narrowed, he said.

Director of the Vietmam Co Ltd, Nguyen Duc Chuong, said that during peak seasons, textile firms have to pay the container imbalance charge (CIC) – a kind of sea freight charge which a carrier requires to offset costs arising from the transfer of a large amount of empty containers from one place to another. This charge is only affordable to enterprises with large-scale import-export orders, such as Nha Be Corporation or Viet Tien Garment Joint Stock Corporation, but is a heavy burden on small and medium-sized textile firms.