Objectives of the research: To clarify the scientific basis (both theoretical and practical basis) of proposed solutions to develop city logistics system within Hanoi in relation to the promotion of a stable and long-term economic development.
MINISTRY OF EDUCATION AND TRAINING MINISTRY OF INDUSTRY AND TRADE VIET NAM INSTITUTE FOR TRADE DANG THI THUY HONG DEVELOPMENT OF CITY LOGISTICS SYSTEM IN HANOI Major : Commerce Code : 62.34.10.01 SUMMARY OF DOCTORAL THESIS IN ECONOMICS HA NOI, 2015 THE THESIS IS COMPLETED IN VIET NAM INSTITUTE FOR TRADE MINISTRY OF INDUSTRY AND TRADE Supervisors: 1. Asst. Prof. Dr. NGUYEN VAN LICH Viet Nam Institute for Trade 2. Dr. HOANG XUAN HOA Department of General Economics Central Economic Commitee The thesis will be protected against termination at Institute Level Thesis Council Meeting at the Vietnam Institute for Trade Ministry of Industry and Trade Address: 46 Ngo Quyen Street Hanoi Time: hour date month year 2015 The thesis can be found as at: 1. The Ha Noi National Library 2. The Library of Viet Nam Institute for Trade INTRODUCTION 1. The necessity of the research Vietnam is entering a critical phase of urbanization process that is correlative to the current economic development, Vietnamese government has been placing a considerable emphasis on the upgradation of urban systems in major cities across the country, especially Hanoi which is representative of the country with many honorable traditional values. Pace of urbanization of Hanoi is much faster than other cities all over the country and it has even reached the equivalent rate of urbanization in many cities of Asian developed countries. This urbanization process has brought about many progressive outcomes such as: high rate of economic growth, solutions for unemployment dilemma, better income and improved living standard of urban residents… Besides, Hanoi has been badly affected by the consequences of this urbanization such as the disparities in culture and economic prosperity between classes of people; continuously broken down transportation infrastructure, disrupted living environment; traffic jam, traffic accidents and serious environmental pollution… The problem set out for Hanoi nowadays is to harmonize the benefits and the negative impacts of the urbanization ensuring an ideal business environment while minimizing its adverse environmental effects and improving human wellbeing. Moreover, Hanoi is one of important economic and trade gateways among Vietnam, China and other countries. Since 2005, the governments of Vietnam and China have jointly launched the idea of the formation and development of “Vietnam China Economic Corridor”. The development of this economic corridor will convert Yunnan and Guangxi from a sheer trade gateway between Vietnam and China into a trade gateway between China and other ASEAN countries through Vietnam All these impacts require a modern city logistics system in Hanoi which should be inevitably established, developed and synchronized in all system elements with a view to improve the efficiency and competitive advantage as well as to enhance the image and status of Hanoi in the region and all over the world. For years, the city logistics system in Hanoi has made significant breakthroughs creating favourable conditions for the development in short, medium and long term. Firms that provide city logistics services has grown in terms of both quality and quantity. However, the development of city logistics system in Hanoi is still at the early stage of the whole development process and is not paid a due care and attention It is necessary to have a basic and synchronous research on the city logistics system in Hanoi thereby proposing overall solutions in both macro and micro terms in order to develop city logistics system in Hanoi. The selected topic: “Development of city logistics system in Hanoi” is appropriate for the development requirement of Hanoi in the era of international integration 2. Objectives and Missions of the research * Objectives of the research: To clarify the scientific basis (both theoretical and practical basis) of proposed solutions to develop city logistics system within Hanoi in relation to the promotion of a stable and longterm economic development * Missions of the research: Interpretation and systematization of theoretical issues of the city logistics and the development of the city logistics system Analysis of the current situation; assessment of the success and limitations in the development of the city logistics system within Hanoi in recent years in relation to the promotion of stable and long term economic development Research on factors that exerts an influence on the development of the city logistics system within Hanoi Recommendations on directions and solutions to develop city logistics system in Hanoi in the upcoming years in the orientation towards promoting the stable and long term economic development till 2030 and the vision to 2050 3. Subject and Scope of the research * Subject of the research Theoretical and practical issues of the development of city logistics system within Hanoi with all factors in relation to the stable and longterm economic development of Hanoi * Scope of the research Approach: Development of city logistics system in Hanoi Content: Development of city logistics system in Hanoi Time: Baseline study of the development of city logistics system in Hanoi focusing on the period from 2008 (the expansion of Hanoi) till now. 4. Research Methodology This thesis uses the methods of dialectical materialism, historical materialism and other methods such as inductive methods, deductive methods, comparative methods, desk research, research in the field, sociological investigation, synthesizing, analyzing and evaluating the investigation results to analyse the contents that are related to the theoretical basis as well as the situation of baseline study of the city logistics system development in Hanoi in order to fulfill all objectives set out. 5. New contributions of the research Firstly, the thesis uses new approaches to the development of city logistics system in Hanoi in relation to the promotion of a stable and longterm economic development of the city Secondly, the thesis conducts research on the experience of developing city logistics system in many major cities in the region and over the world to draw valuable lessons with a view to apply these to the city logistics system development in Hanoi nowadays Thirdly, the thesis analyzes and assesses the situation of city logistics system development in Hanoi in a comprehensive manner and covers all aspects based on the latest data released and the result of the survey conducted by the researcher Finally, the thesis suggests directions and proposes solutions to develop the current city logistics system of Hanoi in an orientation towards promoting a longterm and stable economic development until 2030 with a vision to 2050 6. Structure of thesis content Besides the Introduction, Overview and Conclusion, this thesis is structured into three chapters: Chapter I: The basics of the development of the city logistics system Chapter II: Situation of the development of city logistics system in Hanoi. Chapter III: Solutions to the development of city logistics system in Hanoi till 2030 and the vision to 2050 AN OVERVIEW OF CITY LOGISTICS SYSTEM With a continuously growing trend of urbanization all over the world, the role of urban areas in the longterm and stable economic development of all countries has been markedly confirmed. City logistics becomes a field of reseach that attracts the researchers’ attention all over the world. Among them can be mentioned “City Logistics”, “Logistics Systems for Sustainable Cities” and “City Logistics: Mapping the Future”… of Taniguchi E, Thompson RG and Yamada T or “Sustainable Urban Logistics: Concepts, Methods and Information Systems” of Jesus Gonzalez Feliu, Frederic Semet ́ ́ and Jean Louis Routhier… All of these are indepth studies of the city logistics and city logistics system. In these researches, in addition to presenting theoretical issues (concept, characteristics, benefits and roles of city logistics…), highlighting the recent development and improvement of the city logistics which is considered to be a completely new field of urban research and management, the authors also focus on the formation of models of developing the city logistics system. However, as far as I’m concerned, there has never been any systematized and comprehensive research on city logistics system for urban areas of Vietnam in general and Hanoi in particular. Hence, studying rationale and situation of city logistics system development in Hanoi thereby proposing solutions to development is an imperative task now CONTENT AND RESEARCH RESULT SECTION CHAPTER 1: BASIC THEORETICAL FRAMEWORK OF THE DEVELOPMENT OF CITY LOGISTICS SYSTEM 1.1 SOME BASIC THEORETICAL ISSUES OF THE DEVELOPMENT OF CITY LOGISTICS SYSTEM 1.1.1. Inevitability of city logistics The past recent years have seen a significant development of major urban centers of Vietnam in terms of size, quality and quantity. The urban system has created a new image for Vietnam, specifically the modern and civilized living space facilitating the citizens to improve their living standard. Residents and resources have a tendency to move to urban areas with a view to find jobs and search for a better life. This is placing a great burden on the transportation of the city due to the absence of adequate and appropriate logistics development policies. However, it is a fact that freight transport plays a critical role in the structure of the modern society and it is indispensable for maintaining the human modern life. And the role of goods transport becomes much more significant in big cities because of high demand of goods consumption there. However, today, transportation in urban areas is facing various nuisances such as congestion, increased traffic accidents, progressively polluted environment due to harmful emissions from means of transport Besides, transport system is also an important component of the city logistics system because the city logistics system quality is a key factor affecting the growth rate of the economy, creating favourable conditions for goods circulation, lowering product costs, limiting traffic congestion and minimizing detrimental environmental pollutions… It has been shown by practice that city logistics system development is imperative in the period of modern marketoriented economy of the country, especially for big cities 1.1.2. Concept of city logistics The birth and development of modern cities is the outcome of the evolution of the human society. A city with advanced infrastructure and information technology together with a modern transport system possesses a high potential for the transition into a center of distribution, processing and consumption of goods. City logistics, with the goal of building an advanced and modern transport system is a relatively young field of research but has made a great development in recent decades is grabbing high attention of researchers, learners, policy makers and is considered as a key factor to promote the stable and longterm development of the city in terms of livelihood, society and economy. Since its inception, there are many definitions of city logistics based on different viewpoints of researchers and experts. However, up to now, there has no agreed definition of city logistics. Thus, in the viewpoint of the researcher, city logistics may be defined as “the process of optimizing the planning, implementation and monitoring of the effectiveness of the circulation of people, goods and related information in Hanoi through the application of modern information system to improve the people’s living standard and promote the longterm and stable development of the city” 1.1.3. Characteristics and role of city logistics 1.1.3.1. Characteristics Addition to the common characteristics of the logistics in general, city logistics possesses some distinctive features as follows: (i) City logistics operates in the city space but it is not a closed system but it has a strong connection with national logistics, regional logistics and global logistics; (ii) City logistics have a crutial importance to the smooth flows of goods distribution from, to and within the city. Accordingly, it can be easily seen that the distribution network of the city has a relatively narrow operational territory and this is a huge difference between city logistics and regional logistics or global logistics; (iii) Road transportation is an important mode of transportation and is the most suitable means to perform the functions of city logistics. In some cases, transport by inland waterways and railways is necessary, however, basically, other means of transport such as by air or by sea is not involved; (iv) City logistics is characterized by the diversity of goods carried, delivery of high frequency and often in small volume; (v) The development of city logistics is considerably affected by the planning of socioeconomic development and various regulations of municipal government. The lack of organization and centralized management, roundabout transportation and oneway transportation have caused many serious disorders to the transportation system such as congestion, traffic noise and traffic accident 1.1.3.2. Roles of city logistics in the development of major urban areas City logistics is regarded as a strategy to ensure the effective and creative freight distribution within the city which is attracting a lot of attention due to its important role in the stable and longterm development off the city as follows: (i) City logistics contributes to enhance the efficiency of the supply chain, minimize time and cost spent for logistics, improve the customers’ satisfaction and values added to the customers ; (ii) City logistics helps reduce troubles related to goods transportation at urban areas; (iii) City logistics contributes to improve the management effectiveness, costcutting in the production process and enhance the competitive advantages for the enterprises; (iv) City logistics helps to settle urban environment related issues, improve the capability of the city logistics services, thereby promote the stable and longterm development of the city; (v) City logistics accelerates the rate of circulation and distribution of goods in national logistics system, stimulate the smooth flow of information and investment driving the national economic development towards regional and global economic integration; (vi) A developed city logistics system will enlarge the opportunity of the city in attracting Foreign Direct Investment (FDI), thereby creating more jobs for workers in the city 1.2 CONTENT OF CITY LOGISTICS SYSTEM DEVELOPMENT AND EVALUATION CRITERIA 1.2.1. Concept of City Logistics System System is a closelyorganized structure with a common goal and can be considered as “an integrated whole” including many elements that directly or indirectly interact with each other to maintain operation and survival as well as to create the emergence of new characteristics, namely “emergence” of the system which each individual element does not have or hardly have. So city logistics should have all characteristics of a system in general. Currently, city logistics system can be approached in the following ways: In a broad sense, city logistics system can be regarded as an integrated whole that includes many subsystems such as: legal mechanism system, infrastructure system, human resource, logistics services providers (LSP) and consumers within the city. Each of these sub systems is influenced by a large number of factors, so city logistics system is a complex system and affected by many factors In a narrower meaning, city logistics system often refers to logistics activities ensuring the materials for production, distribution and consumption of the products as well as all their 14 applied computerization in administration such as barcodes or warehouse software management programs 2.2.3. Development of Logistics Service Providers (LSP) New economic environment, the expansion of international trade cooperation has led to the operation of the Vietnamese economic in general as well as in Hanoi became vibrant and bustling. To meet the amount of import and export goods are on the increase, in recent years, a number of LSP were launched. Although there are no official statistics, but today in Hanoi there are about 450500 LSP operating in the logistics sector. There are tens of thousands of businesses in the city which are related to logistics field. Hanoi businesses are not only forwarders and shippers but also do all the work of storage, labeling, packaging and customs clearance However, most LSP are small and software applications and information technology is not common, that lead to poor competitiveness. Therefore, LSP in Vietnam in general and Hanoi in particular is still largely act as "satellite" for foreign LSP, only to take on some stages in the chain of logistics activities such as customs procedures, rental vehicles, warehousing. 2.2.3.1. Development status of transport services The most popular logistics services in Hanoi is transport services that accounts for about 6070% of the total revenue of the general logistics services. Number of vehicles and cargo volume increased rapidly in recent years. Therefore, transport capacity in Hanoi is constantly rising to meet the transportation needs of businesses Road transport: This is the main form of transport in Hanoi. However, there are still many shortcomings in this form of transport such as: the low ability to maintain and develop the roads, the roads are not designed for containers, old specialized truck teams, many roads have been downgraded and are not connected completely. Rail transport: This transport has many advantages compared to some other mode of transports. However, the rate is still very low in both freight and passenger transported by railway line as transport capacity is not being utilized effectively, the infrastructure of the railway sector has outdated, slow to improve Waterway transport: Cost of water transport is lower than other modes of transport and large amounts of goods can be carried. However, there are still many shortcomings in this form. Many inland waterways in the city have not been dredged, rivers are filled up, that make the medium sized vessel can hardly move. In particular, many waterways are not navigable for ship to pass through. Air transport: the safe, common and convenient mode of transport, associated with air 15 transport market in the world as well as the region. Until now, many famous airlines have already plans to open new international routes, leads to the higher rate of air transport from/to Hanoi. However, at present, the proportion of goods transported by air is still a modest figure due to the high cost and limited material facilities. Also, Hanoi does not have routes as well as specialized planes 2.2.3.2. Development status of goods distribution services The system of goods distribution in the wholesale and retail market in particular achieved many important accomplishments. The economic sectors involved in the network of wholesale and retail trade, various commodities are more diverse and richer, better satisfy the needs of consumers. Besides the type of traditional wholesale and retail, the forms of modern wholesale and retail has been growing strongly in the city. Commercial infrastructure in Ha Noi is constantly invested and expanded. On May 8/2013 , there are about 25 commercial centers, 121 supermarket and 414 large and small markets. Goods distribution services in Hanoi have developed in a high speed, in general retail distribution system in the province is still fragmented due to various small types of sale and retail traders, not organized into the system; large number of supermarkets, but the distribution is uneven. There are very few distributors are strong enough to control and dominate the market There is no tight linkage between production and imports and consumers; ability to control the price of firms is weak. 2.2.3.3. Development status of merchandise exchange services Service delivery in the city takes place primarily in the center of circulation such as airports, train stations, river ports, dry ports Delivery demand becomes necessary in the economic growth in Hanoi. This is shown through the increase of the number of firms operating in the sector of transportation as well as the volume of freight traffic on the city over the years with an average growth rate of about 6.3% annually 2.2.3.4. Development status of customs services The past year, Hanoi Customs Department has developed and implemented numerous plans and reform programs to gradually renovate and modernize customs procedures, immediately focus on investing modern equipments , step by step application of modern information technology in the working stages of customs operations with research, improving customs procedures to shorten customs clearance time, create an favorable environment, while ensuring strict management requirements for import and export activities, attracting foreign investment in the city. However, the effectiveness of the reform process of custom procedures is still very limited and the process is still too slow in comparison with the trends 16 as well as general development requirements of the region and the world. 2.2.3.5. Development status of warehouse services Warehousing services in the city of Hanoi today is quite diverse, including storage dealers and rental service; bonded warehousing services; service containers, container formats storage services Over the years, the storage services incessantly grows. Whether achieving good growth but in general, transportation services, warehousing services still play a very modest proportion (approximately 6% /year) in the overall GDP of Hanoi, not yet demonstrated their role in the economic development of the city There are still many shortcomings in warehousing services, such as lack of professionalism in the delivery, warehouse layout system is not fair, most of the storage system at the port in Hanoi was built a long time ago so the quality of warehouse is downgraded, obsolete, warehouse management is not applied the techniques of modern science. 2.2.3.6. Development status of other services: In addition to the services mentioned above, in today's world, the logistics company also provides a number of support services such as quarantine, inspection, cargo insurance, purchase protection, packaging, packaged goods, purchasing insurance for goods on behalf of customers (if required) . By such specialization, the production enterprises, the business will save a lot of cost and time to focus on the production of their own. 2.2.4. Development status of enterprise using logistics services With the advantage of the national second largest center of economy and the largest country in the North, Hanoi has a leading role in organizing the circulation of goods in the north and the country. According to the statistics of Hanoi, the total value of production of all economic sectors in Ha Noi constantly is increasing over the years, the total volume of freight traffic in Ha Noi increased, demand of transportation, forwarding and logistics are widespread. It can be seen that demand of outsourced logistics services in Ha Noi is although potential but still modest: 29.5% enterprises not wishing to outsource logistics services as the main business activity of the company is not in need of logistics service, 29.5 % said businesses not use logistics services is due to not trust the quality of services and businesses take 61.1 % said that they were able to self perform the logistics services 2.2.5. Current status of logistics human resource The strong growth of the global logistics sector shows that skilled manpower is extremely important factors for the development of logistics services effectively. Human 17 resources for city logistics services are still limited in both quantity and quality. Most people who participate in city logistics businesses today are lack of knowledge, is not equipped with the business skills in this particular type. 2.3 OVERALL ASSESSMENT OF DEVELOPMENT STATUS OF CITY LOGISTICS SYSTEMS IN HANOI 2.3.1. The results of the city logistics system development Important contribution, promote the development of production and trade, improve the efficiency of development and international economic integration of the city Enhance economic social efficiency of the city and transformation of growth pattern and creation of favorable conditions for the production, circulation and distribution of goods. Contribute a large share of the GDP growth of Hanoi Facilitate the process of circulation, distribution to be transparent, accurate and secure, reduce transportation costs, social costs, so that goods are brought to market quickly, consumers can buy goods at more convenience and flexibility. A team of dynamic, large logistics human resources is formed initially, gradually adapting to the market economy, professional qualifications are rising day by day Achieve breakthrough results in the reform of administrative procedures. The number and types of administrative paperwork as well as the time of receiving, processing of several city agencies, such as tax, customs, environment is simplified greatly. The customs clearance of businesses have become convenient, fast, helps businesses save time, effort and money, thereby supporting to boost business activities of enterprises with foreign partners Establish a legal framework is relatively sufficient to create comfortable environment for city logistics system development. And especially, recently government and the city government have added more normative acts to promote the development of city logistics system Over the past year, Hanoi authorities cooperated with the Ministry of Transport have extremely interested in city logistics system through enhanced synchronous development, continuous transportation infrastructure for all modes of transport 2.3.2. Limitation of the city logistics system development City logistics is still consistent with forwarding activities, traditional transport and outsourced city logistics has yet to become a habit of businesses Lack of connection between importexport businesses and LSP. LSP in area only 18 provide traditional services, single, primarily operate as agent for the foreign corporations. Business situation in a "grab" unfair competition still regularly occur, creating a bad precedent for foreign firms Other costs such as administrative costs, paperwork, loading and unloading costs are high Lack of coordination between transports has increased the number of vehicles in traffic, causing traffic jams, impede the development of cargo distribution and circulation systems in the area Environmental pollution is becoming serious The shortage and weakness of human resources also impact negatively on the business activities in Hanoi Currently, the city logistics enterprises were used to recruit human resources from the input and selftraining after recruitment but hardly received any training assistance from the government, the municipal government Intelligent Transport System, the software of modern technology have not been applied commonly or applied but not often 2.3.3. The cause of the limitations The system of legal mechanisms is asynchronous and Hanoi does not have a specific policy mechanism to the development of logistics in general and city logistics system in particular Ability to mobilize the investment resources for city logistics development remains low, especially in the logistics infrastructure of the city, the type of logistics services in the city grow slowly, low competitiveness and costs are high The potential of the Hanoi business enterprises in the logistics sector is limited, mainly 2PL logistics enterprises. Most of the freight forwarding companies in the city are small and medium scale. Limited cooperative, association, and funds lead to the limited potential of city logistics system development Many agencies, regulators, businesses are not fully aware of the importance of the city logistics system development for the local economy as well as the country Qualifications of logistics services human resources as well as city servants mostly fail to meet requirements. Their knowledge of the market and city logistics is limited and not professional The training of logistics human resource has not been cared There is no specialized logistics department in universities The development of logistics sector in the city has not received proper attention. The 19 protection of the environment from the improvement of efficiency in exploiting logistics infrastructure, the establish of logistics center to connect all means of transport to the construction of city highways as well as the technical policies and standards are not fully focused Many exporters are still holding FOB practices. Import sector is an opportunity for LSP when importers buy FOB. However, much of this pie has been in the hands of foreign LSP by most importers are FDI firms The system of logistics infrastructure in the city is inconsistent and underdeveloped. Although there has been a certain renovation and upgrade but it can be clearly seen that the traffic infrastructure in the city is poor, technical standards are low and outdated The impact of the economy in the world and the region, the unpredictable fluctuations of market of goods and services over time also profoundly influenced the development of Hanoi logistics system. CHAPTER 3: SOLUTIONS TO THE CITY LOGISTICS SYSTEM DEVELOPMENT WITHIN HANOI IN THE NEAR FUTURE 3.1. OUTLOOK FOR THE SOCIOECONOMIC DEVELOPMENT OF HANOI TO 2030 WITH A VISION TO 2050 AND PERSPECTIVES, TARGETS AND ORIENTATIONS OF THE CITY LOGISTICS SYSTEM DEVELOPMENT WITHIN HANOI IN THE NEAR FUTURE 3.1.1. Outlook for the socioeconomic development of Hanoi to 2030 and 2050 vision 3.1.2. Objectives, perspectives and orientations for the city logistic system development till 2030 and the vision to 2050 3.1.2.1 Development Perspective Consider city logistics as one of key infrastructure services with a lot of competitive advantages and the motivation for socioeconomic development Develop city logistics as an important economic sector that has many competitive advantages and the driving force of the socioeconomic development Develop a city logistics system with a modern and synchronous structure and ensuring the capacity for a large scale in terms of volume, space and time 20 Develop fast, stably and have a longterm vision of the city logistics system both in terms of economy, society and environment The development of the city logistics system should be based on the participation of all economic sectors and industries and be consistent with the planning of the socioeconomic development to promote the socioeconomic development of regional and national economic corridors Promote the widespread and effective application of advanced information technology and communication in the city logistics system to keep up with the development of the countries in the region and around the world 3.1.2.2 Orientations for development Transform Hanoi into one of three major logistics centers of the country and the region, reaching the international level and contributing positively to socioeconomic development Develop focused proposals and programs to serve as the basis for the development of city logistics system according to the natural characteristics and socioeconomic context of the city Propose solutions for the planning of transportation infrastructure development in a synchronous and continuous manner, improve legal framework, formulate a mechanism to attract investment from global and regional corporations 3.1.2.3 Development goal by 2020 and 2030 vision In the coming years, developing the city logistics system to make logistics a key economic infrastructure sector as well as a main service sector will have significant contribution to the economic growth of the city 3.2 SOLUTION TO HANOI CITY LOGISTICS SYSTEMS DEVELOPMENT IN THE FUTURE 3.2.1. Remedy for policy mechanisms of city logistics system 3.2.1.1. Develop a master plan for development of city logistics system in Hanoi until 2030 and vision 2050 Constructing, developing, planning city logistics system in Hanoi to 2030 with a vision to 2050 is necessary and is a big job, requiring the involvement of many different sectors. In addition, the planning and construction of the smaller centers, which are connected with the city's beltway, focal consolidation, warehouse inventory at the regional industry center in Hanoi. Note the development of a dedicated storage as heat storage, cold storage 21 3.2.1.2. Complete and specific the policies of the city logistics system development. Continue to put the law into operation of business practices and in order to achieve high efficiency, studying and learning from the big cities of the countries in the region and the world is necessary However, referring to Hanoi, it is essential to consider the current situation of Hanoi to have appropriate application and avoid stereotyping, hastiness. Quickly develop measures and policies to encourage investment, cooperation and technology transfer, training the logistics staff to create advancing impetus of city logistics system, firstly specify the relevant legislation related to outsource logistics services, standardize service processes Early institutionalize 3PL outsourced logistics services to develop the city logistics services, there should be the policy of logistics sector development 3.2.1.3. Establish interdisciplinary management offices of logistics city. Quickly establish statelevel management offices of logistics services, it could be logistics management section or department in the Department of Industry and Trade. This agency is the bridge between the relevant sectors, between Vietnam Seaports Association and the Association of LSP with businesses located in the city 3.2.2. Solutions to logistics infrastructure development in the city 3.2.2.1. Development and upgrading of infrastructure hardware * For river transport: (i) construction of river transport routes to connect with the sea routes, railways, motorways; (ii) rehabilitation, upgrading and widening and maintenance of canals; (iii) an appropriate system of river ports, inland wharves in critical areas; upgrading and modernization of port infrastructure and motorizing cargo handling systems; (iv) develop the fleet in a diversified direction, with reasonable structure to enhance the capacity of cargo through the port * For rail transport: (i) the rehabilitation, upgrading and expansion of roads, development of civilization in service stations and ports of Hanoi; (ii) extend the rail line to the areas, the center of industrial and export processing zones ; (iii) investing in new vehicles such as locomotives, carriages, wagons especially specialized carriage for faster shipping and cost savings * For air transport: (i) procurement of freighter airplanes, modern loading and unloading and shipping facilities; (ii) establish freight routes to destinations in need of goods shipped to and from Hanoi 22 * For road transport: (i) the improvement and expansion of existing routes up to 4 to 6 lane roads with motor vehicles; (ii) build the highway parallels the highway with heavy traffic; (iii) invest to upgrade, expand and build new axis of traffic, the interchange at the large intersection; (iv) investment in new construction and upgrading, renovating the bus station, park meet transportation needs in the locality; (v) the construction of new public transport route with large volumes as elevated railways and subways, bus When constructing and planning for transportation, it is necessary to take into account the inter connection between modes of transport. In addition, the issue of minimizing the impact to environmental quality should focus as: (i) to plan a reasonable distance between the river ports, railway stations, yards and the surrounding residential areas and zoning buffer between the work of traffic and residential areas; (ii) promote the application of advanced information technology environment friendly as well as encouraging the use of cleaner vehicles or vehicles with clean fuel 3.2.2.2 . Upgrading of infrastructure software Municipal governments and LSP need to hasten the progress of completing a modern information system, a network of large databases should be established to operate as a bridge between the business community and LSP; increased use of EDI communications system for rapid implementation of the customs declaration procedures; investment in application of advanced IT software 3.2.3 . Solutions to development of LSP in the city Strengthening links between firms operating in the city Early formation and development of 3PL enterprises Improving the quality of service provided Diversify the supply of products and services, focusing on the development of value added services Combining more multimodal transport route to reach the target of maximum cost savings and improve service quality Development and consolidation service pack, classification of goods for importexport businesses Provides inventory and distribution service to the correct received address 3.2.4 . Solutions for the development of companies used logistics services in the city Changing perceptions of the role and necessity of outsourcing logistics services by improving their competitiveness, reduce costs and increase profitability of the company 23 Early production enterprises should promote outsourced warehousing and shipping services to save costs. However, businesses need to consider the capacity and credibility of the 3PL company that be selected. A professional unit, prestige will help businesses save costs while ensuring quality of work in the long term. At the same time, the importexport businesses need to use the services of agents of customs procedures will help ensure that work is always operational on time and quality assurance. A reputable professional enterprise will help businesses save costs while ensuring quality of work in the long term. At the same time, the importexport businesses need to use the services of agents of customs procedures to help ensure the progress of work and quality assurance 3.2.5. Solutions to training human resources of city logistics system (i) For the management team: Provide an opportunity for them to participate in advanced courses, intensive workshops on logistics, city logistics in the country and abroad to supplement the knowledge and grasp the opportunities, challenges and new developments trends related to the logistics sector in the region and the world (ii) For professional staff: Provide an opportunity for them to participate in courses of foreign languages, legal systems of the countries in the world, the skills of applying information technology in daily activities In addition, business leaders should also have regular discussions with staff to grasp their needs and aspirations as well as guide employee through selftraining to conform to the overall development objectives of the business (iii) For direct workers: companies need to regularly organizes short training courses in professional skills in enterprise level in order to increase the understanding of the important processes in the chain of logistics services or matters directly related to their daily work Finally, the city government should increase interest and support in building and policy oriented, related to logistics and city logistics sector. Proposal to open the department of logistics, supply chain management, multimodal transport in universities, colleges and trade economy. Moreover, content and training programs to should be updated regularly with international standards 3.3 RECOMMENDATIONS OF PREREQUISITES FOR THE CITY LOGISTICS SYSTEM DEVELOPMENT 3.3.1. Recommendations for the Government Government should create logistics development strategy of Vietnam until 2020, with a vision to 2030; establish the National Commission of Logistics: in order to develop and 24 implement strategy of logistics sector, there should be a formal mechanism of logistics services management in Vietnam Completing the investment policy to develop the logistics infrastructure both "hardware" and "software". Promulgate policies to encourage investment and develop the city logistics system such as investment and development of logistics infrastructure, creating facilities for city logistics system The state should adopt policies to support and encourage private and enterprise investment and wide application of the PPP (Public Private Partnership) The state should invest in research the logistics, logistics services in a systematic way, and disseminate deep and wide knowledge within the industry and businesses, avoiding not thoroughly understood, confusion leads to deviations, ineffective application There should be a solution to sustainably develop the Vietnam logistics market 3.3.2. Recommendations for the Hanoi People's Committee Support and create an transparent environment to synchronously develop the logistics services market and develop the business services Specify policies on development of logistics infrastructure in the city, especially in transportation infrastructure, distribution systems, cargo traffic There is should be investment and development policies of logistics enterprises, support for training and retraining of human resources in the field of business services The construction of infrastructure in the city such as the ring road system, urban roads and bridges in the province should be implemented promptly, connected by the logistics center in the region, ensuring the circulation of goods, reducing circulation costs for businesses and establishments to develop synchrously services, commercial civilization, urban services 3.3.3. Recommendations for businesses Strengthening coordination and links between businesses together Positive, proactive technological innovation, improve the competitiveness of logistics enterprises In the short term, businesses should focus on promoting the image through building websites with more specific content The company also needs proper attention, perception of logistics services The businesses and sectors particular should be interested in training the highquality human resources with deep understanding of regulations and laws within their country and abroad 25 CONCLUSION International economic integration has created both opportunities and challenges for city logistics system within Hanoi. This means that the city logistics firms should enhance their competitiveness to survive and develop in the new era. City logistics is regarded as one of the most important economic sectors which not only brings huge benefits to major urban areas but also plays a crucial role in improving the competitiveness of the nation and of the firms as well Although possessing a huge potential, logistics firms established within Hanoi limits still have a limited capability which makes them difficult to capture and exploit the opportunities and overcome the obstacles and challenges to develop city logistics system, meeting the requirements of the global and regional economic integration. It is necessary for Hanoi to have a strategy to develop the city logistics system with appropriate policies and mechanism for the new development phase from 2014 to 2020 with a vision from 2030 to 2050 of the city. Simultaneously, implementing synchronous solutions and putting a due stress on the investment of city logistics system with a view to turn this service into infrastructure service is very essential to 26 the development of the city Thus, with the goals of developing the city logistics system within Hanoi, the thesis focuses on the following issues: Firstly, the thesis has systematizes and clarifies the rationale for city logistics and city logistics system development such as: concepts, characteristics, roles, content and assessment criteria of city logistics system development. Secondly, the thesis focuses on the experience of developing city logistics system in some major cities in the region and in the world such as Singapore, Hongkong, Tokyo to draw valuable lessons with the aim of developing city logistics system within Hanoi in the future Thirdly, the thesis analyzes and evaluate fully and comprehensively the situation of city logistics systems within Hanoi from 2008 until now with all the elements taken into account. The analysis and evaluation of the thesis indicate that although city logistics have a high potential for developing, but citylogistics system within Hanoi is still relatively limited and has not fully contributed to the economic development of the city Fourthly , on the basis of analyzing all factors that have an impact on the development of city logistics system and the prospect for the socioeconomic development as well as the targets, perspective and city logistics system development orientation in the upcoming years, the thesis proposes a number of solutions to the development of city logistics system within Hanoi in the orientation towards the stable and longterm economic development of the city 27 LIST OF PUBLISHED RESEARCHING WORKS BY THE AUTHOR 1.Dang Thi Thuy Hong (2014), "A number of solutions to the logistics system development within Hanoi”, Journal of Economics and Forecasting 13, pp. 4547 2.Dang Thi Thuy Hong (2014), "Current status and solutions to logistics system development within Hanoi ", Journal of Commercial Research 9, pp. 2024 3.Dang Thi Thuy Hong (2013), "Establishment and sustainable development of national logistics system”, Monograph: Construction and Development of Logistics System in our country, Labour and Social Publishing House, pp. 27 64 4.Dang Thi Thuy Hong (2013), "Solutions to the development of logistics infrastructure of Hanoi”, Proceedings of International Workshop – Mission of bilateral international cooperation, Labour and Social Publishing House, pp. 188 209 Dang Thi Thuy Hong (2013), "An overview of Logistics and Logistics System”, Monographs "Some issues of sustainable development in our country's logistics system in international economic integration", Labour and Social Publishing House, pp. 9 29 6.Dang Thi Thuy Hong (2013), "Classification and Role of Logistics ", Chapter 1 of syllabus "Logistics and Enterprises Commerce", Labour and Social Publishing House, pp. 25 36 Dang Thi Thuy Hong (2013), "Situation of logistics system development in the cargo traffic and distribution of Vietnam”, Symposium No 15 of Mission of International Cooperation about science and technology: "Construction and development of logistics system towards sustainability – Experience of Germany and Lessons for Vietnam” No. 6/HĐHTQTSP, dated 05/01/2013 Dang Thi Thuy Hong (2013), " Analysis and assessment of the development of Logistics infrastructure of Vietnam in international integration and the impact of logistics systems to enterprises’ business efficiency”, Symposium No 31 of Mission of International Cooperation about science and technology: "Construction and development of logistics system towards sustainability Experience of Germany and Lessons for Vietnam” No. 6/HĐHTQTSP, dated 05/01/2013 Dang Thi Thuy Hong (2012), "Development of logistics services and assessment indicator for logistics development", Monographs "Logistics services in Vietnam in the process of international integration ", National Political Publishing House, pp. 47 85 10 Dang Thi Thuy Hong (2010), "Requirements, capabilities and orientation of logistics service development in Vietnam to 2020”, Topic Branch No. 7 (No. 07 / QD DT dated 28 04.12.2010 of statelevel independent research "Development of Logistics Services in our country’s international integration”, code ĐTĐL 2010T/33 ... Approach: Development of city logistics system in Hanoi Content: Development of city logistics system in Hanoi Time: Baseline study of the development of city logistics system in Hanoi focusing on the period from 2008 (the expansion of Hanoi) till now. ... Chapter I: The basics of the development of the city logistics system Chapter II: Situation of the development of city logistics system in Hanoi. Chapter III: Solutions to the development of city logistics system in Hanoi till 2030 and the vision ... 3.2.1. Remedy for policy mechanisms of city logistics system 3.2.1.1. Develop a master plan for development of city logistics system in Hanoi until 2030 and vision 2050 Constructing, developing, planning city logistics system in Hanoi to 2030 with a vision