In the GMS, trade and transport facilitation frameworks are in place but their implementation is still
lacking. There is also a myriad of bilateral facilitation-related agreements that have coverage over
different geographical areas. All GMS countries, except China, are parties to both the Cross Border
Transport Agreement (CBTA) and the ASEAN Framework agreement for the facilitation of goods in
transit (signed in 1998 in Hanoi).
There are also bilateral facilitation agreements for goods in transit between Thailand and Lao PDR as
well as between Viet Nam and Lao PDR. The role of logistics service providers, the use of logistics
outsourcing, and information technology in managing logistics, is relatively well developed in China
and Thailand whereas these practices are still lacking in Cambodia, Lao PDR, Myanmar and Viet Nam.
All GMS countries share a similar perspective on the fact that modern logistics practices have not been
fully implemented yet.
GMS logistics service providers have developed rapidly and have played a strong supporting role to the
manufacturing sectors. However, these companies are often small family-owned enterprises that cannot
compete directly with multinational firms (for example, TNT, FedEx, and DHL). Logistics service
providers in the GMS countries have different strengths and weaknesses. A common strength is their indepth
knowledge of the local market. Viet Nam is currently facing an acute shortage of qualified human
resources, while the market in Lao PDR is still based on traditional logistics services such as customs
brokerage and physical transportation. Thai and Chinese providers may seem to be more competitive but
this is only true if the comparison is made with other GMS providers.
Logistics integration in the GMS is still mostly hindered by the institutional framework that is in place.
A facilitating institutional framework (that is, the CBTA) is currently being implemented and details
still need to be addressed, especially on how to apply all the various facilitation measures. This poses a
challenge for all related agencies and stakeholders as new rules and regulations are being put in place
with field operatives not knowing how to apply these new measures. This is particularly true at the
various borders.
It can be said that Cambodia, Lao PDR and Myanmar is lagging far behind in terms of logistics
developments when compared with China, Thailand and Viet Nam. Viet Nam, China and Thailand
would still not be considered as ‘world-class’ but their respective national logistics system can be
considered to be ‘fair’ (that is, more or less adequate). However, all GMS countries still require massive
infrastructure and institutional development to meet the ever increasing international standard to sustain
their competitiveness in the global market.