Hanoi aims to become national logistics hub

ICD My Dinh (Photo: nhandan.com.vn)

Nguyen Thanh Hai, Deputy Director of the municipal Department of Industry and Trade, said Hanoi has launched a project on managing and developing logistics services in the locality by 2025.

Accordingly, the city will build two logistics centres in its north and south, each pning from 20 to 50ha and connected with inland container depots (ICD) and seaports like Hai Phong, Hon Gai and Cai Lan, and airports, coach and railway stations, and industrial parks. A specialised logistics centre will also be constructed at Noi Bai International Airport.

The sector is expected to contribute 9-11% of the city’s gross regional domestic product (GRDP) by 2025 when two logistics centres, two ICDs, an international container port and other facilities are put into operation.

Tran Duc Nghia, Director of Delta International Co., Ltd, suggested increasing connectivity in the logistics chain, especially between vehicles, in order to reduce logistics costs and improve the professionalism of the services. Taking the busy Hanoi-Hai Phong route as an example, he said it needs logistics services at both sides.

Statistics reveal that only 5,445 out of about 25,000 businesses registering logistics services in Hanoi become operational. Up to 80% of them are private and the majority have small scale and limited capital, technologies and workforce.

Therefore, domestic logistics businesses meet only about 25% of the market demand while the rest are fulfilled by global groups like Kunhe Nagel, Schenker, Bikar and APL Logistics.

Economists pointed out limitations in the city’s logistics sector such as unutilized river ports, old railway system and small-scale warehouses, along with high logistics cost.

Businesses have to burden various logistics fees regarding customs and transportation, which is one of the reasons making Vietnamese products find hard to compete with others from regional countries, they said.

Covering an area of over 3,300 sq.m and with a population of over 8.2 million people, Hanoi is one of the country’s leading localities in FDI attraction. In the first eight months of 2018, Hanoi lured US$5.93 billion in FDI.

Along with the synchronous infrastructure system, Hanoi is also the leading locality in promoting regional economic connection, and is home to many domestic and foreign logistics service companies.

With these factors, Hanoi is qualified for developing into a logistics service centre of the country, Nguyen Tuong, a senior advisor of the Vietnam Logistics Business Association, said at a workshop in Hanoi last month.

He suggested the city roll out policies to concretise the Government’s laws and decisions on logistics development in the locality.