Logistics enterprises expect a "push" on infrastructure

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Lack of synchronous connectivity between ports, railway stations, airports, inland container deportsand infrastructure affects logistics development. Photo: Thu Hoa

Many logistics enterprises believe that thereneeds to be a "push" on infrastructure in order for the growth and development of Vietnam’s logistics industry.

Lack of connection

According to the Ministry of Transport, the most prominent issue inlogistics is that logistics costs in Vietnam are still high. According to a study by the World Bank (WB), Vietnam's logistics costs are equivalent to 20.9% of GDP, of which transport costs account for about 59%.

In response to why it is difficult to reducelogistics costs and compete with foreign enterprises, Mr. Nguyen Truong Hai, Deputy Director of Truong Long Transportation Services Company, said the lack of inland container depots and logistics centers with large scale and convenient locations in each key economic area to act as a focal point for transshipment and distribution of goods was the reason why transportation and logistics costs were still high.

Accordingly, lack ofsynchronization between ports, railway stations, airports, inland container depots and connected infrastructure made establishment of a logistics service chainlinking transport modesin delivery and withdrawing goods through the ports incomplete.

“This is an important bottleneck forlogistics enterprises because unless this bottleneck is overcome, it will be very difficulttoreachthe international market. Most of Vietnam’s logistics enterprises often provide inland logistics servicesandinternational services which mainly focus on the ASEAN region.The strength of the current logisticsenterprisesis to take up almost all domestic transportfrom port operation, transport, customs clearance agents to warehousing and warehouse services.This shows that Vietnamese logistics enterprises are notcompetitive enoughto reach the international market, but only participate in domestic stages in the whole logistics chain, playing the role of satellite providers for foreign logistics companies,” Mr. Hai said.

Agreeing with this view, Mr. PhanManh Hung, Head of Import and Export Department, Thien Ha Trading and Services Co., Ltd. said that although the Mekong Delta was an area with advantages to develop logistics services, especially inland waterway transport, this area lacked the direct connection infrastructure totake goods from the Mekong Delta to international routes.Accordingly, goods of enterprises are mostly transferred to CaiMep portor Cat Lai port to travel to international routes.Limiting logistics infrastructure in the Mekong Delta regionhad created a burden on increasing costs for agricultural and fishery exporters in this area.

"So we hope that if we can solve the problem of bringing goods export directly from the Mekong Delta, not to Ho Chi Minh City, enterprises will save money," Mr. Hung said.

Lack of "soft" infrastructure

According to Mr. Clement Blanc, Director of DHL Global Forwarding in Vietnam, Cambodia and Laos, Vietnam's logistics infrastructure had not developed yet. Accordingly, for hard infrastructure, the Southern region was following the Northern region. Hanoi and HaiPhongwere developing very fast in highways and ports, while in Ho Chi Minh City, airports were overloaded. In addition, the situation of unloading vehicles in return also made logistics enterprises waste costs.

With the influence of Industry 4.0, enterprises cannot carry out business activities without planning to capture globaltechnology innovations and initiatives. The role and way of operating the supply chain will be different after 20 years and will be very different from now. Meanwhile, Vietnam’s logistics enterprises face a shortage of"soft infrastructure" with restrictions on using Big Data technology in warehouse management, to calculate the flow in rush hour.

Talking to reporters from Customs News, Mr. Nguyen Tuong, Deputy General Secretary of Vietnam Logistics Association (VLA), said that according to calculations, if the output limit of Ho Chi Minh City area was implemented, the incremental output of Ho Chi Minh City area moving to CaiMep - ThiVai in 2025 would be about 5 million teus. The output throughVung Tau seaport by 2025 was forecasted to reach 5.2 - 6.2 million teus.In the long term, the arrival of the shipsin CaiMep - ThiVai would promote the development of service lines to consolidate or distribute to surrounding domestic markets such as Ho Chi Minh City and Da Nang, QuyNhon, HaiPhong and even international markets such as Cambodia, Thailand and the Philippines, which are the prerequisites for the formation of a transshipment center.