Logistics potentials underexploited in Vietnam

Experts at the second Vietnam Logistics Forum hosted recently in Ho Chi Minh City said that Vietnam has a great potential for logistics but has weakly exploited it.

Only 10 percent of Vietnamese seaports can attend in international transport operation (Photo: SGGP)

Mr. Pham Minh Duc, an expert from the World Bank in Vietnam, said that although having much improved in recent years, Vietnam’s traffic infrastructure still shows many limitations.

Many major roads have not been built for container transport, railway system has run outdated, and airway has failed to meet cargo transport demand in peak seasons.

Only 10 percent of Vietnamese seaports are able to attend in international transport activities. Deep-sea port complex Cai Mep-Thi Vai has not been exploited appropriately in the southern key economic zone.

It takes too much time for export import procedures while authorized agencies have not fully worked together in the implementation of Vietnam's new national electronic one-stop customs clearance system.

Chairman of Hoa Sen Group Le Phuoc Vu said that the company has built its plant in Phu My Industrial Zone in Ba Ria-Vung Tau Province, which is located near Cai Mep-Thi Vai. However only few container shipping lines operating in international routes have called at the port, the company has been forced to transport cargo to Ho Chi Minh City for exports.

That has tripled domestic transport costs because the company has to use container trucks to carry goods over 160 kilometers from the plant to Tan Cang-Cat Lai Port in HCMC.

The above issue has reduced the competitiveness of the company’s products and also contributed to worsen the overloading of HCMC seaports.
 
In fact, transport fee accounts for 60 percent of Vietnam’s logistics costs while logistics costs occupy 20 percent of total costs, much higher than the average of 9-13 percent in the world.

A Singaporean businessman said that cargo from China, South Korea and Japan to the US and vice versa has to go through Vietnam. With such an important position, Vietnam should further investment to become a transit-port and logistics center in the Asian region and the world.

After all, deputy Minister Nguyen Van The said the Ministry of Transport would work with local authorities and relevant ministries to seek the best measures for the development of seaport system.

In addition, the ministry will study to classify groups of commodities which should be transported by railway, roadway or waterway to optimize Vietnam’s transport services.

Chairman of the Vietnam Logistics Association Do Xuan Quang said that they will meet with local exporters to listen to their opinions for better logistics service.

By Nguyen Khoa – Translated by Hai Mien

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