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The ways of transporting goods by road. Photo: T.H

Barriers to developing logistics services

According to a representative of Saigon Newport Corporation, developing logistics services is an important task that always receives the attention of all levels and sectors from the central to local levels, especially in the context of international economic integration; many development policies of the State have been proposed to realize the goal of developing a network of logistics centers, contributing to meeting the needs of production and circulation of goods; at the same time, effectively exploiting the logistics service market of Vietnam.

However, in reality, there are many barriers that need to be overcome. In particular, the connection infrastructure has not been completed, has not been developed evenly and has not met the needs of the industry.

Road transport is the main mode of operation, while road infrastructure is overloaded and degraded, other modes of transport have not been developed. Expressway projects, ring roads 3 and 4 are behind schedule in the southern region. There is no planning to develop multimodal connectivity (waterway, road, railway) to increase flexibility for transport, import and export activities, and contribute to cutting costs for businesses.

Along with that, the development planning of supporting industries and logistics is not synchronized, not centralized, highly specialized, wasting resources and increasing costs. The planning of industrial and production areas also overlaps with residential areas, causing unsafety for people. There is a lack of policies to encourage the use of public transport to reduce environmental pollution and traffic pressure. There are many hanging projects under the planning of real estate projects instead of prioritizing focusing on developing seaport logistics.

It is notable the Truong Tho ICD area (including Transimex ICD, Phuoc Long ICD, Phuc Long ICD, Sotrans ICD and Tanamexco ICD) plays a large role in supporting the seaport system in HCMC in general and Phu Huu - Cat Lai port cluster belongs to Thu Duc City in particular. It is estimated that about 30-40% of imported and exported goods by container have gone through customs procedures here. Due to the high production of goods in this area, it often causes inadequacies in traffic safety and security, pollutes the environment, and affects urban planning. Ho Chi Minh City has a policy that by 2022, it will relocate Truong Tho ICD cluster to Long Binh inland port area (Long Binh ward, Thu Duc city) in order to adjust and develop Truong Tho area into a service and commercial area. However, the Long Binh inland port project has not been implemented, which may delay the relocation and affect the implementation of the general planning of Thu Duc City.

Although the system of seaports and airports has been invested and expanded, it has not yet met the growth needs of the logistics industry, leading to overloading and delays in cargo handling procedures. According to a report of the Ministry of Transport, about 20% of seaports in Vietnam can meet the requirements of the logistics industry, while more than 50% of seaports suffer from overload and lack of facilities with logistics service benefits. About 20% of the roads in Vietnam are modernly built and meet the requirements of the logistics industry, while more than 50% of the roads suffer from poor quality and are not safe for transportation. Freight.

About 30% of airports in Vietnam meet the requirements of the logistics industry, while more than 40% of airports suffer from overload and lack of logistics facilities.

Warehouse facilities are not enough in number and have not been fully invested in facilities, making it difficult to store and manage goods. Currently, only about 10% of warehouse facilities in Vietnam can meet the requirements of the logistics industry, while more than 50% of warehouse facilities suffer from overload and lack of service facilities. logistics service. Warehousing facilities in Vietnam have not met the standards of facilities and fire safety, making it difficult to store and manage goods.

Recommending many solutions

In addition to the above situation, according to Saigon Newport Corporation, the competitive situation in providing logistics services has unfavorable factors for Vietnamese enterprises.

Specifically, since most Vietnamese exporters export goods under FOB and FCA terms in Incoterms, the right to decide on transport is appointed by the buyer and of course the buyer will appoint a foreign company to do this. Therefore, logistics companies in Vietnam do not have many opportunities to provide logistics services. This is not easy to solve because most of Vietnam's exporters process or export goods to large customers who have long-term contracts with global logistics companies.

Vietnam's average logistics cost is estimated at about 25% of GDP, much higher than developed countries like the US and higher than developing countries like China or Thailand. It is high logistics cost that effectively undermines Vietnam's efforts to introduce a cheap labor market and boost exports. The main cause of this situation is that Vietnam's transport infrastructure is too old and overloaded, the administrative system is complicated, and Vietnamese manufacturers do not actively use rental outside services of foreign 3PLs.

Facing the above fact, Saigon Newport Corporation has proposed a number of solutions to develop logistics in Vietnam:

In particular, the group of solutions on planning, infrastructure and policies, propose to speed up the investment progress in the construction of modern ports, airports and warehouse facilities to improve traffic capacity. and cargo management; increase investment in transport routes, including roads, railways and waterways to improve cargo transport capacity; synchronize management and supervision of logistics activities to minimize backlog of goods and waste of resources.

Creating a favorable business environment for enterprises operating in the logistics sector, including reducing cumbersome legal regulations, reducing operating costs, and facilitating small and medium enterprises to participate in the industry. .

Accelerate the development of logistics centers of Ho Chi Minh City according to the complete, long-term and synchronous planning with the master plans; assign enterprises with experience in port operations and provide logistics service solutions to deploy these centers, in order to bring about efficiency in the operation of logistics centers, and to connect logistics centers with the system of gateway ports.

Adopting a policy to develop a cluster of ports on the Dong Nai river, especially Cat Lai port, to increase capacity, and to promote the development of green transport services (barge transport) connecting Cat Lai port with other ports and ICDs at other ports of economic areas in Binh Duong, Dong Nai, Mekong Delta, Cambodia... In the infrastructure planning, it is necessary to take into account the dredging plan, the static regulation is not suitable for long-term connection with potential for development. according to the trend of international transport.

Regarding the supply chain system, building an efficient and professional supply chain system, including synchronizing the activities of units in the supply chain, applying information technology to monitor and manage operations supply chain; establish standards and standardized processes in logistics activities.

It simultaneously implements digital transformation, green transformation in the logistics industry; consider this both a requirement and a driving force for innovation and sustainable development of Vietnam's logistics industry in the coming time.