Logistics sector grapples with poor infrastructure

May 18, 2019 - 08:38
The weakness of infrastructure and high transport costs have been barriers for Vietnamese firms to fully tap into the sector’s potential, said Trần Thanh Hải, deputy director of Import-Export Department under the Ministry of Industry and Trade.



Containers of goods being loaded by a crane system at South Đình Vũ Seaport in the northern port city of Hải Phòng. Weak infrastructure has been a persistent obstacle for the logistics sector. — VNA/VNS Photo Uyên Hương


HÀ NỘI — Weak infrastructure and high transport costs have prevented Vietnamese firms from fully tapping into the logistics sector’s potential, according to Trần Thanh Hải, deputy director of Import-Export Department under the Ministry of Industry and Trade.


“Việt Nam has the ability to develop its logistics sector thanks to its dynamic import and export activities," Hải said. "With its central position in Southeast Asia and more than 3,000 kilometres of coastline, Việt Nam could serve as a stopover destination for shipping firms from other countries in the region and the world."

He added that the logistics sector in Việt Nam has seen rapid development in recent years with yearly growth rates of 13 to 15 per cent.

“Poor roadway and aviation infrastructure has been one of biggest challenges for the sector despite improvements in recent years," he said.

In addition, the competitiveness of logistics firms was still weak. According to Việt Nam Logistics Association (VLA), the country has around 4,000 businesses operating in the sector. However, most of them are small- and medium-sized enterprises.

Logistics firms also lack a high-quality workforce because there is inadequate education and training in this space, he said.

VLA’s deputy general secretary Nguyễn Tương said that in addition to completing policies for the sector, ministries should work to improve infrastructure.

To attract investment, Tương said firms should work to improve services and lower costs.

Some logistics firms have decided to make big investments in infrastructure to help the sector reach its potential.

For example, Sao Đỏ Group invested in building the South Đình Vũ Industrial Zone (IZ) and Port complex in the northern port city of Hải Phòng.

Nguyễn Thành Phương, the group’s general director, demand for transport services for goods, especially sea transport, has been on the rise in recent years.

The group has been investing in seaports and other infrastructure to meet demand. Its South Đình Vũ complex has a total area of 1,329ha with a seaport and logistics area, a non-tariff area, a petroleum port and a liquid cargo area.

The complex is considered an important part of the logistics chain of the marine economic corridor of Hải Phòng - Hà Nội - Quảng Ninh. The South Đình Vũ seaport has received some 200 vessels from Japan, South Korea, Singapore, Hong Kong and China with total cargo volume of around 200,000 TEU since it opened last February.

Đinh Duy Linh, general director of Hateco Group, suggested some of the sector's difficulties could be solved with warehouses that make use of modern technology. Its Hateco logistics centre applies Industry 4.0 technologies to reduce costs.

Hateco Logistics has supplied services to big partners such as Lazada Express, Shopee, DHL, Giao Hàng Nhanh, Ninja Van, Trường Hải Auto and VN Post.

Piyush Rathore, general director of Transworld QBV ICD Company, said the logistics market in the country’s southern region had been saturated. Meanwhile, the northern market was expected to continue to grow thanks to its favourable location near the Chinese border. — VNS