During a conference held early this week in HCM City, Nguyen Ngoc Hoa, deputy director of the city's Department of Industry and Trade, said the city had told the department and Viet Nam Logistics Research and Development Institute (VLI) to work on a logistics development project to 2030.
The official said that the scheme will be developed based on the principle of regional connectivity. It also aims to build technical infrastructure for the establishment of three logistics centers in line with a Government master plan approved in 2015.
The project will focus on building three logistic centres through technical infrastructure, and will aim to increase the number of businesses hiring specialised logistic services, with the goal of reducing costs.
The scheme also targets increasing the number of firms that use outsourced logistics services with specialization to reduce their transportation costs and enhance their competitiveness.
Though neighboring provinces are currently exporting many key products, the city aims to maintain its lead as the country’s economic growth engine by becoming a logistics hub, reported Nguoi Lao Dong newspaper.
The municipal government is devising a strategy to turn logistics into a key service industry for the city and region, which is expected to reduce Vietnam’s logistics costs to 16% of gross domestic product by 2025. However, according to Hoa, this major challenge requires the city to have adequate infrastructure and to improve the scale and quality of logistics services.
“The scheme will present a regional integration strategy for logistics development. It will determine the locations and scale of logistics centers and offer solutions to improve quality and expand the provision scope of logistics services,” he said.
To continue as the economic leader of the country, HCM City should have a well-developed logistics industry connected to other provinces, especially because many of the city's major exporting industries are moving away from the city to other provinces, experts said.
To Thi Hang of the VLI said that southern Viet Nam has 12 inland container depots, with newer and bigger ones offering more comprehensive logistic service packages. She noted that these depots are somewhat similar to a logistics hub connected with inland waterways and close to seaports. However, they are still too far from the sources of goods.
Southern Vietnam will have 31 new inland container depots, with 24 of them in the northeastern part of HCMC, according to a 2018 decision by the Transport Ministry.
By 2030, there will be eight depots with a total area of 102 to 137 hectares in HCMC, and these facilities will have a combined cargo capacity of 1.38 million to 1.89 million containers.
HCM City has six depots, but five of them, which have been operating over the intended capacity, are planning to relocate.
In addition, many of Viet Nam's logistic businesses rely on contracts from foreign companies, as well as from big businesses.
A survey done by the institute showed that most of the city's port clusters were facing difficulties such as congestion, unhealthy competition, poor connection between small ports, and the inability to expand due to locations in urban areas.
A number of local ports are situated in the inner and suburban parts of the city, so they cannot be expanded. The development of port services was also found to be sluggish, leading to delays in cargo transportation.
The survey indicated that from a corporate perspective, the future logistics hub would need to be located in the region of Thu Duc District and District 9 in eastern HCMC, due to its convenient traffic infrastructure and its location next to key neighboring manufacturing provinces.
During the conference, several businesses said that a comprehensive logistic development project was crucial for ensuring sustainable growth and avoiding a situation where developments occur independently of each other.
Inland container depots along with good storage spaces and clearance systems are important for a logistics centre, they said, adding that current depots in the city lack traffic connections within the city and to other provinces.
HCM City is the biggest consumer market in the country, and the largest distribution and supply centre in the South. Most of the imports and exports from southern provinces and trade between provinces go through HCM City.
The city, which is also located near major East Sea shipping routes, can use multiple methods of goods delivery due to favourable landscape, according to the department.
HCM City plans to have eight depots by the end of 2030, with a total size of around 102 to 137 hectares.
The logistics project will be submitted to the city government for approval in December.
