The Mekong Delta bears the burden of logistics costs

The Mekong Delta imports and exports tens of millions of tons of goods every year, but lacks key logistics centers and linking systems, causing transportation costs to increase by 10-20%. This information was given at the Forum on Perfecting the Logistics Service Chain for Agricultural Products in the Mekong Delta, held in Can Tho on May 26.

Mr. Pham Tan Cong, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said that the Mekong Delta contributes 50% of rice production, 95% of rice exports, nearly 65 % of aquaculture production, 60% of exported fish and nearly 70% of the country’s fruits…

This area needs to transport import and export goods of about 18 million tons per year. However, the region still lacks key logistics centers and linking systems, empty container yards as well as deep-water ports for ships transporting export containers. “Therefore, up to 70% of these goods have to be transported to major ports in Ho Chi Minh City and Cai Mep port (Ba Ria Vung Tau), which makes transportation costs 10-20% higher and greatly limiting competitiveness”, said Mr. Cong.

According to the Forum Organizing Committee, the Mekong Delta currently has 1,461 logistics service providers, accounting for just over 4% of the logistics units across the country. However, most logistics services in the Mekong Delta are only separated activities, lack professionalism, do not have a close connection between modes of transport, so it often causes delays, high costs. Logistics costs are at the highest level and account for 30% of product prices, making agricultural products of the Mekong Delta less competitive compared to agricultural products in neighboring countries and China…

Mr. Hoang Hong Giang – Deputy Director of the Maritime Administration (Ministry of Transportation) said that the Mekong Delta has 12 seaports but only reaches about 50% of capacity. According to the plan, the throughput of goods in the Mekong Delta is 45-50 million tons with about 500,000 containers per year by 2020. However, the reality is much lower. It only reaches 21 million tons and 22.9 million tons in 2019 and 2020 respectively. In 2021, the amount decreases to 21 million tons (due to the impact of the Covid-19 epidemic).

Mr. Giang pointed out that the weakness that seaport infrastructure is scattered, small-scale, especially in-river ports, which have not met the demand for medium and long-distance shipping, and the exploitation efficiency is not high. Small-scale road infrastructure, limited road supply, so road transport is not efficient in terms of time and cost; lack of logistics centers…

As a result, although the Mekong Delta is a big center in agricultural production of the country, the logistics service chain for agricultural products is a bottleneck that hinders the economic growth of the region. And it is necessary to have timely solutions to remove them.

According to Mr. Nguyen Phuong Lam – Director of VCCI Can Tho, the Mekong Delta is receiving special attention. It is expected that in the next 3-5 years, there will be a smooth highway from Ho Chi Minh City to Can Tho, then Ca Mau, Chau Doc (An Giang). Dinh An channel will be dredged. And a regional center for production, processing and consumption of agricultural products is established. It will be a “golden opportunity” for this area, especially for the breakthrough logistics and port industry.

Mr. Pham Tien Hoai, Chairman of Hau Giang Business Association, said that it is imperative to form Logistics centers specialize in agricultural products and pepper, reducing logistics costs from 30% to 15% of product costs to increasing competitiveness of Mekong Delta products.

“At these centers, there will be all services for agricultural products from purchasing to sorting, washing, packaging, irradiation, sterilization, cold storage to export clearance. It is necessary to have special support policies of the authorities for four households: farmers, manufacturers, importers and investors.

Mr. Nguyen Thanh Phong, Deputy Head of the Central Economic Commission, said that it is necessary to effectively exploitation, invest and develop transport infrastructure; focus on developing high-quality human resources such as transportation and logistics services to meet domestic and international needs.

At the same time, Vietnam continues to improve the legal policy on logistics and transportation services… According to Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), it is necessary to take advantage of the source of agricultural products and strengthen regional linkages to develop logistics in Mekong Delta.

Facilitating trade in agricultural products is an urgent issue to help the region’s economy develop faster with its inherent advantages. In which, focusing on improving the quality of planning, focusing on logistics planning for the whole region, especially investment activities of projects, promoting investment in construction of regional transport infrastructure and improving the quality of goods and services; creating and upgrading main shipping channels in the region…


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