Remove logistics bottlenecks to improve the competitiveness of import and export goods

Many solutions to remove bottlenecks in the development of logistics services were discussed by authorities, associations and businesses at the Seminar “Improving logistics in the southern key economic region to promote import and export” organized by Customs Magazine on April 6, 2023 in Ho Chi Minh City, to promote import and export goods in the southern key economic region.

Logistics has not developed commensurately

The delegates said that there are many bottlenecks, in which infrastructure Traffic, human resources, land fund… are the main bottlenecks lead to the development of logistics in the southern key economic region has not been commensurate with the potential and advantages of the dynamic economic region of the country.

Mr. Nguyen Nguyen Phuong, Deputy Director of Ho Chi Minh City Department of Industry and Trade (DoIT), said that the current bottleneck is that Vietnam’s logistics costs are still too high compared to the region. Therefore, Ho Chi Minh City directed the implementation of immediate solutions to help reduce logistics costs.

According to the plan on developing the logistics industry in Ho Chi Minh City until 2025, with a vision to 2030, Ho Chi Minh City will invest in 7 logistics centers to serve the import and export of goods. Fortunately, the logistics center in the Saigon high-tech park (SHTP) has basically completed the preparatory procedures and has already selected the investor. This will be the first logistics center in the plan to be deployed.

On April 5, 2023, DoIT signed the final document to reply to SHTP so that SHTP can support the investor in implementing the project. However, the difficult problem is that the location and area of these 7 centers are different, each of which has different characteristics, which makes calling for investment and implementing investment procedures difficult.

Dang Vu Thanh, Vice Chairman of the Vietnam Logistics Association (VLA), said that the transport infrastructure in the region is not synchronized and lacks connectivity. Currently, the traffic infrastructure in Ho Chi Minh City in particular and the southern key economic region in general lacks connectivity and synchronization, causing congestion in freight transport, increasing logistics costs.

“Therefore, because of limited budget capital, it is not advisable to invest in many projects, but prioritize construction of key and lifeline traffic works such as the Ben Luc – Long Thanh expressway; Ho Chi Minh City – Moc Bai, or projects connecting with 13 provinces and cities in the Southwest and Southeast, routes to seaports… ” Mr. Thanh suggested.

From the perspective of logistics enterprises, Mr. Do Xuan Minh, Director of Logistics Service Center, Saigon Newport Corporation, said that over the past time, agencies and departments have actively promoted reform of administrative procedures, creating trade facilitation for businesses in the clearance of import and export goods, however, there are still some outstanding problems in administrative procedures and inappropriate specialized inspection.

Some regulations are overlapping, some policies have not been promptly revised to suit the characteristics of logistics activities in practice. There is a lack of mechanism to create linkages and substantive connections between localities in order to take advantage of each locality, synthesize and share resources and opportunities instead of competing locally. The connection agreements are still formal, there is no substantive coordination; linkages between localities that have not been based on specialization or division of labor along the value chain… also make it difficult for logistics enterprises and import-export enterprises to cut costs, time, and affect the access to world markets.

Immediately remove bottlenecks

The southern region accounts for 60% of the country’s goods. In case of improving logistics, the region will support domestic production activities, increasing the competitiveness of exports. If the transportation problem is solved, reducing transportation costs will solve the big problem and contribute to solving the economic difficulties.

From the above fact, representatives of Ho Chi Minh City departments and branches, business associations discussed and proposed many immediate and long-term solutions to remove the “bottlenecks” to develop logistics services commensurate with the potential, promote import and export goods, especially reduce logistics costs, improve the competitiveness of Vietnam’s exports. HCMC and other localities should soon have projects to dredge river and canal systems to attract products, goods and services.

In addition, the Government should have policies to call for and support investment in logistics centers such as tax incentives, loan guarantees, credit insurance, low-interest financing, and synchronous planning of logistics centers associated with the general planning, development goals of the locality and the whole economic region, etc. 

Ba Ria – Vung Tau has not promoted investment attraction in the construction of inland ports, improved import and export procedures, and customs clearance, goods quarantine and completion of transport infrastructure connecting the port and the rear of the port, etc. Therefore, the goal of developing Ba Ria – Vung Tau as the logistics center of the whole region will be difficult to complete.

In order to promote the efficiency of ports, the representative of Saigon Newport Corporation recommends building a synchronous infrastructure system, speeding up the progress of transport infrastructure and multimodal connectivity projects to facilitate the development of logistics services, increasing investment in logistics and warehousing infrastructure to strengthen the logistics ecosystem, regional connection to help increase Vietnam’s trade competitiveness globally.

At the same time, create favorable conditions for businesses to develop green transport modes, participate in sustainable supply chains, and encourage the promotion of potentials of inland waterway transport routes, cross-border waterway transport. Promote support for logistic enterprises to improve the quality of human resources, apply technology, connect with enterprises in the supply chains, promote trade promotion for logistics services; develop forms of multimodal transport, cross-border transport, especially with goods in transit.

Focus on developing human resources at present and have a long-term training strategy according to international standards. Applying technology to logistics activities helps businesses reduce last-mile delivery costs by 14% and increase the number of goods delivered per vehicle by 13%. In addition, these disruptive technologies enable logistics companies and service providers to further optimize costs and increase delivery productivity by intelligently planning routes to ensure more goods pick up and deliver traffic.

Businesses suggested that, HCMC and other south localities should quickly  focus on implementation series of strategic solutions such as investing on development of transport infrastructure, construction of airports, seaports and railways; develop human resources, perfecting solutions to apply information technology in combination with digital transformation programs so that logistics can really promote its strengths and make great contributions to the economic development structure for the region in particular and the whole country in general.


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