Poor infrastructure obstructs logistics development

Reports by Vietnamese and international institutions have all pointed out that Vietnam’s logistics industry is weak in competitiveness.




Meanwhile, Vietnam hopes to rank in the top 4 in ASEAN and top 50 in the world in logistics by 2020.

A report of FTI Logistics Corporation showed Vietnamese logistics firms account for 80 percent of total firms in the field in Vietnam. However, they only provide simple services within the Vietnamese territory, while transnational services must be undertaken by international conglomerates.

According to the Vietnam Logistics Association (VLA), Vietnam’s logistics industry could take full advantage of FTAs and bustling import/export activities, but it has been growing by 20 percent only per annum, while a two-digit growth rate would be maintained in the next 5-10 years.

According to the World Bank, Vietnam’s logistics now ranks 64th out of 160 countries in the world. The fall in grade is attributed to low capacity, poor infrastructure and limitations in technology application.

A survey by the Institute for Economics & Development Research, an arm of the Hanoi Economics University, found 54.7 percent of logistics firms lack professional staff and the capability of managing works with IT apps.

Regarding transport infrastructure, experts emphasized the lack of connection between seaport and road systems, between railway and post-seaport supporting services, and the lack of logistics centers located in advantageous positions in key economic zones which can serve as points for goods transshipment and distribution.

Tran Bao Ngoc from the Ministry of Transport believes that one of the reasons behind the problem is inappropriate investment.

Experts believe that in Vietnam, where two key economic zones are located in the north and the south, railways should be developed as a major means of transport.

However, the railway does not play an important role in the economy now as it undertakes only one percent of total goods transported and is not the means of transport favored by enterprises.

Vietnam’s railway system has a total length of 2,653 kilometers, while 6.67 percent can satisfy international standards. This explains why the majority of the goods on the North - South route are currently transported by truck.

Vietnam’s road transport network is described as having a fishbone shape which comprises a backbone route, a highway, while the branches are the inter-province and inter-district roads.

Regarding maritime transport, Vietnam has many seaports, but the number of deep water seaports capable of receiving vessels with tonnage of over 30,000 DWT is modest, just 9.2 percent of total berths.

MOT plans to develop more deep water seaports to receive container ships with high tonnage. However, the projects have been going slowly because of many reasons.

Kim Chi / vietnamnet