News

IMPROVE THE QUALITY OF TRANSPORT INFRASTRUCTURE TO UPGRADE LOGISTICS CAPACITY - ALOHA LOGISTICS

AIthough the increase in scores has clearly contributed to improving Vietnam's score and position in the 1.PI ranking over the years, the quality of infrastructure still has many bottlenecks, hindering development. Currently, many transport projects are being implemented with the expectation of improving the capacity of transporting goods, upgrading the national logistics capacity...

From the results of the National Capacity Index (LPI) published by the World Bank over the past 16 years. Vietnam's LPI tends to increase. This demonstrates efforts to reform institutions, policies, business environment as well as investment in upgrading logistics and transport infrastructure over the past time.

In the announcement of 2023, Vietnam's LPI index increased higher than the previous announcement (3.27 points) and reached 3.3 points, of which the quality of infrastructure increased most markedly. However, Vietnam dropped 4 places compared to the last LPI announcement in 2018, with a ranking of 43 out of 160 countries.

IMPROVE THE QUALITY OF TRANSPORT INFRASTRUCTURE TO UPGRADE LOGISTICS CAPACITY - ALOHA LOGISTICS

TRANSPORT INFRASTRUCTURE REMAINS ADRAG

According to estimates, Vietnam's logistics service costs are about 20% of GDP, still much higher than developed countries such as the US and higher than developing countries such as China or Thailand, making Vietnamese goods less competitive.

Recently, leaders of Saigon Newport Corporation pointed out the obstacles to logistics development in Vietnam. The first obstacle is the incomplete. planning, infrastructure and connectivity infrastructure, which have not met the needs of the industry.

Accordingly, road transport is still the main mode of operation, while road infrastructure is overloaded, degraded, and other modes of transport have not been developed. Highway, Ring Road 3 and Ring Road 4 projects are behind schedule in the southern region. According to calculations, about 20% of roads in Vietnam are built modernly and meet the requirements of the logistics industry. Meanwhile, more than 50% of roads are in poor quality condition and unsafe for freight transportation.

Along with that, "seaports and airports have not met the growth needs of the logistics industry, leading to overcrowding and delays in cargo handling procedures, said a representative of Saigon Newport Corporation.

According to a report by the Ministry of Transport about 20% of seaports in Vietnam meet the requirements of the logistics industry, while more than 50% of seaports suffer from overcrowding and shortage of logistics facilities. For aviation, about 30% of airports in Vietnam meet the requirements of the logistics industry but more than 40% of airports are overloaded and lack utilities.

Warehousing facilities are also insufficient in quantity and not fully invested in facilities, making it difficult to store and manage goods.

IMPROVE THE QUALITY OF TRANSPORT INFRASTRUCTURE TO UPGRADE LOGISTICS CAPACITY - ALOHA LOGISTICS

Currently, only about 10% of warehouse facilities in Vietnam meet the requirements of the logistics industry, while more than 50% of warehouse facilities suffer from overcrowding and shortage of logistics facilities. Warehousing facilities in Vietnam also do not meet the standards of facilities and fire safety. making it difficult to store and manage goods.

In addition, the planning for the development of supporting industries and logistics is not synchronous, not centralized, highly specialized, causing waste of resources and increasing costs. The planning of industrial and production areas also overlaps with residential areas, causing unsafety for people. There are still many projects suspended according to the planning of real estate projects instead of focusing on logistics and scaport development.

The second drag is human resources. The logistics industry faces difficulties in training high-quality human resources as well as attracting and retaining qualified and experienced personnel in the field of logistics.

The third drag is the supply chain system. The supply chain system is not efficient and professional to ensure goods are transported quickly, safely and cost- effectively; There is no modern information and technology system to monitor and manage the supply chain professionally and effectively.

The fourth resistance is a number of other difficulties of logistics enterprises. In terms of the number and scale of enterprises involved in providing logistics services, nationwide, there are more than 30,000 enterprises registered to operate in the field of logistics, of which more than 5.000 enterprises provide 3PL logistics services (hiring external companies to perform logistics activities). Despite the large number, Vietnamese logistics logistics companies only meet 25% of domestic demand and only concentrate a few service industries in the service value chain with billions of USD in sales.

TAKE ADVANTAGE OF NATURE TO GROW

Despite many limitations. Vietnam's logistics industry continues to record significant progress, with an average rate of 14-16%/year, a scale of 40-42 billion USD/year with many natural conditions and a very favorable geographical location to develop logistics services.

Due to its long coastline located on the busiest shipping routes in the world, Vietnam has a great advantage of providing international logistics services to Laos and especially Cambodia when goods going to and from Cambodia from China, ASEAN countries and the US through Vietnam's southern port clusters will not have to bypass Sihanoukville port by a consolidated ship then continue over 200 km by road to Phnom Penh.

By road, Vietnam is located on the Trans-Asian Road connecting Guangdong and Shanghai, China's industrial and consumer goods production hubs with ASEAN countries. When passing through the northern territory of Vietnam, this trans-Asian route forms a straight line, providing a transportation solution with faster transit times than sea freight and cheaper freight rates than air freight for trans-Asian freight.

With the advantages of geographical location and natural conditions brought along with economic development over the past decades, Vietnamese logistics enterprises can participate in the flow of goods internationally and regionally.

Offering breakthrough solutions to develop the logistics sector, leaders of Saigon Newport Corporation highlighted the group of solutions on planning, infrastructure, policies....

Source: Aloha International Logistics Co.,LTD