Hanoi to become national logistics center

09:00 | 14/12/2018 Economy- Society

(VEN) - Hanoi is well qualified to become a national logistics center, but restrictions on transport infrastructure and lack of land are slowing down the development of these services.

hanoi to become national logistics center
My Dinh Inland Clearance Port

Limited infrastructure

According to the Vietnam Logistics Business Association (VLA), around 4,000 enterprises are involved in providing logistics services nationwide, with Hanoi accounting for about one quarter.

Tran Duc Nghia, director of Delta International Co., Ltd., said interprovincial transport to Hanoi accounts for 55 percent of the country’s total circulation of goods. In addition, two-way cargo transport between Hanoi and the northern city of Hai Phong is quite balanced. Therefore, the development of a logistics center would contribute to reducing costs and benefiting the society. However, Vietnam still lacks connections between transport trading floors and logistics infrastructure.

Last-mile delivery is the bottleneck of Hanoi’s logistics. “Currently, only Hanoi and Bangkok place a ban on trucks and lorries as there is no transport infrastructure sufficient to meet logistics needs,” Tran Duc Nghia said. In addition, enterprises cannot invest in logistics due to lack of land. The best way to resolve this problem is to increase the supply and change the purpose of industrial land use in Hanoi.

Nguyen Van Duc, deputy director of the Hateco Logistics Joint Stock Company, said some four logistics projects in Hanoi have been approved for investment, while nine projects are completing procedures. In the near future, Hanoi will face a serious shortage of logistics centers as there is only one level 1 logistics center and one level 2 logistics center. Duc suggested the Hanoi People’s Committee accelerate the implementation of logistics projects, and quickly expand warehouses to meet the demand for goods transported by air.

Specific policies

Covering an area of over 3,324sq.km and with a population of over 8.2 million people, Hanoi is one of the country’s leading localities in attracting foreign direct investment (FDI). In the first eight months of 2018, Hanoi lured US$5.93 billion in FDI. Along with the synchronous infrastructure system, Hanoi is also the leading locality in promoting regional economic connection, and is home to many domestic and foreign logistics companies.

These factors position Hanoi as a strong potential logistics center, VLA Senior Advisor Nguyen Tuong said. To achieve the target, specific policies must be formulated and the government must adopt a decision on the development of logistics services in Hanoi. Priority policies related to land fund and tax incentives are also needed for developing a logistics infrastructure. Tuong also suggested research on building service centers for gathering goods in suburban areas, then using small trucks to transport goods into the inner city, adding that this could resolve traffic congestion and ensure safety in the inner city, especially during rush hours.

Hanoi’s river ports have not developed due to restrictions on material handling equipment and boat clearance. Studying the development of inland waterway transport services in connection with those in the region is also advised. To promote the development of logistics services in the capital, Hanoi officially approved a project on management and development of logistics services by 2025 under Decision 814/QD-UBND.

Accordingly, Hanoi will create favorable conditions and offer financial support to help businesses and associations promote their role and improve capacity as well as quality of logistics services. In the current context, logistics cost reduction is considered the most effective way to increase profits and is a very important factor in assessing the competitiveness of enterprises as well as of the country.

Tran Thanh Hai, deputy director of the Agency of Foreign Trade under the Ministry of Industry and Trade, said Hanoi plays an important role in the country’s logistics map. In fact, the presence of one level 1 logistics center and one level 2 logistics center in Hanoi is not enough. Therefore, it is necessary to increase the number of logistics centers, as well as scale and level of technology.

Nguyen Hanh