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At the forum today |
This afternoon, the Ho Chi Minh City Logistics Association (HLA) organized the 2023 City Logistics Forum with the theme ‘Shifting supply chain: Prospects and challenges’. According to forum participants, for good preparation for the coming supply chain shift, Vietnam needs to increase investment in developing logistics infrastructure, increase loading and unloading capacity and add warehouses at seaports as well and form a large logistics service supply center in Ho Chi Minh City.
According to Mr. Nguyen Cong Luan, Deputy Head of the Import-Export Management Division under the Department of Industry and Trade of Ho Chi Minh City, logistics activities in Vietnam in general and Ho Chi Minh City in particular still have many challenges. Road transport is still the main mode of transport, but road infrastructure is overloaded and degraded. Currently, about 20 percent of roads in Vietnam are built modernly and meet the requirements of the logistics industry while more than 50 percent of roads are of poor quality and do not ensure safety for transporting goods.
Roughly 9,600 Ho Chi Minh City-based businesses registered to operate in the logistics service industry accounting for 36.7 percent of the country. These are multi-industry businesses operating in transportation, and logistics; thereby, they helped the southern largest city maintain its position as a leading locality in logistics activities in the region and the country. However, Ho Chi Minh City does not have a large-scale logistics center applying modern advanced technology. Currently, the city has only one Logistics Center project in the High-Tech Park licensed in June 2023.
According to the Ho Chi Minh City University of Transport’s statistical results, the city has only 1,500 warehouses and only 30 standard cold storage warehouses which are not enough to meet market demand.
Forum attendees voiced their opinions about how to prepare for the supply chain shifts. As per their ideas, it is necessary to increase the implementation of investment projects to develop transport infrastructure and logistics infrastructure in the country, especially in Ho Chi Minh City. For instance, Mr. Nguyen Cong Luan said that the city will speed up the process of calling for investment in 6 logistics center construction projects in Thu Duc City’s Long Binh, Linh Trung, Cat Lai - Phu Huu wards, Binh Chanh outlying district’s Tan Kien Commune, Cu Chi District’s Binh My Commune and Nha Be District’s Hiep Phuoc Commune.
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A corner of Hiep Phuoc-Nha Be Seaport in HCMC |
Discussing the challenges of Vietnam's participation in the global value chain, many experts say that high logistics costs and many intermediary stages in the goods production process resulted in increased costs. In addition, the connection between different modes of transport is also weak; Vietnam's infrastructure is only gradually developing. Therefore, Vietnam needs to continue to promote strong investment to create competitive advantages, especially improvement in infrastructure.
According to Agility Emerging Markets Logistics Index 2023, Vietnam moved into the top 10 of the Index among emerging markets. Moreover, among Southeast Asian countries, Vietnam is ranked fourth, behind Malaysia, Indonesia, and Thailand.
According to the assessment published by the World Bank in 2023, Vietnam ranks 43rd in the logistics efficiency index. Vietnam is among the top 5 countries in ASEAN, just behind Singapore, Malaysia, and Thailand.
