Vietnam Set to Invest in Logistics Master Plan to Improve Trade Advantage

27/07/2016

Vietnam Set to Invest in Logistics Master Plan to Improve Trade Advantage

 

shipping_containers_port_from Pixabay

Vietnam is girding its loins for greater trade, and next on the list of preparations is improving logistics in a big way.

According to Vietnam News, experts are mulling a master plan that would comprehensively develop the country’s logistics industry, capitalizing on its existing advantages to well position the nation for short-term trade needs and long-term prospects.

If the Trans-Pacific Partnership (TPP), the trade deal the U.S. is working on with 11 Pacific Rim nations, Vietnam included, comes to fruition, the country could benefit biggest as imports of apparel and footwear from the country are expected to grow most significantly.

As such, brands and retailers are increasingly setting up shop in Vietnam in preparation for what they hope the TPP will bring, and the country is getting things set for a surge in sourcing.

The master plan

Vietnam’s strategic coastal location and proximity to other Asian nations makes it a prime transportation hub, and as its Department of Industry and Trade and the Vietnam Logistics Agency discussed at a meeting held last week, the country already has all the major modes of transportation—roads, rail, waterway and air—plus the appropriate pipelines.

The goal now, as Vietnam News reported, is to use those advantages wisely.

As part of the plan, Vietnam would build an international standard gateway port to serve as the country’s most important port for trade. Potential locations on the table include Hiep Phuoc, Cat Lai, Cu Chi and Linh Trung.

The country would also develop ring transportation systems and axis roads that lead to the gateway port, and place industrial parks and trade centers accordingly based on the greatest access to the port.

To get there, Vietnam will need to realize greater digitization of its processes—including an organized logistics information system and modern financial and payment services—in short order.

The current logistics conditions

Vietnam’s exports are increasing steadily, albeit slower than expected, but with competition increasing, the country will have to use all its available tools to stay ahead.

As of now, Ho Chi Minh City and its neighboring provinces have 12 inland container depots, and though many are connected with roads, waterway access is limited and infrastructure facilities near ports suffer from overloading, Vietnam News noted.

Those seaports without good road access are facing under capacity, and even those with good road connectivity are struggling to keep up with increasing demand.

“All of these have contributed to raising transport costs, thus stymieing the competitiveness of the domestic logistics sector,” Vietnam News reported.

The Vietnam Logistics Association said the country will be able to execute on the plan with the government’s support, plus support from logistics experts and local businesses.