At the Vietnam Logistics Conference 2024 held on October 31, Mr. Bui Thien Thu, Director of the Inland Waterways Department under the Ministry of Transport, shared that the country’s sea ports are currently connected mainly by road systems, with some rail connections but not many.
“The question arises as to what the role of inland waterways should be, given such favorable natural conditions,” “because if exploited effectively, I believe it will greatly reduce logistics costs,” he said.
Currently, inland waterway transportation accounts for 20% of the total cargo transportation in the country, but in contrast, public investment in this route accounts for less than 2%. In a World Bank study, according to Mr. Thu, Vietnam can reduce a small portion of its investment in roads and shift it to inland waterways, but the efficiency gains could be significant due to the utilization of natural advantages.
To boost the development of inland waterways, public investment is needed to lead and create capital for private investment. “The river sector is currently very difficult to call for private investment in infrastructure because the capital recovery process will be different from roads or other services”, he said.
To encourage the market to use this route, Ho Chi Minh City is applying a 50% reduction in port infrastructure fees for all goods transported by inland waterways to the city’s ports from August 2022.
“Although it reduces the city’s budget, I believe we will gain much more,” said Mr. Thu, adding that the city is collecting more than VND 3,000 billion per year from this fee but he still expects a further reduction. The benefits include helping to shift the transport structure from road to water, reducing emissions, limiting the risk of traffic accidents, congestion, and saving maintenance costs.
Experts at the workshop on October 31. Photo: Tu Kinh
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There is a need for more logistics centers and free trade areas
During the workshop, which aimed to improve Vietnam’s logistics system to reduce costs and compete with other Southeast Asian countries, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department under the Ministry of Industry and Trade, mentioned the need for logistics centers and free trade areas.
According to him, infrastructure such as roads and transportation is often considered when talking about logistics, but logistics centers play an equally important role. These are considered “static” infrastructure, where goods are assembled, connected, and distributed for both domestic and foreign markets.
Meanwhile, the development of logistics centers in Vietnam has been rather fragmented, as evidenced by the small number of centers and a lack of large-scale, modern centers capable of supporting the linkage of localities and logistics businesses.
“I hope that in the future, there will be logistics hubs that bring together many logistics centers and can handle multiple functions,” the expert expected.
Regarding the free trade area, Mr. Hai said that it has been mentioned a lot recently. In addition to its logistics function, this area allows the establishment of service facilities, including logistics services. For example, splitting, packaging, and adding value to goods.
“This will be a place that creates attraction, promoting the transshipment of goods from other countries through Vietnamese territory,” he said, adding that many localities now wish to develop this area. The National Assembly has recently allowed a pilot project in Danang and soon may be in Hai Phong, Ba Ria-Vung Tau. Areas with strong cargo flows such as airports can also be developed, such as the Long Thanh airport area, or border gates like Lang Son, Lao Cai…
Mr. Le Tuan Anh, Head of the Industrial and Service Economics Department, Ministry of Planning and Investment, also said that many localities sharing borders with other countries are proposing to build tax-free zones or cross-border trade areas. These projects are being compiled for obstacles to be presented to the competent authority.
In addition, Lang Son province is piloting a smart border gate model, which, if successful, will have a very fast clearance capacity, operating 24/7, and extremely low costs. “Although there are still many institutional difficulties, they are being gradually resolved,” he admitted.
