Part 5: Regional Connectivity and the Role of Free Trade Zones in Vietnam’s Logistics Development

1. Optimizing Supply Chains

Regional connectivity streamlines the flow of goods between areas, reducing transportation time and costs. Vietnam’s elongated geography, stretching from north to south, provides a natural advantage for linking key economic regions like the Mekong Delta, Southeast Vietnam, and the Red River Delta through logistics corridors.

Strong inter-regional connections not only maximize local economic potential but also foster multimodal logistics development, including road, rail, seaport, and air transport. Well-planned FTZs can serve as strategic transshipment hubs, connecting economic centers and optimizing supply chains.

2. Strengthening Regional and National Economic Power

For example, linking FTZs in Southeast Vietnam with major ports like Cai Mep – Thi Vai enhances export capacity and reduces logistics costs for manufacturers. Similarly, the Mekong Delta can leverage FTZs to boost domestic and international agricultural trade.

1. Driving Development in Key Economic Regions

FTZs, as highlighted in the Vietnam Logistics Report 2024, are hubs for production, storage, and distribution activities. They help businesses optimize operational costs while acting as bridges between key economic regions.

Da Nang, with its FTZ connected to Lien Chieu Port, is emerging as a central link in the East-West Economic Corridor, connecting Central Vietnam to international markets. Similarly, FTZs in Hai Phong and Northern Vietnam can drive regional expansion and interprovincial logistics corridors.

2. Enhancing Inter-Regional Infrastructure

FTZs play a pivotal role in shaping and promoting major infrastructure projects, including inter-regional highways, railways, and seaports. For instance, the establishment of FTZs in Southeast Vietnam has spurred the development of road networks connecting Binh Duong, Dong Nai, and Ba Ria – Vung Tau, creating a comprehensive regional logistics network.

Efficient FTZ operations not only strengthen the flow of goods between regions but also optimize related logistics services, such as warehousing, freight forwarding, and distribution. This boosts the competitiveness of the national logistics system as a whole.

1. Integrating FTZs into Regional Development Strategies

FTZ planning should align with regional economic development strategies, ensuring that each FTZ contributes to the broader development of its region.

For instance, prioritizing FTZ development at strategic intersections, such as near major seaports or production centers, can maximize their role in connecting economic regions.

2. Investing Heavily in Connectivity Infrastructure

Comprehensive investments in inter-regional transportation infrastructure, including highways, railways, and seaports, are crucial for enhancing connectivity between FTZs and nearby economic regions.

The government should prioritize funding for critical infrastructure projects, such as the North-South Expressway or specialized freight rail lines. Additionally, developing logistics hubs linked to FTZs will ensure efficient storage, sorting, and distribution of goods.

3. Strengthening Collaboration Between Local Authorities and Businesses

Regional connectivity requires close cooperation between local governments and businesses. Provinces and cities should establish mechanisms for coordinated infrastructure development and logistics project implementation.

Regional connectivity is the foundation for FTZs to maximize their role in logistics and economic development. FTZs not only enhance inter-regional connections but also serve as key hubs for integrating Vietnam’s logistics sector into the global economy.

Achieving this requires synchronized planning, substantial infrastructure investments, and strong collaboration among local authorities, businesses, and the government. When executed effectively, FTZs will become powerful tools for elevating Vietnam’s logistics sector to new heights, contributing to a modern and sustainable economy.