Ho Chi Minh City develops logistics as an economic pillar
English - Ngày đăng : 11:27, 17/11/2024
The Strategic Role of HCMC's Logistics Sector
The logistics sector is likened to the lifeline of the economy, connecting production with trade and consumption. According to the Resolution of the 11th Congress of the HCMC Party Committee, logistics development is one of the 49 key programs and solutions for the city to ensure sustainable growth.
In 2023, logistics contributed approximately 8.51% of HCMC’s GRDP, equivalent to nearly VND 140 trillion. With about 9,600 logistics enterprises (accounting for 36.7% of the national total), HCMC has asserted its leadership in the industry. Projects such as the Ring Road 3, major ports like Cat Lai and Hiep Phuoc, and the plan to build eight logistics centers are expected to enhance regional connectivity, reduce transport costs, and increase competitiveness within the global supply chain.
However, to unlock its full potential, the city must invest further in transportation infrastructure and smart logistics systems. According to Ms. Vo Thi Phuong Lan, Chairwoman of ASL Logistics, modernizing the logistics system is not only essential to meet domestic growth demands but also to attract foreign investors in the context of global supply chain shifts.
Bottlenecks to Be Resolved
Despite its great potential, the logistics sector in HCMC faces significant challenges:
Lack of synchronized infrastructure and slow progress: Unsynchronized logistics and transport infrastructure pose major obstacles. Ports such as Cat Lai and Nha Be, while achieving high throughput, are hindered by inadequate connectivity with key economic zones like Long An and Tay Ninh. The Ring Road 3, once completed, is expected to alleviate these issues, but its disbursement progress was only 22% of the plan in the first 10 months of 2024, placing enormous pressure on transport operations.
Additionally, the railway network connecting ports to industrial zones has not been sufficiently developed. The absence of rail links, such as between Cat Lai Port and Song Than Station, causes over-reliance on road transport, leading to high costs and extended delivery times.
High logistics costs: Logistics costs in Vietnam account for about 16-20% of GDP, significantly higher than the global average of 8-10%. This weakens the competitiveness of goods, especially when integrated into international supply chains.
Inadequate human resources and technology adoption: The shortage of high-quality human resources in logistics creates difficulties for businesses in optimizing operations. At the same time, the uneven adoption of smart technologies reduces productivity and the ability to respond to disruptions.
Opportunities from Global Supply Chain Shifts
Amid international trends, the shift of global supply chains away from China presents a significant opportunity for HCMC logistics. The city can capitalize on its strategic location and free trade agreements such as EVFTA and CPTPP to attract investment and develop a comprehensive logistics ecosystem.
According to Mr. Pham Thanh Son, Director of Hiep Phuoc Port, large-scale projects like Hiep Phuoc Port, Nha Be terminals (handling capacities of 45,000-70,000 DWT), and green logistics centers will strengthen the city’s maritime and inland waterway transport capabilities. These initiatives not only reduce costs but also enhance export-import competitiveness.
Furthermore, the e-commerce boom in Vietnam places logistics at the forefront. Mr. Nguyen Lam Thanh, CEO of Tiktok Vietnam, emphasized the need for businesses to improve warehouse capabilities and expedite deliveries to meet the growing demand for online shopping.
Experts also recommend advancing digital technology applications, developing intelligent supply chains, and fostering public-private partnerships to boost productivity. Ms. Vo Thi Phuong Lan highlighted the importance of building sustainable partnerships with international shipping lines to stabilize freight rates and mitigate risks from market volatility.
Sustainable Development Strategies
“Logistics is not only a critical bridge between production and consumption but also a launchpad for enhancing the competitiveness of HCMC’s economy as a whole. As the country’s largest economic hub, we must leverage every advantage, particularly our strategic geographic location and existing port systems, to make logistics a key driver of growth. Developing logistics will not only serve internal demands but also establish HCMC as a vital link in the global supply chain, enhancing Vietnam’s image internationally,” - Mr. Vo Van Hoan, Vice Chairman of the HCMC People's Committee.
His statement reflects the city’s determination and long-term vision to develop the logistics sector comprehensively and sustainably.
Developing logistics is not only an economic requirement but also a strategic imperative for HCMC to maintain its position as a leading economic hub. To achieve this, the city needs a holistic strategy focusing on infrastructure investments, improving workforce quality, and promoting digitalization in logistics management.
At the same time, adopting green logistics models, utilizing renewable energy, and reducing emissions are essential trends to meet global standards. Projects such as rail connectivity, port upgrades, and the construction of modern logistics centers should be prioritized to lower transport costs and improve supply chain efficiency.
With its existing potential and advantages, HCMC is poised to solidify its position as a logistics hub in the region. However, success will depend on the city’s ability to address bottlenecks, seize opportunities, and implement groundbreaking solutions to ensure sustainable and long-term development of the logistics industry.