Strategic cooperation deal to take over agricultural transportation
Strategic cooperation deal to take over agricultural transportation
High transportation costs are reducing the competitiveness of Vietnamese agricultural products.
Vu Trong Tue, general director of Tan Nam Chinh Vietnam Cold Logistics (Tan Nam Chinh) told VIR’s Vu Kha his views on the competitiveness of Vietnamese agricultural products after his company signed a cooperation deal with Vietnam National Shipping Lines’ Haiphong branch (Vinalines Haiphong) on multimodal transport, aiming to reduce costs.
Could you share your evaluation on the competitiveness of the transportation costs of farm produce?
According to the World Bank, on a scale of 100, Vietnam has reached 55.7 points in logistics operations of farm produce, 60.6 points in product quality management, and 48.4 points in commercial agribusiness.
Compared to the Philippines, Vietnam is superior in quality management, but inferior in logistics and trade activities. The average loss ratio in the industry is 25-30 per cent. In particular, vegetables and fruits can reach up to 45 per cent, depending on the processing and transportation methods.
The main causes of this high loss ratio are limited mechanisation, transportation, and infrastructure. Especially for agricultural exports, product quality and competitive advantages depend on the quality of the freezer supply chain. Without a consistent global-standard freezer supply chain, it is very hard for Vietnamese agricultural exports to be displayed on the shelves of domestic and foreign supermarkets.
How does the Tan Nam Chinh-Vinalines Haiphong deal affect the development of this supply chain?
Through the cooperation with Vinalines Haiphong and strong shipping advantages, Tan Nam Chinh has found a new, more efficient means which is 20 per cent cheaper than the road transportation of frozen agricultural products and fruits in the North-South journey.
Tan Nam Chinh is committed to the “door-to-door” service as the Vinalines fleet usually docks at Saigon and Haiphong Ports, helping connect to the company’s freezer system on the farms with those in place for export. Thus, partners feel secure and comfortable with Tan Nam Chinh, as we are fully responsible for delivering products directly to consumers at the lowest cost, even in the bumper crop.
How will Tan Nam Chinh develop under this cooperation?
Tan Nam Chinh owns a transportation fleet made in the US that can deliver up to 15-20,000 containers a year, meeting the demand for transporting farm produce, even in the bumper crop period.
Owning a 30,000-square-metre freezing system that can handle 20,000 tons of goods a month, right in the main agriculture-forestry-fishery export areas in Binh Thuan, Long An, Tien Giang, and Ben Tre provinces, Tan Nam Chinh has a major advantage in the Vietnamese logistics market.
Tan Nam Chinh has so far been a trusty traditional partner of most domestic and international shipping firms, such as Vinalines, WanHai, APL, Maersk Line, CMA, and KMTC. Thus, we can support customers as well as manufacturers to optimise costs for freezer transportation of agricultural products from the farms all the way to China, South Korea, Japan, Middle East, Europe, and North America.
According to the deal, Tan Nam Chinh and Vinalines Haiphong have become strategic partners in delivering frozen products by sea in the domestic and ASEAN markets. This helps save 20 per cent of road transportation costs.
