Logistics in Mekong Delta yet to meet expectations

The Mekong Delta is a large agricultural exporter as well as goods and machinery importer, but logistics in the region has been insufficient to promote agricultural production and exports.

 

“Import and export activities in the Mekong Delta have been increasing thanks to international integration. The region needs a modern logistics system to reduce transport fees and increase competitive ability,” Nguyen Minh Toai, director of the Can Tho City’s Industry and Trade Department recently told the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

Most of the delta’s exports must transit through the Southeastern region including HCM City and Ba Ria – Vung Tau province, leading to an additional US$10 increase for each tonne of goods.

“The Mekong Delta is the key national agricultural region and plays a very important role in developing the national economy,” Pham Anh Tuan, general deputy director of the Port Coast Consultant Joint Stock Company, said.

“Logistics must improve to create favourable conditions for trade and increase competitive ability for regional agricultural products,” he added.

Experts calculate that if the region reduces 1 per cent of logistics expenditures each year, it could save around VND2 trillion ($87 million).

The Delta uses four main types of transport: road, sea, domestic waterway and air.

At present, airline services are serving only passenger transport, while 85 per cent of seaports in the region are small and serve only individual goods.

Of the total of 32 seaports in the region, only six of them have container loading services and three are located in Can Tho City.

In addition, many shipping companies do not want to come to these seaports because they can only enter through small canals and can only transport one way due to a lack of goods.

The road system is old and small and has no connection between the main traffic system and regional production areas.

To improve the situation, the enterprise community in the region has asked local authorities to open a cargo air route to Can Tho International Airport, improve roads, and invest in a railway system to the region.

“To develop logistics, authorities should create attractive investment policies along with better co-operation among customs offices, stores and other services,” Nguyen Thanh Han, director of Gennuine Partner Group company, said.

Recently, the Government and ministries agreed to build a second-level logistics centre in Cai Rang District in Can Tho City on an area of 30 hectares by 2020 and 70 hectares by 2030 for Can Tho City and the neighbouring provinces of Hau Giang, Kien Giang, An Giang, Soc Trang, Tra Vinh and Ca Mau.

At present, the Can Tho City Industry and Trade Department is building a master plan and is expected to announce investment policies by the second quarter of this year.

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