“Nghe An needs special policies for logistics service businesses”

According to Mr. Nguyen Duy Minh - General Secretary of Vietnam Logistics Association, as an investor, when deciding to invest in any location, in addition to land incentives, labor advantages, and taxes, the very important issue they care about is the cost of transporting a container from the place of production to the seller.

Currently, in Nghe An, factories must access the nearest gateway port, Hai Phong port, a distance of more than 400km with a cost of more than 8 million VND/40-foot container by road.

Nghe An's advantage is that Cua Lo port with 2 terminals No. 3 and No. 4 is serving very well coastal container transport, domestic container transport connecting Ho Chi Minh City, Da Nang, Hai Phong with a frequency of 3 trips/week.

This is a good enough frequency, enough for us to think about organizing a conference with investors as well as coastal transporters in Nghe An, Ha Tinh and neighboring areas, to discuss solutions to gather that source of goods through Cua Lo port and use coastal transport to connect with Hai Phong port to connect with Ho Chi Minh City to reduce transportation costs.

Mr. Nguyen Duy Minh - General Secretary of Vietnam Logistics Association at the Conference. Photo: Duc Anh

It is known that currently, the cost of coastal transport for container goods from Cua Lo to Hai Phong is 3.7 million/40-foot container plus the cost of transporting about 1 million VND from the factory to Cua Lo port. So compared to the cost of 8 million by road, that is a huge difference that investors need to consider. Moreover, in the future, the scale of investment will increase more and more.

According to Mr. Minh, in terms of infrastructure, Cua Lo port has basically met the needs, the issue we need to pay special attention to is long-term strategic connection services.

The General Secretary of the Vietnam Logistics Association emphasized that related to Logistics services is human resources. As a Logistics industry, the Vietnam Logistics Association is willing to help universities in Nghe An if they are interested in training high-quality human resources in Logistics services. "We share training copyrights as well as supply chains with universities so that they can train together for Nghe An province as well as the North Central provinces to welcome new investment sources" - Mr. Minh affirmed.

In addition, the strategic position of Nghe An in the trade relationship between China - Vietnam - Laos and Thailand, according to the Vietnam Logistics Association, is that the flow of goods from Northern Thailand is currently shifting through the Cha Lo border gate, through Nghe An, to Hanoi and to China. As for the source of goods from Laos in the future, there will be the Vinh - Vientiane - Hanoi highway.

Large ship docks at Cua Lo port to pick up cargo. Photo courtesy

Thus, this is an advantage for Nghe An to take advantage of Decision 1012 on planning Logistics centers. In the North Central region, there is a planning for a Class II Logistics center. Logistics centers are the heart to create effective Logistics costs.

The General Secretary of the Logistics Association also recommended that, along with having a good planning for the Logistics center, the province should pay attention to planning regional industrial zones between Nghe An - Ha Tinh - Thanh Hoa to form industrial clusters, avoiding fragmentation. Because if fragmented, it will reduce the efficiency of connecting the cargo area to the Logistics center. Thus, the optimization of the Logistics center will not be fully utilized.

The Logistics Association also wants to work with the province to study the trend of restructuring and rearranging investors from Thailand to take advantage of investment opportunities.

Mr. Minh informed that according to the survey of ALG organization, the study of Logistics costs based on the supply chain of goods sources shows that transportation costs account for over 60%. If we do not solve transportation costs effectively, it will be difficult to make goods more competitive. In the long term, Logistics services will be a lever to promote commercial production and investment. Therefore, Nghe An as well as many other localities are interested and have special priority policies for Logistics service businesses.