Nghe An removes bottlenecks, rapidly developing logistics services.

Removing bottlenecks

It is no coincidence that at forums on attracting investment to Nghe An, along with the land access index, the quality of logistics services is one of the bottlenecks. This was even discussed at a workshop on solutions.Improve Nghe An's PCI index.In mid-October 2022, expert Dau Anh Tuan - Head of the Legal Department and General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) - frankly pointed out: The global economy is integrating and becoming increasingly flatter, and FDI investors place great importance on infrastructure when considering investment.

The reason Nghe An has not yet attracted major FDI projects is because the province is quite far from economic growth centers, the transportation infrastructure connecting industrial zones with seaports, airports, and railway stations is still inadequate and weak; and supporting industries, including...logistics servicesIt is not yet well-developed, so it has not become the top choice for large investors.

The fleet of fishing boats anchored near Cua Lo port is currently a bottleneck, making it difficult for international container ships to dock and unload cargo. Photo: Nguyen Hai

This viewpoint was once again shared by a representative of Saigon Newport Company at the forum on resolving difficulties in post-Covid-19 maritime transport services organized by the Ministry of Transport, with Nghe An as a participating location.

Accordingly, this shipping service provider argues that with global economic integration, a containerized shipment should not only be transported by sea but also by multiple modes of transport. Specifically, if the cheapest option is chosen, it can be transported by sea, but when needed, it can also be transported by road or rail. Therefore, loading and unloading infrastructure and logistics services must be invested in accordingly and interconnected.

With the advantage of being a pioneer and having well-invested infrastructure, countries and territories such as Singapore, Malaysia, Hong Kong… and domestically, Hai Phong, Da Nang, Ho Chi Minh City… have risen to become logistics service centers for the region and internationally. The logistics service industry has become a "golden goose". In Nghe An, although it has certain advantages, due to limited investment resources, the cargo handling capacity of the seaports is still somewhat limited, and the logistics services have not developed proportionally. Therefore, despite efforts, difficulties hinder progress.

Ships are loading cargo at Cua Lo port. Despite efforts to facilitate quick and convenient customs procedures, import and export companies still desire a dedicated logistics service center to handle their business needs. Photo: Nguyen Hai

Recently, after welcoming its first international vessel carrying 1000 TEU (container units) to Cua Lo port, in order to connect and promote the flow and export of goods through Cua Lo port,Southeast Economic Zone Management BoardIn coordination with Nghe Tinh Port Joint Stock Company, a workshop was organized to discuss solutions for promoting container cargo through Cua Lo port, with nearly 200 exporting businesses participating.

At the forum, representatives from the Vietnam Maritime Corporation shared plans to connect and open international container shipping routes through Cua Lo port to develop their production and business and support the province in promoting import and export activities. However, the Corporation remains concerned that the volume of goods is insufficient (300-500 containers/week), and the quality of logistics services and warehousing is not yet guaranteed.

Cargo ships weighing 10,000-15,000 tons regularly dock at Cua Lo port to load and unload cargo. Photo: Nguyen Hai

The concerns of transporters are well-founded, as the production lines and factory equipment of FDI enterprises in Nghe An all pass through Hai Phong port instead of Cua Lo. Furthermore, due to the limited number of containers, businesses need to find partners to consolidate enough containers before ships can depart on schedule. Connecting and opening a weekly international container shipping route to Cua Lo port is not only a desire of businesses and investors but also a realization of the province's determination to remove bottlenecks.

Logistics - the economy of the future

Recognizing the bottlenecks and seeing logistics as a promising industry, in August 2021, the People's Committee of Nghe An province issued a plan to enhance the competitiveness and development of logistics services in the province until 2025, in accordance with Decision No. 200/QD-TTg of the Prime Minister. Accordingly, along with prioritizing and investing funds in dredging and increasing cargo handling capacity at Cua Lo port, Nghe An proposed and received approval from the Prime Minister to adjust the investment plan for Nghi Thiet deep-water port (Nghi Loc); and to apply a public-private partnership mechanism to invest in upgrading Terminal T2 and runway infrastructure to double the current passenger and cargo handling capacity of the port.

Regular dredging of Cua Lo port ensures a depth of 9-10.5 meters, allowing ships up to 15,000 tons to enter and exit easily. Photo: Nguyen Hai

Furthermore, in order to facilitate Nghe An province, the central government also agreed to allow the province to have a mechanism to mobilize resources for land exploitation, site clearance, and investment.The road connecting National Highway 7C (Road N5) to Cua Lo Port.The policies supporting this project have been approved by the Provincial People's Council. Previously, to enhance connectivity and intermodal transport between rail and road with Cua Lo port, Nghe An province proposed to the Ministry of Transport and the Vietnam Railways Corporation to upgrade Nghi Long station (Nghi Loc) to facilitate the transportation of goods from Nam Cam, WHA, and VSIP industrial parks to Cua Lo port.

The N5 road (National Highway 7C), after the railway overpass to Cua Lo port is completed, will help connect the WHA Industrial Park with the port and improve the quality of logistics services for the province. Photo: Nguyen Hai

The Southeast Economic Zone Management Board is planning the establishment of duty-free zones and warehousing systems to gradually develop them.North Central Region Logistics Service Center in Nghe AnTo connect goods from the North Central provinces and the Northeast Thailand-Laos route via Cua Lo port.

According to experts, along with economic integration and digitalization, logistics services are not just a component indicator for attracting investment, but a sector of the future. It's no coincidence that in recent years, major brands with annual revenues of billions of USD have been associated with the name and reputation of global e-commerce and logistics service corporations. Similarly, in Vietnam, there have been innovative and successful startups in the logistics service sector.

The N2 road infrastructure connecting National Highway 1A with Tho Loc Industrial Park in Dien Chau district, part of the Southeast Economic Zone, is basically complete and is currently seeking investors. Photo: Nguyen Hai

Recognizing this potential, since May 2020, Vietnam Post Corporation has invested in and put into operation the North Central Region Transportation and Warehousing Center at VSIP Industrial Park. This event is significant in making Nghe An a regional center for freight transportation and logistics services. The center covers an area of ​​up to 21,600 square meters.²The automated sorting system has a capacity of 12,000 packages per hour, high accuracy, and multiple sorting modes that are detailed down to each post office. Delivery and transportation are carried out using cage-type vehicles, reducing delivery time, improving vehicle efficiency, and minimizing damaged goods.

Construction and installation of electrical infrastructure for WHA Industrial Park in Nghi Thuan commune (Nghi Loc district). Photo: Nguyen Hai

The world is entering the 21st century, the century of the ocean and logistics services. Vinh City, as the southern growth hub of Nghe An province, is developing by leveraging its advantages in seaports and coastal tourism in Cua Lo. Hoang Mai and Quynh Luu towns, as the northern growth hubs of the province, should follow this direction and not miss out on this advantage. By developing logistics services in the North, Nghe An will take advantage of the existing deep-water port infrastructure of Dong Hoi-Hoang Mai, thereby bringing goods from the western growth hub of the province to the world's largest markets; at the same time, effectively exploiting the comparative advantages of the dynamic economic region of South Thanh Hoa - North Nghe An to promote and rapidly shift the economic structure.

Architect Tran Ngoc Chinh - Former Deputy Minister of Construction, President of the Vietnam Association of Architecture and Urban Planning