Nghe An removes 'bottlenecks', rapidly develops logistics services

Remove bottlenecks

It is no coincidence that at forums on attracting investment in Nghe An, along with the land access index, the quality of logistics services is one of the bottlenecks and bottlenecks. Right at the workshop on solutionsimprove PCI index Nghe AnIn mid-October 2022, expert Dau Anh Tuan - Head of the Legal Department, General Secretary of the Vietnam Chamber of Commerce and Industry VCCI frankly pointed out: The world economy is integrating and becoming flatter, FDI investors when considering investment pay great attention to infrastructure factors.

The reason why Nghe An has not yet attracted FDI "mega-projects" is because the province is quite far from the economic growth poles, the transport infrastructure connecting the Industrial Park with seaports, airports, and railway stations is still inadequate and weak; supporting industries, includinglogistics servicesNot yet developed so it has not become the first choice of large investors.

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

The above viewpoint was once again shared by a representative of Tan Cang Saigon Company at the forum to remove difficulties in maritime transport services after Covid-19 organized by the Ministry of Transport, in which Nghe An was a participating point.

Accordingly, this shipping service provider believes that global economic integration means that a containerized package can not only be transported by ship but also by multimodal. Specifically, if the cheapest freight cost is chosen, it is by ship, but when necessary, it can also be transported by road or rail. Therefore, loading and unloading infrastructure and logistics services must be invested in accordingly and connected to each other.

With the advantage of being ahead and having well-invested infrastructure, countries and territories such as Singapore, Malaysia, Hong Kong, etc. and domestically Hai Phong, Da Nang, Ho Chi Minh City, etc. have risen to become regional and international logistics service centers. The logistics service industry has become the "golden goose". In Nghe An, although there are certain advantages, due to limited investment resources, the port's cargo handling capacity is still limited, and logistics services have not developed commensurately, so despite efforts, difficulties limit wisdom.

Ships loading cargo at Cua Lo port. Despite efforts to facilitate quick and convenient procedures, import and export companies still want to have their own logistics service center to handle procedures for businesses. Photo: Nguyen Hai

Recently, after welcoming the first international ship carrying 1000 TEU (container unit) to Cua Lo port, to connect and promote the circulation and export of goods through Cua Lo port,Southeast Economic Zone Management BoardCoordinated with Nghe Tinh Port Joint Stock Company to organize a workshop to discuss solutions to promote container cargo through Cua Lo port with the participation of nearly 200 export enterprises.

At the forum, representatives of Vietnam National Shipping Lines shared plans to connect and open international container shipping routes through Cua Lo port to develop its production and business and support the province in promoting import and export activities. However, the Corporation is still concerned that the volume of goods is not enough 300-500 containers/week, and the quality of logistics and warehouse services is not guaranteed.

Cargo ships from 10,000 to 15,000 tons regularly dock at Cua Lo port to load goods. Photo: Nguyen Hai

The above concerns of transporters are well-founded when the production lines and equipment for installing factories of FDI enterprises in Nghe An all go through Hai Phong port instead of Cua Lo. In addition, due to the small number of cargo containers, enterprises must find partners to collect enough containers for ships to depart on schedule. Connecting and opening international shipping routes with containers arriving at Cua Lo port every week is not only the desire of enterprises and investors but also the realization of the province's determination to remove bottlenecks.

Logistics - the economy of the future

Recognizing the above bottlenecks and realizing that logistics services are a potential industry, in August 2021, the People's Committee of Nghe An province issued a Plan to improve competitiveness and develop logistics services in the area by 2025 according to Decision No. 200/QD-TTg of the Prime Minister. Accordingly, along with prioritizing and investing funds to dredge and increase cargo handling capacity at Cua Lo port... Nghe An has proposed and received approval from the Prime Minister to adjust the investment plan for Nghi Thiet deep-water port (Nghi Loc); applying a capital mobilization mechanism in the form of a combination of public and private capital to invest in upgrading Terminal T2 and runway infrastructure to double the current capacity of passenger and cargo transportation through the port.

Regular dredging of Cua Lo port ensures a depth of 9-10.5 m to ensure smooth entry and exit for ships up to 15,000 tons. Photo: Nguyen Hai

Next, in order to create favorable conditions for Nghe An, the Central Government also agreed to allow the province to have a mechanism to mobilize resources to exploit land funds for site clearance and investment in construction.connecting road from National Highway 7C (Road N5) to Cua Lo Port. The support policies for this project have been approved by the Provincial People's Council. Previously, to enhance the connectivity and intermodality between railways and roads with Cua Lo port, Nghe An province proposed to the Ministry of Transport and the Railway Corporation to upgrade Nghi Long station (Nghi Loc) to facilitate the transportation of goods from Nam Cam, WHA, VSIP industrial parks to Cua Lo port.

Road N5 (National Highway 7C) after having a railway overpass to Cua Lo port will help connect WHA Industrial Park with the port and increase the quality of logistics services for the province. Photo: Nguyen Hai

The Southeast Economic Zone Management Board is planning duty-free zones and warehouse systems to gradually form them.North Central region logistics service center in Nghe Anto connect goods from the North Central provinces and the Northeast Thailand-Laos route through Cua Lo port.

According to experts, along with economic integration and digitalization, logistics services are not only a component indicator to attract investment but also an economic sector of the future. It is no coincidence that in recent years, major brands with annual revenue of billions of USD are associated with the name and reputation of the world's e-commerce group specializing in transportation and logistics services. Similarly, in Vietnam, there have been creative and successful startups from logistics services.

The infrastructure of N2 road connecting National Highway 1A with Tho Loc Industrial Park, Dien Chau district, in the Southeast Economic Zone, has been basically completed and is calling for investors. Photo: Nguyen Hai

Realizing this potential, since May 2020, Vietnam Post Corporation has invested and put into operation the North Central Region Transportation and Logistics Center at VSIP Industrial Park. This event is significant in making Nghe An a regional freight and logistics service center. With an area of ​​up to 21,600m², automatic sorting line system with a capacity of 12,000 packages/hour, high accuracy, many detailed sorting modes for each post office. Delivery and transportation activities are carried out through the delivery method by mesh cage trucks, reducing delivery time, improving vehicle efficiency, and reducing the rate of damaged goods.

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

The world is entering the 21st century, the century of the ocean and logistics services. Vinh City, as an urban area, the southern growth pole of Nghe An, is developing in the direction of exploiting the advantages of seaports and developing Cua Lo sea tourism. Hoang Mai - Quynh Luu Town is the northern growth pole of the province, which needs to follow this direction and should not miss this advantage. With the development of logistics services in the North, Nghe An will take advantage of the existing deep-water seaport infrastructure of Dong Hoi - Hoang Mai, thereby bringing goods from the western growth pole of the province to the large world market; at the same time, effectively exploiting the comparative advantages of the dynamic economic region of Nam Thanh - Bac Nghe to promote and rapidly shift the economic structure.

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