Hà Nội's logistics industry development fails to meet potential

VIETNAM, May 2 - HÀ NỘI — The development of Hà Nội's logistics sector has failed to meet its full potential despite the city's favourable geographic location as the heart of the northern key economic region and quite systematic transport connectivity with road, sea, waterway, railway and air transportation, experts have said.

Currently, about 40 per cent of goods from other localities are being transported through the city. It is home to 10 industrial parks in operation and over 100 industrial clusters. It has also 150 supermarkets, 454 wet markets, and more than 10,000 convenience stores for about 10 million city residents.

Despite these advantages, the city's logistics development faces limitations and obstacles due to a small and fragmented system of warehouses and logistics yards and a lack of specialised storage such as cold and cool storage, according to experts.

A shortage of inland container depots (ICD), high logistics costs and traffic congestion also reduce the competitiveness of businesses.

About 25,000 local logistic enterprises are operating in the city. However, they can only meet about 25 per cent of the local demand, and handle 18 per cent of import-export goods. The remaining shares belong to those with foreign investment.

At the same time, the local logistics industry has been facing many difficulties due to the influence of geopolitics leading to the disruption of international shipping activities, chairman of the Hanoi Logistics Association Trần Đức Nghĩa said.

To facilitate logistics development, Hà Nội will accelerate the construction of logistics infrastructure projects in the area, while actively coordinating with localities at home and abroad to gradually build the city into a logistics operating centre of the northern region.

According to Nguyễn Mạnh Quyền, Vice Chairman of the municipal People's Committee, the city strives to start the construction of two dry ports in Cổ Bi and Đức Thượng communes in 2024, and plans the development of two new logistics centres in Phú Xuyên and Sóc Sơn districts.

Completing investment procedures for an international container port in Gia Lâm District's Cổ Bi and Đặng Xá communes will be also included.

Furthermore, the city will continue to attract domestic and foreign businesses to invest in the logistics sector. Thus far, it has introduced locations for developing nine logistics service infrastructure projects to investors.

Director of the city’s Science and Technology Department Nguyễn Hồng Sơn said that to support the development of logistic activities, the city needed to implement digital solutions and boost investment promotion in logistics service infrastructure projects.

Suggestions were raised to study and build logistics centres of appropriate scale on ring roads, connecting goods transiting hubs, warehouses and distribution areas in production, agricultural, industry, and industrial zones. Another solution was to develop smart transportation systems and digital platforms that connect good owners, transporters and customers.

Sơn also suggested the city promote logistics and connect the capital region to facilitate the transportation and distribution of goods from the city to other localities.

Creating conditions to promote the role of professional associations related to logistics services, and encouraging and attracting major international and domestic logistics service providers to set up headquarters, and branches and transaction offices in the city should be also included, Sơn said.

The plan to develop logistics services in Hà Nội by 2025 sets the goal to develop and support logistics activities to improve the competitiveness of manufacturing and trading enterprises and form a modern logistics system.

The city set a target for its logistics sector to contribute 9-11 per cent to the Gross Regional Domestic Product (GRDP) and obtain a growth rate of 17-21 per cent by 2025. Growth in outsourced logistics will reach 60-65 per cent.

Particularly, the capital city will develop a supply chain and distribution of agricultural products and food, and increase the application of information technology and e-commerce in business operations, including logistics services. — VNS