HCM City (VNS/VNA) – Ho Chi Minh City’sDepartment of Industry and Trade has reported to the municipal administrationthat it is appraising tenders from contractors to develop logistics facilitiesand turn the city into a logistics hub for Southern Vietnam.

Nguyen Ngoc Hoa, deputy director of the department,said the project aims to develop the city into a national transshipment portwith ports linked with Cai Mep-Thi Vai international port and build a networkof inland container depots, reducing the high logistics costs.

The department will also hold conferences to discusspolicies, regulations and funding to submit the project for the city’s approvalin October.

HCM City aims to develop three logistic centres: oneeach in its south and north and one for aviation. The former two are expectedto be at least 40 hectares in size in 2020 expanding to 70ha by 2030.

The city also targets annual growth of 25 percent forthe logistics industry and for it to account for around 10 percent of itseconomy.

The project is part of the city’s efforts to fostersocio-economic growth. Other efforts include speeding up projects that arelagging behind, equitising public businesses and pushing for smart citydevelopment.

HCM City has relatively developed logisticsfacilities and is the most important area in the southern key economic zones.According to the Vietnam Seaports Association, the city’s ports are leading interms of the number of containers passing through, accounting for 58.8 percentof the whole country’s traffic.

The 130ha Tan Cang-Cat Lai Port in district 2, thebiggest international port in Vietnam, accounts for 48 percent of the country’scontainer throughput due to its proximity to the city centre, industrial zonesand storage spaces.

The 18.7ha Tan Cang-Hiep Phuoc Port is situated in thesouth of HCM City with roads connecting to various industrial zones, making itthe main route for goods from these zones and the Mekong Delta.

Saigon Newport Corporation is investing more into theport, including in 300 hectares of storage space, container terminals and ageneral port.

District 9’s Sai Gon Hi-tech Park has a bondedwarehouse and a well-equipped, 10ha logistics centre for domestic distributionand exports, and is located near provinces such as Dong Nai, Binh Duong and BaRia-Vung Tau.

However, logistics costs are higher in Vietnamthan in most Southeast Asian countries but the sector’s contribution to thecity’s economy is minimal.

The high costs also detract from Vietnamese goods’competitiveness on the global market. The city also lacks rail links to ports.

Tan Son Nhat airport is bursting at the seams. In2017, it handled 36 million passengers, which was far above the designed limit.A plan to upgrade capacity to 50 million a year was approved last year.

Several industry experts said to develop the city’slogistics, the market for high-quality, competitively-priced third partylogistics services must be developed.

Better connectivity between ports and warehouses aswell as more clarity and fairness in regulations and administration are needed,they said.

They said e-logistics using modern technologies and acentral distribution network formed around locations such as airports andseaports for storing and distributing goods to the city distributors are alsorequired.-VNS/VNA