Opportunity to turn logistics industry into a spearhead

The National Assembly has issued Resolution No. 98/2023/QH15 on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City. Ms. Pham Thi Bich Hue, Chairwoman of the Board of Directors of Western Pacific Group, hopes that Ho Chi Minh City will take advantage of this Resolution to turn the logistics sector into a spearhead economic sector of the City.

To soon build logistics centers, Ho Chi Minh City should have an open mechanism to invite private enterprises to invest.

Ms. Pham Thi Bich Hue, Chairwoman of Western Pacific Group

Ho Chi Minh City has many favorable conditions to develop logistics into a spearhead economic sector, but it seems that the City is missing this opportunity. What is your comment on this?

It is true that Ho Chi Minh City has many advantages to become a major logistics center of the South, when major traffic hubs such as airports, train stations, and seaports are all located in the City. Moreover, the City also has full means of transportation including road, rail, waterway, and air, so it is very convenient for the circulation of goods and the development of logistics services.

However, in general, for a long time, the City has not taken advantage of this advantage. Currently, issues of infrastructure, human resources, and logistics services have not met the development requirements of the City in particular and the Southern key economic region in general.

Many people say that the logistics industry in Ho Chi Minh City is facing many bottlenecks. What do you think are those bottlenecks?

The biggest and most “painful” bottleneck for logistics development in Ho Chi Minh City is still traffic infrastructure. Although the City has invested in infrastructure in recent years, it has been very slow and cannot keep up with development needs. The construction of Ring Roads 2 and 3, and the roads leading to Cat Lai Port are slow, leading to prolonged traffic jams, increasing logistics costs for businesses. Up to now, Cat Lai Port and Tan Son Nhat International Airport are often overloaded, greatly affecting logistics activities...

Logistics centers, inland container depots (ICDs), and distribution centers are currently scattered. The city has planned eight large-scale logistics centers, but none have been built yet. This shows that the city’s logistics infrastructure in general still has many bottlenecks that have not been resolved.

Not to mention the lack of human resources serving the logistics industry. Students trained at universities cannot meet the needs of businesses.

To soon build logistics centers, Ho Chi Minh City should have an open mechanism to invite private enterprises to invest.

Through many seminars, the City leaders also identified bottlenecks and implemented a number of solutions, but it seems the results are still not as expected?

I think that the planning orientation for investment in the transport system, dry ports and logistics centers is mostly on the right track, but the implementation is too slow to keep up with the development needs of the logistics industry.

As I said above, the solutions that the City is implementing have been more or less effective, but due to slow and unsynchronized investment, the results have not been as expected.

Ho Chi Minh City aims to make logistics a spearhead industry with a service revenue growth rate of 15% by 2025 and 20% by 2030. To achieve this goal, what do you think Ho Chi Minh City needs to do?

I think that to clear the bottlenecks of logistics in Ho Chi Minh City, we must first speed up the construction of traffic infrastructure. National highways such as National Highway 13 connecting to Binh Duong , National Highway 22 connecting to Tay Ninh, National Highway 50 connecting to Long An and expressways such as Ho Chi Minh City - Moc Bai, Ho Chi Minh City - Thu Dau Mot - Chon Thanh need to be invested faster. A good sign in 2023 is that the City has started construction of Ring Road 3, expanding National Highway 50 connecting Ho Chi Minh City with Long An.

The construction of regional infrastructure connections with Ho Chi Minh City is very important, requiring localities in the region to join hands to implement. Recently, a positive signal is that the Ring Road 3 and Bien Hoa - Vung Tau Expressway have been simultaneously started by localities, the section passing through which locality is implemented. In my opinion, this plan should continue to be promoted for regional infrastructure construction projects, in order to promote the development of logistics activities.

For logistics centers and distribution centers, Ho Chi Minh City should study planning in conjunction with traffic hubs such as airports, seaports, and industrial parks to optimize connectivity between transportation routes and warehouse systems, ensuring smooth flow of goods.

To build logistics centers soon, the City should invite private enterprises to invest. Just create a transparent mechanism and approve procedures quickly, then I think, enterprises will come in. If we can develop a centralized logistics center and expand the scale of service according to the full package chain, we will maximize the potential of the logistics industry in Ho Chi Minh City.

Regarding human resources, the City can open a university specializing in logistics training to provide human resources for the City and the entire Southern region.

Ho Chi Minh City needs to demonstrate its leading role, connecting with logistics areas of provinces and cities; synchronously developing supporting industries, especially industries related to information technology to solve the problem of logistics time and costs. The city needs to act faster and stronger in logistics development, not just stopping at building a project that has not been implemented for many years.

From a business perspective, what suggestions do you have for Ho Chi Minh City to develop the logistics industry?

On the business side, we propose that logistics infrastructure planning must be in-depth and detailed, similar to commercial and industrial planning to help logistics businesses and retail units have a basis to go in the right direction and gather common strength.

In addition, the policy system is something that needs to be discussed. Logistics is a very broad industry, if divided, it will have many tasks, so it is necessary for the Government to issue specific, separate policies and bring them under a unified management agency, instead of issuing general regulations related to many ministries and sectors, making it very difficult for businesses to implement.

On the part of the Ho Chi Minh City government, it is necessary to create a transparent mechanism in investment procedures for logistics enterprises. Any infrastructure items that enterprises desire and have the ability to invest in should be left to the enterprises.

I hope that Ho Chi Minh City will take advantage of Resolution 98/2023/QH15 to turn the logistics sector into a spearhead economic sector of the City, avoiding missing opportunities.

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