Logistics infrastructure in Ho Chi Minh City has not kept up with the actual demand

This is the content shared by the delegates at the seminar on the potential and opportunities for the development of the logistics industry in Ho Chi Minh City organized by the Department of Industry and Trade of Ho Chi Minh City.

Mr. Le Huynh Minh Tu, Deputy Director of Ho Chi Minh City Department of Industry and Trade, said that Ho Chi Minh City's transportation is associated with 7 provinces and cities in the Southern Key Economic Region and is oriented to become a major economic hub. become a traffic hub connecting the Southeast region with the Southwest region, with the region and the world.

However, the current reality shows that the road system, especially the ring road systems 2, 3, and 4 is not complete; often congested roads to Cat Lao port, ICD (inland port) Truong Tho.

The North-South route is poorly connected to seaports and airports; has low output; outdated technical standards; lacks investment capital to upgrade and transform.

Tan Son Nhat Airport is overloaded; airport terminals are already at full capacity; not yet developed according to the model of an extended airport terminal.

There are 1,505 warehouses in Ho Chi Minh City, most of them have a small area and tend to shrink and move to neighboring provinces.

Ho Chi Minh City does not have a logistics center that fully meets the criteria according to the Prime Minister's Decision No. 1012/QD-TTg dated July 3, 2015, on approving the master plan for the development of the logistics center system in Vietnam. nationwide until 2020, with an orientation to 2030.

Ms. Dang Minh Phuong, Chairman of the Ho Chi Minh City Logistics Association, said that in 2022 and the first quarter of 2023, transportation and warehousing is one of the service industries with negative growth, reflecting the general difficulties of the economy and of logistics enterprises.

Transport volume decreased due to weak consumer demand, the total export turnover of Ho Chi Minh City in the first quarter of 2023 decreased by 17.92% and imports decreased by 19.31% over the same period; the Industrial production index decreased by 0.9%. Meanwhile, the inventory index in the first quarter of 2023 increased by 4%.

Aspects affecting logistics costs such as value-added tax (VAT) at the rate of 10%, the application of the port infrastructure fee in Ho Chi Minh City from April 1, 2022. In addition, fuel prices are always fluctuating, affecting the operation of logistics enterprises.

In that context, most logistics enterprises are currently small and medium-sized, so it is difficult to access loans to expand their business and develop the technology. With banks lending interest rates are quite high. Therefore, many businesses are facing challenges to expand their scale and invest in new projects.

Regarding the general situation, Ms. Dang Minh Phuong analyzed that the infrastructure is not synchronized, is slow to develop, and is not commensurate with the potential and development speed of the logistics industry. Many projects are behind schedule (Metro line, ring road 3.4), some projects lack capital, and while disbursement progress of public investment is slow.

Existing logistics centers, ICDs, and distribution centers are also fragmented and inconsistently distributed, which are also bottlenecks of logistics and freight activities.

According to Ms. Dang Minh Phuong, to improve logistics activities, it is necessary to promote connectivity infrastructure through planning highways, national highways, ICD systems, port clusters, inland waterways, and connecting traffic routes. connecting ports with industrial zones.

In addition, Ho Chi Minh City needs to issue a special thematic action plan to promote calling for investment in Hiep Phuoc industrial park (competing with industrial parks in neighboring provinces).

For businesses, the Ho Chi Minh City Logistics Association proposes to reduce VAT to 8% in 2023. Bring the logistics industry into the investment stimulus program, and support the city's loan interest rate.

More subjects are eligible for exemption/reduction of seaport infrastructure fees in Ho Chi Minh City.

The association also suggested that there should be policies and loan support for digital transformation businesses and technology companies to develop applications and solutions for digital transformation for the logistics industry.