International Conference on Trends of Global Logistics and Incheon

- Focused on Infrastructure and Smart Technologies

NATIONAL LOGISTICS IN VIETNAM

ISSUES AND CHALLENGES

Presented by:
Associate Prof. Dr. Dinh Van HIEP
National University of Civil Engineering (NUCE), Vietnam.

Incheon, 23 November 2018

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Logistics: Contents

1 General information

2 Current situation

3 Action & solutions

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 Logistics: Operation diagram 3

Start point Destination

Export Import

Packaging, Packaging,
Transport Transport inspection,
inspection,
assembly, ... assembly, ...

Warehouse Warehouse
Customs Customs
Producers Consumers

Operation diagram of supply chain logistics

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Logistics: Six Sea-port groups/Container ports

(above 10,000 TEUs per year) 4

*) Source: World Bank (2014)

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 Logistics: Demand vs supply (southern ports) 5

Challenges

Demand and supply at southern region ports, 2000 – 2020

*) Source: World Bank (2014)

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Logistics: Demand vs supply (northern ports) 6

Challenges

Demand and supply at northern region ports, 2000 – 2020

*) Source: World Bank (2014)

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 Logistics: Hai Phong city 7

Haiphong Port

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Logistics: Hai Phong city 8

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 Logistics: Service models 9

1PL Logistics: organized & implemented by the

owner of the goods.

Logistics: Service provider is responsible only

2PL
a single activity in the logistics chain.

Logistics: On behalf of the owner, responsible

for goods management and implementation
3PL for every logistics activity, and to integrate all
logistics activities.

Logistics: Responsible to design-build-

4PL operate all logistics chain solutions by their
integrated resources, capacity, infrastructure,
and technologies.

5PL E-commerce platform (Smart Logistics)

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Logistics: Number of companies 10

Warehouse Delivery Transport Ports & Airports Int’l Transport

1980 - 1990 2018

20 Logistics companies Number of Logistics
ownership by companies about 4,000
the government according to VLA (2018)

Transport & Logistics:

● Road, Rail Transport
● Waterway Transport Few companies work under
● Air Transport association (VLA)
● Warehouse & Auxiliary & still work as individuals
● Post & Express
About 400 companies under VLA (VLA, 2018)

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 Logistics: Current situation/Index 11

Growth rate 12-14% per annum

LPI ranking of 39th/160 and ranking at 3rd in ASEAN

High cost (logistics) 20.8% of GDP

Low contribution to 3% of GDP (2014)

Low outsourcing (logistics) rates 35-40%

*) Source: World Bank (2016, 2018)

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Logistics: Logistics Performance Index (LPI) 12

*) Source: World Bank (2018)

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 Logistics: High costs compared with others
(for 100 companies in Vietnam, 2016)
13

*) Source: Armstrong & Associates, 2016

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Logistics: High costs 14

o High costs for warehouse (time consuming)

o High costs for (poor) transport network

o Additional costs for (delay) custom clearance/procedure

o High costs for non-transparent competitiveness

o Unexpected costs due to (changeable) legal/policies

o High costs due to unprofessional operation &

management (w/o technology application)

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 Logistics: Government policies 15

Decision No.
Decision 200 Resolution 19 Direction 21
Decree 163 708/QD-BCT
(14/02/2017): (15/05/2018); Resolution
(18/07/2018): (26/03/2019):
(30/12/2017): No.02/NQ-CP
National Action Reduce logistics & Plans for Logistics
Logistics services (01/01/2019): Logistics
Plan for Logistics business environment transport costs Performance
Index

 Develop LOGISTICS based on five (5) criteria: growth rate, LPI,

costs, GDP contribution, outsourcing;
 Improve the quality of logistics service;
 Reduce logistics & transport costs;
 Enhance the logistics business environment (domestic &
international).

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Logistics: National Action Plan (issued 2017) 16

Growth rate LPI 39th/160 High Low Low

12-14% & ranks 3rd logistics cost contribution outsourcing
per year in ASEAN 20.8% of GDP 3% of GDP rates 35-40%

by 2025

Growth rate Reduce High High

High
15-20% logistics cost contribution outsourcing
LPI with
16-20% to 8-10% rate of
per year rank top 50th
of GDP of GDP 50-60%

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 - Enterprise with small
capacity & non-professionals
Logistics: S-W-O-T analysis (70% with capital less than 17
1.0 mill. USD).
- Potential geography (Sea- - Transport infrastructure has
not yet finished/
port, Railway, Road, Air, ...); integrated/connected;
- Increasing a number of - Lack of ICT/technology for
logistics companies; operation and management;
- Strong attention of
government with more
opened policies of
S W -

-
Incomplete institutionalism
and unstable policies;
Lack of high standard human-
foreign investment; resource (85% enterprise
with self-trained).

O T
- Rapid increase of goods volume export-
import (sea-ports of 14,6% per year for
2010-2014).
- Strong attention of government for
improving custom procedure,
administration, internationalization.
- Government with PPP scheme
- Smart technologies
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- High investment on transport
infrastructure/network;
- Non-transparent environment for
competitiveness;
- Weakness on legal framework for logistics;
- Lack of high standard of human resource
for international integration.

Logistics: Action & Solutions (i) 18

Legal - Enhance legal framework for logistics

frameworks
(domestics & international)

- Improve an integrated transport network

Infrastructure
(Sea-port, Railway, Highway, Airport...)

Logistics - Improve the quality of logistics services and

Service logistics performance

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 Logistics: Action & Solutions (ii) 19

- Enhance capacity building for government &

Resources & improve high quality of human recourses;
Technology
- Apply technology & ICT (smart technologies)

- Improve transparent competitiveness to reduce

Business costs with high productivity & high quality;
environment - Internationalization (clearance of commercial
barriers)

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Case study:
Hai phong city

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Logistic development of Haiphong city

up to 2020, with vision 2025

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 Haiphong: total area of 1,527.4 km2, 1.967 million inhabitants, 15 district-level

administrative units (7 urban districts, 6 suburban districts and 2 island districts).
 In 2014, GDP per capita VND 54,489 million (2,400USD) , 1.4 times higher than
the national average

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 5 transportation modes: 23
1. Road
2. Railways
3. Inland water
4. Marine
5. Aviation
6. And pipeline (petrol)

Road
Inland water

Marine

Railway

In 2014

Road networks 24

NH5: 35,5km,
II level, 4 lanes
Vật Cách Port

Hoàng Diệu port

NH10: 52,5km,
III level, 2
lanes Chùa Vẽ - Đình Vũ
ports

Lạch Huyệnp port

(under construction)

HN – HP express
way: 105,5 km, 6
lanes
NH37: 20,1 km,
V level, 2 lanes

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 Railway networks 25

Hải Phòng :
- 01 international railway
- 01 national railway station
- 03 special railways (Haiphong
station to: Vật Cách port, 448km
Hoàng Diệu port, Chùa Vẽ
port.
Railway volume Hải Phòng 2011- 2015

- Average volume by railway :

2010 to present2020 : 1,2 – 1,4 300km
million tones/yeah
- Main goods: apatite, steel...
102km

Railway Hải Phòng – Lào Cai – Côn Minh

Vietnam Northern Sea port systems 26

Hải Phòng sea

port

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Sea port system:

The largest seaport system in

the north and 2nd in the country with
a total designed capacity of 55
million tons
The average growth rate of 2009
- 2015 is 14.6% / year, higher than
the average port group in the North
is 9.4 %. Good volume in Haiphong sea port
Lach Huyen international port
will be the biggest transshipment
port in the North with cargo capacity
of 35-41 million tons / year.

Inland water: 28
 8 lines, on 12 rivers, total length > 500km;
 136 ports, 46% are cargo handling ports, 35% are material ports,
the rest are mooring berths, repairing means.

Cargo port
Material port

Mooring port

Repairing

Classification of port and inland water in

Haiphong

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 Aviation 29

Cat Bi Airport has 4C level,

2,402m long runway, mid aircraft
such as Boeing 737-400, Airbus
320-321.
4 flights: HPH- Ho Chi Minh City,
HPH - Da Nang, HPH - Buon Me
Thuot, from Hai Phong - Nha
Trang.

Transportation pipelines 30

Petrol pipeline: from B12 port (Quang Ninh) to 131 storage (Hai Phong),
Hai Duong, Ha Noi and Ha Nam (260km long, total branch length > 550 km..

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 CORRIDORS TO HAI PHONG CITY
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INTERNATIONAL CORRIDOR

2 corridors and 1 economic belt -- The

corridor of Nam Ninh - Lang Son - Hanoi -
Hai Phong - Quang Ninh

- Economic corridor Kunming - Lao Cai -

Hanoi - Hai Phong - Quang Ninh.

- Economic belt in Norh gulf: Economic

cooperation between 10 provinces: Quang
Ninh, Hai Phong, Thai Binh, Nam Dinh,
Ninh Binh, Thanh Hoa, Nghe An, Ha Tinh,
Quang Binh and Quang Tri. city of
Guangxi (China).

CORRIDORS TO HAI PHONG CITY

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CKQT. Lào Cai

CKQT. Tân Thanh

CK Móng Cái

1 37
1
5 0
Cảng Cái Lân

DOMESTIC
Cảng Hải Phòng CORRIDORS
Distance
No Name Main line Main mode International
(km)

QL 5, Cao tốc Hà Nội –

Hải Phòng – Hà Road,Railway Côn Minh –
1 380 Hải Phòng, Cao tốc Hà
Nội – Lào Cai , inland water Trung Quốc
Nội – Lào Cai…

Hải Phòng – Hà QL 5, Cao tốc Hà Nội – Nam Ninh –

2 265 Road,Railway
Nội – Lạng Sơn Hải Phòng, QL 1... Trung Quốc
Ninh Bình – Hải
Road,Inland Đông Hưng –
3 Phòng – Quảng 260 QL 10, QL 18
water Trung Quốc
Ninh

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 ADAVANTAGES AND DISADVANTAGES
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1 ADVANTAGES

Position is a city near the sea, in the Northen economic area and the
triangular Hà Nội - Hải Phòng - Quảng Ninh. Belt of the business Việt -
Trung
Transportation

5 transportation modes
Important transport connection point
Sea port system developed
full Corridors system

Potential logistic for Haiphong city

ADAVANTAGES AND DISADVANTAGES

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2 DISADVANTAGES

The system not allocate potential capacity due to the depth

flow to port; traffic jam on road system connected to the port
area. Rail way gauge track 1000mm, .

The storage system difficult to improve upgrade, extended.

Inland water limited due to lack of service

Low speed construction of infrastructure

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Thank you!

Associate Prof. Dr. Dinh Van HIEP,

President, Institute of Planning and Transportation Engineering (IPTE);
National University of Civil Engineering, Hanoi, Vietnam.
Email: hiepdv@nuce.edu.vn or dvhiep.huce@gmail.com

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