Developing Logistics services to increase competition for Mekong Delta agricultural and fishery products

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That is the judgment of Mr. Le Duy Hiep – Chairman of Vietnam Logistics Association at the seminar “Enhancing connectivity to improve the value chain of agricultural and fishery products of the Mekong Delta” by Can Tho City People’s Committee cooperates with Vietnam Logistics Business Association (VLA) on April 23.

The workshop aimed at exchanging and discussing experts, businesses and state management agencies on existing issues and providing effective solutions, transport and logistics models to cut costs. Logistics aims to attract foreign investment and promote the import and export of agricultural and fishery products in Can Tho and the Mekong Delta region.

Speaking at the ceremony, Mr. Le Duy Hiep – Chairman of Vietnam Logistics Association – said that exporting agricultural and aquatic products has been the strength of Vietnam in general as well as the Mekong Delta and Can Tho City in particular, contributing significantly to the total import and export turnover of our country as the development of Vietnam logistics service industry.

According to the export and import report of 2018 announced by the Ministry of Industry and Trade, Vietnam’s total seafood export value reached 8.79 billion USD, fruit export was 3.81 billion USD, of which the Mekong Delta was key export center. However, through the statistics in at least 5 years, logistics costs for seafood and fruit import and export account for about 20-25%, so it is quite high compared to other countries in the region. (countries cost about 10-15%); Logistics infrastructure connection in the Mekong Delta region still has many shortcomings.

The Mekong Delta region contributes 40% of the value of agricultural production, over 50% of rice production, 90% of export rice output, 65% of seafood production, 70% of fruit production. This region is considered the largest granary, seafood barn in the country. Export turnover mainly comes from processed rice and seafood products; These 2 products account for 75-80% of the country’s total agricultural export turnover.

Mr. Le Duy Hiep – affirmed, with the requirement of perfecting the supply chain for preserving goods and fruits as well as the logistics supply chain for this item, is not a small challenge for manufacturers export, export, trade and logistics service providers, especially in the current context in the South western region.

“Vietnam Logistics Services Association always aims at a goal of how to improve logistics services in this area, enhance connectivity and on that basis, contribute to reducing costs of logistics services “- Mr. Hiep accented.

Mr. Nguyen Minh Toai – Director of Can Tho Department of Industry and Trade – shared that, because the main export products of the region are agricultural products and aquatic products, it is facing fierce competition with other countries in the region and affected by the Technical barriers should not increase output and export value.

In the past, one of the reasons for limiting the export of goods by maritime routes of the Mekong Delta provinces is Dinh An estuary, the main gateway leading Hau river to the shallow sea, large vessels can not go into. In an effort to pave the way for large-capacity vessels to access ports in the Mekong Delta, the project to widen Quan Chanh Bo canal and dig more off channels to the sea has been completed. This navigable channel can receive ships of 10,000 DWT and 20,000 DWT vessels into the Hau River, which previously was dredged annually but could only receive ships of less than 5,000 DWT ”.

According to Toai, currently Can Tho city is planning and calling for investment in construction projects of regional level II logistics centers. If this logistics center is formed, it will save the cost of transporting goods to Ho Chi Minh City and Ba Ria – Vung Tau and at the same time develop a new business of transport and logistics in Ho Chi Minh City. Can Tho is the center of the Mekong Delta region.

Forecasting the demand for transport of agricultural and aquatic products, it is expected that the total volume of transport of agricultural and aquatic products in the region is 12.62 million tons. In which, rice production by 2020 is about 10.2 million tons, aquaculture production and exploitation is about 2.42 million tons. Thereby, the logistics market of the Mekong Delta region in general and Can Tho city in particular is very potential, promising to develop and attract domestic and foreign investors.

“Every year, the demand for transporting export goods in the Mekong Delta region is about 17 to 18 million tons / year, however, 70% of these exports have to be transferred to major ports in Ho Chi Minh City and Cai Mep port, making transportation costs higher for businesses from 10-40% depending on the route. Therefore, the development of logistics services in Can Tho in general and the development of a regional level II logistics center in Can Tho is an urgent need and suitable to the economic development situation in the Mekong Delta “- Toai emphasized.

Mr. Truong Quang Hoai Nam – Vice Chairman of Can Tho City People’s Committee – said that the logistics system of the Mekong Delta is having many problems to solve. Cai Cui port, despite being expected to export goods to the region, but large vessels cannot enter the port due to entanglement. The city has planned 242.2ha at Cai Cui Port to be a second-class logistics center, connecting the region to the region and connecting localities throughout the country and the region. But logistics development cannot alone be possible in Can Tho, if we invest in logistics without an incoming shipment, it will not be effective. Therefore, logistics development needs a connection between localities and businesses.

According to Mr. Nam, logistics development is an urgent need of Can Tho city, as well as Mekong Delta. In the past, Can Tho City has prepared and planned logistics for sea, air, road and rail transport in the future. However, there needs to be a connection with the regional provinces, communication and multimodal connectivity to succeed.

According to Mr. Nguyen Hoai Nam – Deputy Secretary General of Vietnam Association of Seafood Exporters and Processors, the investment budget for seafood in the Mekong Delta in particular and the country in general compared to the general structure is still not commensurate with the potential to develope. The ports in the Mekong Delta are lacking, especially deep-water ports capable of serving export container ships.

Duong Nghia