Vietnam’s Transportation Sector Essay

Added on - 13 Nov 2020

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I.ABSTRACTThe essay reviews the foremost concern that Vietnam’s transportation sector has been enduring -transport expenses. The issue involves factors that contributed to the high expenses such asunderdevelopment road and maritime infrastructures, the risen number of vehicles, theunnecessary shipping time, etc. It is important to discuss these factors as they affect the country’slogistics industry and economic wealth directly. Recommendations for these difficulties involvethe implementation of technology (e.g. RFID for fast inspecting) and the change in national’spolicies (e.g. custom bonds for imported goods). Even though there are recommendations yetproblems regarding infrastructure development have not been solved completely and it isexpected due to Vietnam’s financial situation.II.INTRODUCTIONVietnam is said to have the 5thbiggest port in ASEAN (Das 2018). He reported that the country’sexternal trade practices and the expansion of maritime freight traffic have increased significantlyand is still growing. Nhandan Online (NDO 2019) also acknowledged that Vietnam’s exportrevenue in the first quarter of 2019 is approximately 59 billion USD and there are over 128million tonnes of goods arriving through Vietnam’s seaports. Therefore, maritime transportationcan be seen as a potential sector that contributes to the economy’s wealthHowever, as the chairman of the HCM City Goods Transportation Association claimed(Vietnamnews 2018), the port systems are unable to operate to the fullest as obsolete facilitiescreate too much unnecessary loading time, which leads to cargo congestion. Furthermore,Mackey (2009) pointed out that the lack of connectivity between port and surrounding roads isanother drawback for maritime transporting method due to the time-consuming deliveringprocesses. Compare to some neighboring countries, Vietnam’s port infrastructure ranking 82 outof 137 countries as the least attractiveVietnamThailandSingaporeMalaysia8263220Figure 1:Quality of port infrastructure ranking 2017-2018Source:The Global Competitiveness Report 2017–2018 - World Economic Forum
III.CHALLENGESAccording to Massmann (2015), even though the number of seaports spread from Northern toSouthern region is more than 400, the majority of them is small scaled and still operating withobsolete systems while the number of cargos and vessels keep rising 16% each year (VietnamSeaports Association 2017). Consequently, some ports were overwhelmed by the excessivenumbers of vessel and could not avoid congestion situations. The lack of efficiency of portservices affected Vietnam’s logistics industry substantially with a cost of 2 billion USD (Das2018). Massmann (2015) believed that due to the utilization of multipurpose equipment, toolsand machinery instead of specialized ones (e.g. gantry cranes) that restrained port operation tofrom satisfying internal and external demands of the marine market.With the weak port infrastructures,enterprises have to use road carrying method instead(Vietnamnews 2018).According to Anh (2018), about 77% of cargos are carried using roadwaywhile only 5% are carried using the waterway.However,analystspointed outthatit is the roadtransport costs that undermine Vietnam’s transporting and logistics industry the most.It isreported that aregular cost for delivering a container from Hanoi to Ho Chi Minh City is nearly10 times higher than using waterwayand accounted for 10% of total transport expenses(Anh2018).Additionally, lengthy turnaround times in handling containers and delivering cargos inports hasalsoadded up to the expenses (Anh 2018).The situation becomes worst when the development momentum ofthevehicle population androad infrastructures is uneven.As the Voice of Vietnam (VOV 2015) stated, the growth ofindividual vehicles especially motorcycles, has escalated drastically. It is estimated that 1,000motorcycles and 100 cars are added to the city per day, yet the traffic infrastructure developmenthas proceeded very slowly and has failed to serve the risen population.
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