Free trade zones linked to seaports: Increasing the attractiveness of Southeast logistics

This is the content presented at the Forum "Linking logistics development - Driving force for economic growth in the Southeast region" jointly organized by Business Forum Magazine, Logistics Services Association (VLA) and Department of Industry and Trade of Ba Ria - Vung Tau province on the afternoon of September 8.

Mr. Pham Tan Cong - Chairman of Vietnam Federation of Commerce and Industry (VCCI) speaking at the forum

Lots of growth potential

At the Forum, Chairman of the Vietnam Federation of Commerce and Industry (VCCI) Pham Tan Cong said: The Southeast is considered a potential and attractive market for the development of the logistics industry. Currently, the region's trade activities are vibrant, contributing about 45% of the total volume of goods and more than 60% of the volume of containerized goods through the Vietnamese seaport system.

The logistics industry in the Southeast region still has a lot of potential and opportunities for further development in the coming years through a series of policies and guidelines of the Party and the State recently issued such as Resolution No. 24-NQ/TW dated October 7, 2022 of the Politburo on "Socio-economic development and ensuring national defense and security in the Southeast region to 2030, with a vision to 2045"; Resolution No. 81/2023/QH15 on the national master plan for the 2021-2030 period with a vision to 2050.

Currently, the Southeast region has about 14,800 logistics service providers, accounting for nearly 50% of the total number of logistics enterprises nationwide. Of which, they are mainly concentrated in Ho Chi Minh City with more than 11,000 enterprises, Binh Duong with nearly 1,700 enterprises and Dong Nai with more than 1,200 enterprises. The region handles 45% of the total volume of goods and more than 60% of the volume of container cargo of the whole country through the port system of Cat Lai (Ho Chi Minh City), Cai Mep-Thi Vai (Ba Ria-Vung Tau).

Mr. Tran Thanh Hai - Deputy Director of the Import-Export Department said that the formation of a free trade zone associated with the seaport will help Ba Ria - Vung Tau attract investment enterprises and create a source of goods for the port.

Mr. Tran Thanh Hai - Deputy Director of the Import-Export Department (Ministry of Industry and Trade) - said that besides the advantages in industrial production and export, the Southeast region also has advantages in logistics when having 2/3 of the largest port clusters in the country in Ho Chi Minh City and Ba Ria - Vung Tau. In addition, this region is also home to universities and colleges specializing in logistics and supply chain training in the country.

Despite the potential and advantages, Mr. Dang Vu Thanh - Vice President of the Logistics Service Enterprise Association said that logistics in the Southeast region still has many bottlenecks. In terms of connectivity, in Ba Ria - Vung Tau in particular, seaport, LCD, warehouse, logistics activities... are relatively independent and lack connectivity with each other. Therefore, regional connectivity is even more limited (specifically, connectivity with other regions such as Ho Chi Minh City, Binh Duong, Dong Nai...).

In addition, Resolution 24-NQ/TW of the Politburo also pointed out a limitation of the Southeast region: "The regional and inter-regional infrastructure network, especially the intra-regional and inter-regional transport infrastructure, is still lacking, weak, and unsynchronized, affecting the development and spread of the region".

In fact, currently, businesses in the logistics industry have invested in infrastructure and technology. However, businesses cannot connect infrastructure between provinces and cities in the region, between production and processing zones, industrial zones with ports, airports, and between regions and markets. Businesses can invest in their own facilities such as warehouses, yards, ports, etc., but they cannot connect. "The connectivity of infrastructure for this area needs to be promoted more strongly, and at the same time, there must be synchronous policies to create an ecological environment for logistics linkage activities," Mr. Thanh commented.

Speakers share solutions to improve logistics infrastructure for the Southeast region

Formation of Free Trade Zone

According to Mr. Tran Thanh Hai - Deputy Director of the Import-Export Department, not outside the general trend of other industries, logistics enterprises now need to aim for greening and digitalization. Enterprises investing in logistics construction need to pay attention to multi-layer cost savings, improving efficiency, maximizing automation to build smart warehouses without human intervention such as driverless cars, automatic ports, etc. "This is an inevitable trend. If we cannot apply it, we will fall behind," Mr. Hai emphasized.

In addition, to attract investment enterprises and create a source of goods for the port, it is necessary to form a Free Trade Zone associated with the seaport. According to Mr. Hai, in the most common understanding, a Free Trade Zone is characterized by a geographical area located in a country or territory, but does not apply import and export taxes and trade management measures. If implemented effectively soon, this solution will help Ba Ria-Vung Tau effectively take advantage of potentials and opportunities in the new context.

“In the context of Ba Ria-Vung Tau being one of the leading centers for FDI attraction and logistics in the country, the formation and development of the Free Trade Zone will help increase the attractiveness of the province, and the entire Southeast region, to foreign investors,” said Mr. Tran Thanh Hai.

Sharing the same view, Mr. Pham Tan Cong - Chairman of VCCI said that Resolution 24-NQ/TW of the Politburo also proposed the policy of "Forming a Free Trade Zone associated with seaports in Cai Mep Ha area", this is a new policy, aiming to create a special space, creating a driving force to promote the development of the Southeast region, playing the role of a "locomotive" leading to the development of the whole region and the whole country.

“To achieve the goal of having an international transit port, it is necessary to have Free Trade Zones to support and attract goods to the port, in which intra-regional and inter-regional connections play a particularly important role,” said VCCI Chairman Pham Tan Cong.

Mr. Cong also said that the formation and development of the Free Trade Zone will help Ba Ria-Vung Tau province in particular and the Southeast region in general to create a breakthrough in economic development because of the benefits of forming a complete trade and logistics ecosystem to enhance the competitiveness of the locality and the region. Thereby attracting domestic and foreign investors, promoting the development of production, trade and direct services within the Free Trade Zone, creating opportunities to invite the world's leading enterprises to participate in activities and investment.

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