1. The Role of Logistics Infrastructure
Overview of Logistics Infrastructure:
Logistics infrastructure encompasses all physical and technical facilities critical to the logistics service industry. It includes information and communication infrastructure as well as transportation infrastructure:
- Information and communication infrastructure involves the systems used to manage various logistics activities such as data entry, transportation, storage, and warehousing. This entails the use of computers, electronic equipment, and machinery for information and communication-related tasks.
- Transportation infrastructure constitutes a system consisting of physical and technical elements, architectural structures, and vehicles vital to the transportation industry. It encompasses road systems, bridges, stations, airports, seaports, and accompanying equipment such as signs, signal lights, and machinery employed in transportation activities.
The Role of Logistics Infrastructure:
Logistics infrastructure serves to support production activities and fulfills the essential requirements of goods and service supply chains across all businesses, making a significant contribution to economic development. It plays a pivotal role in the transportation of raw materials, goods, and the efficient handling and storage of products. Furthermore, it ensures seamless communication between production lines, establishing a continuous operational link throughout the production process and distribution of goods. The fundamental activities of transporting goods, warehousing, and information dissemination are intrinsic to logistics, directly influencing businesses' supply chains and enhancing their operational efficiency. This, in turn, contributes to both economic and social development.
Logistics infrastructure plays an instrumental role in the movement of goods and has a profound impact on businesses' supply chains. Transportation within the logistics infrastructure acts as the linchpin, facilitating the transfer of goods from one stage of the supply chain to another. This includes the journey from sourcing raw materials to production, processing, and final distribution through various channels such as agents, retailers, and ultimately to end consumers.
This intricate process involves a variety of transportation modes, including road, air, and rail. Efficient and technologically advanced means of transportation are paramount in expediting the movement and handling of goods, saving time and ensuring both convenience and effectiveness. Logistics also holds a pivotal role in the circulation and storage of goods. The more modern and extensive logistics systems are, the more effectively they can cater to the needs of consumers, guaranteeing quantity, quality, and timeliness.
2. The Relationship between Logistics Infrastructure Development and Economic Development
Investing in logistics infrastructure has far-reaching implications as it enhances the capacity of logistics systems, improves efficiency, elevates the quality of logistics services, and ultimately increases added value. The development of logistics infrastructure goes hand in hand with cost reduction, shorter shipping times, and creates opportunities for expanding production and business operations on a larger scale. This increased competitiveness not only benefits individual businesses but also bolsters the economic growth of nations.
Logistics infrastructure plays a crucial role in bridging supply and demand, thereby stimulating the demand for goods and fostering trade. By enhancing the efficiency of the entire supply chain, from raw material acquisition to production, and ultimately to product distribution to consumers, it facilitates the swift and punctual delivery of products, offering convenience in terms of timing and location of goods delivery. This, in turn, helps businesses expand their market share, leading to increased revenue and profits, and contributing to both the specific growth of individual businesses and the overall economic development of the country.
Furthermore, well-developed logistics infrastructure ensures the timely supply of raw materials and the efficient distribution of products, bringing substantial benefits to businesses. It allows companies to access remote markets for raw materials and commodities quickly, promoting their activities and encouraging production across various regions.
3. Logistics Infrastructure Development Policy
The development of logistics infrastructure stands as a pivotal factor in a country's economic growth. Therefore, policies governing logistics infrastructure play a central role in advancing logistics activities and creating a favorable environment for business operations in Vietnam. The following key policy recommendations are paramount:
Accelerate Key Projects: Fast-track the progress of the North-South expressway project and initiate the construction of the Long Thanh International Airport. Focus on executing vital, time-sensitive initiatives that enhance connectivity across regions and territories. Furthermore, the maintenance and upkeep of road and rail transportation systems are indispensable for efficient logistics operations.
Leverage Urban Centers: Harness the potential of major urban areas by addressing logistical bottlenecks. Attract resources for modern urban development that aligns with the unique strengths and conditions of each city and region.
Digital Infrastructure: Develop a robust and synchronized information technology infrastructure, fostering a modern digital ecosystem. This includes establishing shared platforms, pioneering innovative business models, and deploying technology platforms to drive breakthroughs in the digital transformation process.
Regulatory Framework: Implement Government Decree No. 67/2020/ND-CP, dated June 16, 2020, which amends and supplements specific provisions of Government Decree No. 68/2016/ND-CP, dated July 1, 2016. These amendments and supplements pertain to regulations governing duty-free goods businesses, warehouses, customs procedures, collection points, inspection, customs oversight, and the expansion of logistics infrastructure through provisions related to foreign customs warehouses and the conditions for assembling, inspecting, and overseeing imported and exported goods in border areas.
Sustainable Goals: Implement Government Resolution No. 136/NQ-CP, dated September 25, 2020, which aims to promote the achievement of sustainable development goals at various levels, across different sectors, regions, and localities until 2030. This resolution includes several provisions relevant to transportation and logistics. It underscores the need to continue effectively restructuring the transport market, streamline operations, innovate, and enhance transport system efficiency. It encourages the transition of goods from road to alternative modes of transportation to alleviate the strain on road transport, thus promoting greater fuel economy and reduced emissions, especially in waterway and railway modes. Additionally, the resolution emphasizes the development of public passenger transport via buses in urban areas in Hanoi and Ho Chi Minh City. It advocates for the formulation, promulgation, and application of fuel consumption standards tailored to specific vehicle types and local conditions. Moreover, it underscores the use of biofuels and clean fuels, while promoting a logistics services development project designed to optimize transport efficiency, reduce fuel consumption, apply smart traffic technology and green transport solutions, and implement measures to mitigate greenhouse gas emissions in transportation and freight logistics.
Dr. Tran Thi Thu Hien
Department of Information and Trade Promotion - VIOIT
- Vietnam Logistics Report 2022.
- An Thi Thanh Nhan, "Logistics Infrastructure in Vietnam's Economic Development," Vietnam Logistics Review, 2023.
- Anh Tu, "Improving the Quality of Transport Infrastructure to Enhance Logistics Capacity," VN Economic, 2023.