Logistics infrastructure in Vietnam

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Mar 2012,

ANT Consulting
In January 2007 Vietnam officially joined the WTO, an event seen as an important milestone in the country’s closer integration into the global economy. WTO membership has helped boost Vietnam’s international trade and develop its freight transport capabilities.
Road transport is the most advanced in terms of freight sector privatisation and is the dominant mode for freight, with a market share of around 60% of domestic cargo. There are over 1,050 enterprises registered in the road transport business, which include 16 state-owned enterprises (SOEs), 233 limited liability companies, 350 private companies and 450 joint stock companies. Very few foreign-invested companies are present due to the legal restrictions.
Most road transport companies are of small or medium size, and each company, on average, owns about 50 vehicles. In addition, tens of thousands of individual household businesses exist that operate informally in the road freight sector, and are thus difficult to account for and monitor.
Vietnam has a national road network of 222,179km. Of this, only 42,167km, or 19%, is paved. Although the road condition is considered poor, at this stage of development Vietnam has achieved a remarkable road growth rates
Vietnam’s railway transport sector has only one operator, the Vietnam Railway Corporation (VRC), established in April 2003 as a state corporation operating railway transport and related services. The Government has announced plans to separate the management of rail infrastructure from passenger and cargo services. Vietnam’s rail network totals 2,600km (excluding sidings). The network is mixed-gauge, comprising 2,169km of 1.000m gauge and 178km of 1.435m gauge. The network has 1,790 bridges totaling 45km and 11.5km of tunnels. The principal axis is Hanoi-Ho Chi Minh City (1,726km). Other lines emanating from Hanoi are to Hai Phong (102km), Lao Cai (296km) and Dong Dang (162km). Railway infrastructure in Vietnam was ranked 58 out of 114 by the WEF.
There are two principal airlines operating in Vietnam: Vietnam Airlines and Pacific Airlines. Both are majority state owned, although Australia’s Qantas is now a minority shareholder in Pacific Airlines. The Government has announced plans to build the country’s largest airport at Long Thanh in the southern province of Dong Nai, at an estimated cost of US$8bn. The authorities also plan to expand Noi Bai International airport in Hanoi. The three major airports handling freight are located at Ho Chi Minh City, Hanoi and Da Nang, each of which have international connecting flights. Minor airports such as Cat Bi at Haiphong are generally used for domestic flights to the three larger hubs. In 2010, Vietnam’s air transport infrastructure was ranked 84/ 133 nations by the WEF.
Vietnam’s dense river and canal network provides the country with a highly developed inland waterway system. This is the second-largest sub-sector involved in domestic cargo transport, accounting for 25-30% of total transport volumes. The inland waterway transport sub-sector is managed by two state corporations affiliated to the Ministry of Transport, one SOE affiliated to the Vietnam Inland Waterway Authority, and some enterprises managed by other ministries, operating in support of the power generation, cement and paper industries. In addition, there are about 230 co-operatives and hundreds of inland waterway transport enterprises in the country.

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