A crane loads cargo at Tien Sa Port’s container yard in Da Nang. The city plans to develop a logistics complex with total investment of 620 million USD. (Source:VNA) Da Nang (VNS/VNA) - The central city of Da Nangplans to build a logistics complex to position itself as aninternational-standard logistics centre for Vietnam, ASEAN and the Asia Pacificregion by 2030.
The complex will be located in the northwest part of the cityon 312ha with total investment of 14 trillion VND (620 million USD).
The decision was announced at the city’s people’s councilmeeting in July. Da Nang’s complex will include a series of logistics centreslinked by a system of roads and rail lines. The major nodes in the complex willbe the newly designed Lien Chieu deep-sea port, Hoa Nhon; the newly built KimLien railway station; an airport and hi-tech park with international-standardwarehouses; an inland clearance depot railway and entry point to roadconnections.
Vice Chairman of the city’s People’s Committee Dang Viet Dungsaid the city intended to build the Lien Chieu port as a key entry point intologistics chains providing services for the central and central Highlandsregions, as well as the import-export exchange among ASEAN partners via theEast-West Economic Corridor (EWEC) that links Vietnam, Laos, Thailand andMyanmar.
“We aim to build up Da Nang as a regional logistics centre tomeet import and export needs among domestic and foreign direct investmententerprises. Partners in ASEAN could boost trading with Vietnamese businessesalong the EWEC transport system and via Da Nang ports,” Dung said.
“The logistics complex will provide 50 percent of logisticsservices via the airport and sea ports and 40 percent via the railway system by2050,” he said.
He added that a single railway line will be built to connectthe Kim Lien cargo railway station with the airport cargo logistics and high-techpark. A road system will link the National Highway No 1 with Lien Chieu port.
General Director of Da Nang port joint-stock company Nguyen HuuSia said the city has potential to develop into a key logistics centre of Vietnamand ASEAN.
“The city is situated in central Vietnam and at aconvenient cross-road of the railway and road system as well as the airport. Itsits at the end of the EWEC and near the complexes of industrial parks andeconomic zones in Thua Thien-Hue, Quang Nam, Quang Ngai and Quang Triprovinces,” Sia said.
‘The city also has a deep-sea port system and well-investedinfrastructure in connection with the newly-built Da Nang-Quang NgaiExpressway, the north-south national highway and railway system,” he added.
He said the sea port system, which was designed for handling12 million tonnes of cargo each year, currently hosts 23 cargo ships from 15shipping agencies from Europe, the US, Hong Kong and Singapore per week.
Tien Sa port alone could allow access to 70,000DWT(deadweight tonnage) ships, 4,000TEU (twenty-foot equivalent units) containerships and 150GT (gross tonnage) cruise ships, he added.
Sia said the city’s port system, including Tien Sa, Lien Chieuand Son Tra, would handle 29 million tonnes of cargo by 2030, while the port’swarehouse could accommodate 500 TEU.
As planned, the city will upgrade Lien Chieu port as anintegrated port to ease the overloading at Tien Sa – which will handle mainlycruise ships and fewer cargo ships. Lien Chieu is scheduled to begin operationas a cargo port in 2022.
Sia, however, said that one major challenge was the poorquality of some 1,450km of roads on the EWEC transport corridor. This meantcargo transported via the road system to the Da Nang port was limited.According to a report, only 3 percent of cargo from the EWEC is cleared via theDa Nang port, while tourism linkagesbetween Thailand, Myanmar, Laos and Vietnam are not yetstrong.
According to the Economic Research Institute for ASEAN andEast Asia (ERIA), smoother traffic and procedures on the 1,450km road of EWECwill help Da Nang boost its Regional Gross Domestic Products by 2.29 percentmore than current projections for 2025.
Director of the Joint-Stock Transimex-Sai Gon Corporation’s DaNang branch, Nguyen Tan Man said Da Nang and the central region lackedcompleted logistics centres as well as international standard storage.
“We have not yet seen logistics providers that could supplycomprehensive services from manufacturing and cargo management to forwarding tofinal consumers in Da Nang and the central region,” Man said.
“The local logistics companies could only handle part oflogistics chains such as transport, customs clearance or warehouse serviceonly. That’s the reason big investors still hesitate to pour funds into theregion, or they (investors) have to use logistics service from foreigncompanies,” he said, adding that local logistics companies operated assub-contractors of logistics service from foreign logistics companies.
Man also pointed out that the number of internationalstandard warehouses in Da Nang and central Vietnam is small. There areonly four or five warehouses with total capacity of 60,000 tonnes (meeting justfive per cent of demand).
Meanwhile, unloading services at ports in the region are seenas still poor with 10 to 15 minutes needed for unloading a container, comparedto only five minutes in HCM City.
He also said logistics companies had few choices for ports inthe central region as Da Nang was seen as the only key port where containerships can dock.
Man said his company had invested 80 billion VND (3.5 millionUSD) in building the first international standard cold/chilled storage space atHoa Cam Industrial Zone (IZ), serving local and FDI investors in the regionwith a high quality warehouse for worldwide exports.
The tailor-made SOP (Standard Operating Procedure) storagealso provides various logistics services of air and sea freight, bulk cargo andtrucks in connection with the trading route in the East-West Economic Corridorand a system of deep sea ports at Tien Sa and Lien Chieu, as well as airports.
According to Chairman of the Vietnam Logistics Association(VLA) Le Huy Hiep, the central region has 20 deep sea ports, but the systemonly handles 55.5 million tonnes of cargo – 13 percent of the country’s seaports per year.
There are only 40 foreign shipping companies in Vietnam,accounting for only 5 percent of the country’s total number of shipping firms,but they transport up to nearly 90 per cent of Vietnamese import and exports,mostly to Europe, the US, the Middle East and Africa.
Production capacity in industrial zones (IZs) across theregion has not yet developed to supply enough cargo for logistics businesses.
According to Yoshitaka Kurihara, senior advisor to the JapanExternal Trade Organisation (JETRO) HCM City Office, chaotic road traffic, slowrail traffic, a shortage of warehouse space and poor condition of seaportspreclude investment.
As scheduled, Da Nang has been working with Japaneseconsultants to develop the first stage of the Lien Chieu Port atan estimated cost of 247 million USD.
It is expected that the Lien Chieu Port, whichcurrently handles 50,000 DWT (deadweight tonnage) container ships, will be ableto handle 100,000 DWT ships with a loading capacity of 8,000 twenty-footequivalent unit (TEUs) starting from 2025.-VNS/VNA
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