The amount of import and export goods is increasing daily, while road transport reveals many shortcomings, water transport is considered a "salvation" to maintain supply chains and reducing logistics costs for businesses.
The strength of water transport
According to the Vietnam Logistics Association (VLA), currently, about 99% of container volume (cargo containers and empty containers) is being transported via roadways between ports in Hai Phong, Lach Huyen and different ports, factories and warehouses in the northern provinces and cities, with the focus being Bac Ninh, Bac Giang, Hanoi, Thai Nguyen and Vinh Phuc.
Meanwhile, despite the harm of the Covid-19 pandemic, in 2020 the growth rate of Vietnam's import and export value remained high, increasing by 5.4% compared to 2019; and the first six months of 2021, according to the General Department of Customs, the import-export value grew by 32.2% over the same period last year. This has been creating increasing pressure on the northern region's road system with three main traffic axes, National Highway 5, National Highway 5B and National Highway 18 connecting key industrial areas with ports in Hai Phong and resulting in overcrowding, congestion and frequent traffic accidents, high logistics costs and serious environmental pollution.
Especially, due to recent Covid-19 pandemic outbreaks with the pandemic centre in Hai Duong (third outbreak) and Bac Ninh, Bac Giang (fourth outbreak), the strict control by localities of vehicles, people moving in and out of their localities have created a shortage of road transport capacity, causing congestion of import and export goods and disruption of the supply chain.
To lift the above shortcomings, the Ministry of Transport assigned to the Department of Inland Waterways of Vietnam to study solutions and mechanisms to promote water transport services connecting key economic regions in the region with seaports in Hai Phong. In fact, this agency have promoted work programmes, implemented practical surveys and worked with businesses in the field of port operation and container barge transport to find solutions and have decided to accelerate the opening of the Inland waterway from seaports in Hai Phong through the Cam river- Kinh Thay river and Duong river.
Make the best use of capacity and advantages
Due to the natural advantages of canals and the favour of geographical position as road traffic connections, since the end of 2018, Saigon Newport Corporation has worked with local businesses to invest in Tan Cang - Que Vo dry port in the area of Que Vo district, Bac Ninh with an initial scale of nearly 10ha of container yards and five berths that can handle barges up to 3,000 DWT (equivalent to 160 teu), with a throughput capacity of 700,000 teus per year.
Tan Cang - Que Vo Inland Port is equipped with a modern and synchronous system of equipment and technology for operation and exploitation and a place for customs procedures for import and export goods with full functions such as: empty container depot service, M&R service; transportation services, barge loading and unloading services, yard lifting services; customs services, screening and inspection; destination port service.
Tan Cang - Que Vo dry port is expected to be a promising gathering point for containers, customs clearance for import and export goods, for businesses in the provinces and cities in the region including Bac Ninh, Bac Giang and Thai Nguyen, provinces with the same management customs office.
The operation of Tan Cang - Que Vo Inland Port and other river ports such as Tri Phuong and Dabaco will be associated with the operation of transporting containers by barge via inland waterway of Cam river - Kinh Thay river - Duong river. This combination enables businesses in the region to access to sustainable, environmentally and socially friendly logistics solutions.
The use of services such as barges and customs clearance, freight forwarding at river ports near the factory also helps enterprises with shorter delivery time and lower risk to the goods.
With large transport capacity and reasonable preferential policies, barge transportation will offer customers the perfect option to reduce logistics costs. According to calculations of businesses in the industry, using barge services can save businesses at least 10% of logistics costs compared to the current road method. This is an impressive number in the context of the current situation when most of businesses are facing difficulties due to the pandemic and is even more impressive for those with large shipping volumes.
In addition, other policies such as lower fees for container handling than Hai Phong area and completely free of storage fees are applied by businesses to attract customers.
However, to exploit the full capacity of Tan Cang - Que Vo dry port and ports on the inland waterways of Cam river - Kinh Thay river - Duong river in supporting and reducing the load on road transport routes, other agencies under the control of the Vietnam Inland Waterway Administration must join hands. At the same time, it is necessary to promote communication work at the central level; remove bottlenecks in terms of both infrastructure and mechanisms and policies; offer tax exemptions for localities in using the seaport infrastructure in Hai Phong to create a big enough difference in cost between current traditional land transport and barge transport (because of the fact that barge lan does not use infrastructure invested by the locality).
According to the plan, Saigon Newport Corporation will announce and put Tan Cang - Que Vo dry port into official operation with full functions on the occasion of National Day September 2, 2021. The construction of basic infrastructure has been completed, the unit is carrying out the procedures to request the announcement of the inland port (the Vietnam Maritime Administration and the Ministry of Transport) and the establishment of an inland inspection site for import and export goods (General Department of Customs and Ministry of Industry and Trade). Putting Tan Cang - Que Vo dry port into operation will be a breakthrough in efforts to find solutions to minimise the current overloaded road transport in the Northern region that the Government and the Ministry of Transport are currently facing. Now, the Department of Inland Waterways has been assigned to lead the implementation.
Source: VCN
Keywords: inland waterway, supply chain, water transport, logistics costs, storage fees
