Transport infrastructure is a key element of ensuring a successful economy as trade is dependent on good freight transport links. Freight companies and shipping companies will consider all options before opting for the trade route that will offer the most cost efficient mode for a client. Vietnam faces many challenges as it upgrades its transport infrastructure to underpin its developing economy and its future growth plans.

Vietnam is currently in transition towards becoming a market economy.Although the country is undergoing economic growth, inadequate infrastructure, especially in rural areas, is a serious barrier to further growth and employment in Vietnam. The freight services sector works well within the current constraints but will certainly benefit from future improvements in the freight transport infrastructure.

The World Bank and the Asian Development Bank are currently involved in projects to improve the quality and accessibility of a basic transport infrastructure. This includes a feasibility study for the Cao Lanh bridge project as part of a greater project to improve the transport infrastructure in the Mekong Delta region.

This bodes well for the international freight transport sector and freight services companies operating in Vietnam as their business is likely to improve at the same time as the Vietnam economy.

Vietnam is a Socialist Republic bordered by China in the North, Laos and Cambodia in the West. It has a population of 80 million located in two large delta areas developed in the plains along the Mekong river in the south, the Red river in the north and along the coast. Roughly three quarters of the population live in rural areas. The urban centres include Hanoi and Hiphong in the north, Ho Chi Minh, Mytho and Can Tho in the south and Hue, Da Nang, Nya Trang, Qui Nhon, Camran and Vung Tau along the coast.

Vietnam is now the world’s second largest exporter of rice, but economic growth has all taken place since the Vietnam War, which wreaked terrible damage on the transport infrastructure in Vietnam. Road, railway, inland waterway, shipping and air transport all play important roles in the freight transport infrastructure in Vietnam.

The public investment priority has been to upgrade the main long distance and international links, especially roads and ports, where growth in demand for freight transport has been particularly high. Transport infrastructure is mainly financed, built and operated by the public sector. Vietnam Airlines is government owned and all rail services in Vietnam are provided by Vietnam Railways, a public enterprise. There is also state control of some trucking and barge enterprises, although the role of the private sector is becoming more dominant in these areas. This is likely to increase flexibility and competition, resulting in a better service for customers of freight forwarding companies.

The development of the freight transport infrastructure in Vietnam and reforms in the regulation of the sector has resulted in the growth of the private sector and commercialization of the state sector. New services have been introduced such as container freight forwarding on road, rail and waterways and liberalised transit.

There are over 200,000 km of road network in Vietnam, of which only 16,000 are designated as national roads. Many are unpaved and most are two lane and suffer from severe constraints such as narrow widths and restrictive vehicle weight limits. This creates ongoing challenges for the freight company or shipping company.

Vietnam has rivers with a total length of 42,000 km, of which 8000 are used for inland water transport, mostly managed by the Vietnam Inland Waterways Administration. Due to favourable geographical conditions, inland waterway transport plays an important role in freight forwarding in Vietnam. In the north, the Red and Thai Binh rivers are two large natural river systems, while in the south the Mekong and Dong Nai rivers create an outstanding waterway transport network. Shipping companies take full advantage of this excellent natural resource.

Vietnam’s ports are mainly owned and operated by the state. These include Haiphong, Saigon, Danang and Can Tho. The main gateway ports suffer from shallow water depth, inadequate infrastructure and cargo handling equipment. However, in spite of these constraints, freight forwarding traffic has been constantly increasing over the last twenty years.

Port productivity is hampered by the port conditions, but progress is being made. Port fees have been reduced and customs services have improved, whilst paperwork has been reduced and more use is being made of IT.

Through a series of steps such as these, the freight services infrastructure in Vietnam is being improved and this will help secure Vietnam’s economic future as well as make international freight a more streamlined process for the customer.

Author Bio: Stephen Willis is Managing Director of RW Freight Services a UK based freight transport company, established in 1971 and operating worldwide freight forwarding services including specialist freight services to and from Vietnam

Category: Business
Keywords: Freight services,shipping companies,international freight, freight transport, freight forwarding, freight company, shipping company