HCM City (VNS/VNA) – Ho Chi Minh City is working on a logisticsdevelopment strategy that would make the city a major logistics hub and reducelogistic costs to 16 percent of Vietnam's GDP in 2025.

During a conference held early this week in HCM City, Nguyen Ngoc Hoa, Deputy Directorof the municipal Department of Industry and Trade, said the municipal People’sCommittee had told the department and Vietnam Logistics Research andDevelopment Institute (VLI) to work on a logistics development project to 2030.

The project will focus on building three logistic centres through technicalinfrastructure, and will aim to increase the number of businesses hiringspecialised logistic services, with the goal of reducing costs.

In addition, the project will consider locations and scales of logisticcentres, as well as improve logistic service quality.

To continue as the economic leader of the country, HCM City should have awell-developed logistics industry connected to other provinces, especiallybecause many of the city's major exporting industries are moving away from thecity to other provinces, experts said.

To Thi Hang of the VLI said that southern Vietnam has 12 inland containerdepots, with newer and bigger ones offering more comprehensive logistic servicepackages. Such depots are also linked to domestic waterways and located nearseaports.

HCM City has six depots, but five of them, which have been operating over theintended capacity, are planning to relocate.

In addition, many of Vietnam's logistic businesses rely on contracts from foreigncompanies, as well as from big businesses.

A survey done by the institute showed that most of the city's port clusterswere facing difficulties such as congestion, unhealthy competition, poorconnection between small ports, and the inability to expand due to locations inurban areas.

About 41 percent of the surveyed businesses said that Thu Duc District andDistrict 9 are the best places for a logistic centre, due to convenient trafficand future airport and port development.

During the conference, several businesses said that a comprehensive logisticdevelopment project was crucial for ensuring sustainable growth and avoiding asituation where developments occur independently of each other.

Inland container depots along with good storage spaces and clearance systemsare important for a logistics centre, they said, adding that current depots inthe city lack traffic connections within the city and to other provinces.

HCM City is the biggest consumer market in the country, and the largestdistribution and supply centre in the South. Most of the imports and exportsfrom southern provinces and trade between provinces go through HCM City.

The city, which is also located near major East Sea shipping routes, can usemultiple methods of goods delivery due to favourable landscape, according tothe department.

HCM City plans to have eight depots by the end of 2030, with a total size ofaround 102 to 137 hectares.

The logistics project will be submitted to the city government for approval inDecember./.