HCMC – T&T Group and Singapore-based YCH Group, the world’s leading logistics group, on December 23 started work on the Vinh Phuc ICD Logistics Center, the first superport project of the ASEAN Smart Logistics Network (ASLN), which costs nearly VND3.9 trillion.
The center, included in a plan to develop Vietnam’s inland port and logistics center system to 2020 with a vision to 2030, will feature the functions of a distribution center and an inland container depot (ICD) to meet the logistics demands of the market.
The Vinh Phuc ICD Logistics Center will cover over 83 hectares of land and have a designed capacity of 530,000 TEUs per year.
The first phase of the project was expected to be put into operation in the third quarter of next year, and the second phase in the last quarter of 2024.
The center is aimed at five objectives: developing sustainable infrastructure, ensuring smooth logistics services, reducing costs for enterprises, improving the competitiveness of supply chains, and training human resources.
Do Quang Hien, chairman of T&T Group, said the center was expected to pave the way for breakthroughs in the local logistics sector, heading toward the targets of cutting logistics costs to 16% of the country’s gross domestic product by 2025, raising the contribution of logistics services to the GDP to 5%-6% and helping the logistics sector grow 15%-20%.
In addition, it will help ease the pressure on ports, facilitate industrial parks and factories in goods handling and customs clearance, thus boosting trade activities between Vietnam and the ASEAN, China and other markets.
It will be one of the largest logistics centers in the north connecting industrial parks and linking with Hanoi, the international airport in Haiphong and China’s Yunnan, Hien added.
Speaking at the groundbreaking ceremony, Vinh Phuc Chairman Le Duy Thanh said the Vinh Phuc ICD Logistics Center would be a transit point for domestic goods, imports and exports. The center development is important to the socioeconomic development of Vinh Phuc and the country as a whole.
Thanh added that Vinh Phuc would accompany the T&T Group and the YCH Group to ensure the project’s progress.
Such a large logistics project as the Vinh Phuc ICD Logistics Center could not be executed without cooperation with the T&T Group. The center would become a symbolic project ensuring the sustainable development of Vinh Phuc, the northern region and Vietnam in the upcoming years, said Robert Yap, executive chairman of YCH Group.
Over the past few years, Vietnam’s logistics sector has made great advances. However, logistics costs in the country have been higher than those in other countries.
According to statistics in 2020 from the World Bank, logistics costs in Vietnam were some 20.9%-25% of the GDP, while the rate was 19% in Thailand, 13% in Malaysia, 8% in Singapore and 7.7% in the United States. The higher logistics costs have sent the prices of products rising, reducing the country’s competitiveness compared with other Asian countries, such as China, Thailand, the Philippines and Indonesia.