A driving force to boost development of logistics services in Danang

Danang ITL Logistics Distribution Centre has the total investment capital of more than VND200 billion ($8.75 million)

Overcoming supply chain disruptions during the pandemic, the logistics sector is expected to make a breakthrough in the coming time with ample opportunities from free trade agreements and the e-commerce boom during the reopening phase.

International organisations forecast that Vietnam will post positive GDP growth this year, and the country’s trade balance with the world continues to register a surplus, meaning that manufacturing, business, and trade are on the recovery path. Thus, logistics firms will have opportunities to accelerate operations after a lull period.

Investments in modern logistics and warehouse infrastructure could unlock the full potential of the logistics sector in Danang in particular. Danang, known as the main logistics hub in the central region and Central Highlands, acts as an important gateway to Southeast Asia through the East-West economic corridor.

Infrastructure is being heavily funded over this decade, along with a long-term vision towards 2045, to help transform the beach city into one of the largest logistics hubs in the region and beyond. With that, the city is expected to become a marine economic centre, forming logistics service supply chains.

To facilitate the goal, Danang is constantly making investments to expand road transport infrastructure and raise the capacity of Danang International Airport and Tien Sa Seaport, thereby unlocking the development potential for logistics businesses.

Despite great advantages, the area’s logistics sector also faces some challenges due to a lack of skilled human resources. The market remains small in terms of population, industrial zones, and road systems. Thus, it has yet to form a national logistics hub to claim the leading position in the logistics industry.

ITL Corporation, Vietnam’s leading logistics company, has a mission to build an open ecosystem for the industry with a lofty goal of becoming a “national champion” in its sustainable development journey. Therefore, ITL has made comprehensive preparation by investing in infrastructure and technology. In Danang, ITL is currently providing warehousing, land lease, and transport services with more than 200 trucks serving the inner-city network as well as outside major cities.

ITL plans to put into operation the Danang ITL Logistics Distribution Centre by the end of 2022, covering an area of over 31,000 square metres with the total investment capital of VND200 billion ($8.75 million).

Around 18,600sq.m is earmarked for goods storage and office space, while there is also a cold storage area spanning 5,200sq.m with a capacity of more than 10,000 pallets in the first phase. The rest is for the green campus and parking lot, and all of the facilities developed by ITL are in line with Grade-A quality standard.

The logistics distribution centre is equipped with inbound and outbound gates with dock leveler, a warehouse management system with electronic data interchange ability, sprinkler, and CCTV. In particular, it will be one of the leading modern and sustainable green distribution centres in the country that uses solar energy.

The warehouse and cold chain system at the Danang ITL Logistics Distribution Centre will boast modern technology to increase its processing capacity and its transport speed in the central region. It also has a plan to increase cold storage capacity to over 50,000 pallets in the 2022-2023 period, helping it become a market leader in the cold supply chain.

“In the first few years, we will not focus on profits as we consider this logistics distribution centre as a long-term investment plan with a view to better serving customers,” said Alexander Olsen, vice president of the Commercial Division at ITL Corporation. “In addition, the Danang distribution centre will become an important link in the open logistics ecosystem that ITL is building. We hope that local logistics businesses can benefit from this ecosystem by forming a strong connection and providing sustainable services to customers.”