New logistics complex marches towards sustainability

The ITL-ICD Tan Cang Song Than Integrated Logistics Complex will provide end-to-end logistics services

According to the Vietnam Logistics Business Association, the domestic logistics industry has annually grown by 14-16 per cent, with a scale of $40-42 billion per year, which is equivalent to 17-18 per cent of the country’s GDP. Meanwhile in 2018, as reported by the World Bank, Vietnam was ranked 39th out of 160 spectated countries on the logistics performance index, up by 25 positions compared to two years earlier. Thus, Vietnam has emerged as a lucrative destination leveraging its strengths in experience, operational management, and technical infrastructure. The strong presence of over 3,000 local logistics firms have fuelled the sector’s buoyant performance. The potential of this industry has been driven not only by state-owned logistics but also by private enterprises boasting big experience, knowledge, and high technologies.

Leading in the state-owned business sector is Saigon Newport Corporation (SNP), Vietnam’s largest modern and professional container port operator with a diverse port operation and multimodal transport. SNP is currently the primary container terminal operator in Vietnam, responsible for more than 90 per cent of the southern region’s export-import container market share, and nearly 50 per cent of the whole country’s market share.

Besides, private logistics firms are playing an increasingly important role in Vietnam’s international economic integration. A typical example is Indo Trans Logistics Corporation (ITL Corp.) established when Vietnam initiated its open-door policy. They have expanded their business network nationwide and in six Southeast Asian countries, with major business ventures and a connection to global logistics giants such as Keppel Telecommunications and Transportation (ITL Keppel), Ceva Logistics, Mitsubishi Logistics, and UPS Supply Chain.

Last year, ITL Corp. grew by a record rate of 50 per cent on-year, three times higher than the national logistics sector’s average growth.

The year 2019 is a milestone in the development for both ICD Tan Cang Song Than, which is a member of SNP, and ITL Corp. as the two enterprises decided on signing a business co-operation contract.

With the establishment of the integrated logistics complex in Binh Duong province, which is supposed to be the biggest scale operation in Southeast Asia, this event marks significant co-operation between a leading state-owned enterprise (SOE) and a Vietnamese private enterprise, as it will help strengthen the capacity of both sides, therefore providing added value for both domestic and regional supply chains.

With more than 60,000 square metres of storage area positioned in a strategic location in the southern logistics centre, the ITL-ICD Tan Cang Song Than Integrated Logistics Complex provides end-to-end logistics services including warehouse rental and management, railway transportation from Song Than Station, road transportation, courier services, customs brokerage services, and international freight forwarding services. This can help save time and cost as well as reduce enterprise workload.

Amanda Rasmussen, chief operating officer of ITL Corp said, “ITL’s strengths are commercial and partnership integration, processes, operation models, and technology platforms executed at international and global standards of excellence. Meanwhile, SNP is very strategically positioned in infrastructure development and ports systems. Together, SNP and ITL create a special competitive advantage that helps both businesses together bring a unique, optimised and tightly connected offering to the market.”

The establishment of the ITL-ICD Tan Cang Song Than Integrated Logistics Complex is a remarkable highlight in the industry, contributing to boosting international trade and economic growth. Efforts in co-operation between ITL and an SOE has proved ITL’s strong determination to become a leading logistics firm in Vietnam, contributing to the development of the domestic logistics sector in particular and of the Vietnamese economy in general.