Current situation of VietNam road transportation - Opportunities or challenges?

Transporting cargos by road in Vietnam is the most common form of transportation. It has made great contributions to the circulation of cargos and services that facilitated the development of trade. What is the current situation of Vietnam's road transport industry?

Overview of the road transport industry in Vietnam, cargo freight services are one of the important links in logistics services and have become one of the industries that play an important role in socio-economic development.

As society becomes more modern, the volume of cargos that need to be transported increases significantly. Especially for industrial production items that need to be developed on an economic scale. Due to the types of vehicles also developing in large-tonnage, heavy trucks, tractor-trailers, and specialized containers, ... were to meet the needs of people.

The traffic situation on the national highway in recent years has not improved much. Because the increase in vehicles and cargos and the investment upgrade is quite limited, leading to remodeling makes up the majority of the state budget. The transportation system is inefficiently distributed, it will be seriously congested if there is a traffic accident.

This makes road transportation more difficult and time-consuming. 

If the stagnation situation continues for a long time, the production and circulation of goods in the future will face numerous challenges. The economy will be significantly affected.

Advantages and disadvantages of road transport industry

Advantage

  • The government is focusing a lot on this industry. Through the drafting, promulgation, and organization of the implementation of full legal documents for the best development of the industry. Specifically, there are 5 specialized laws, circulars, decrees, guidelines, and implementation throughout the industry.

  • The North-South route has been markedly improved, the project to expand National Road 1A has basically been completed. Shipping businesses are increasing rapidly in quantity, quality is also significantly improved, building up a lot of prestige for customers wishing to use freight services.

    However, there are still some barriers in the sea freight. The widespread construction of seaports leads to supply exceeding demand and directly impact on prices. Low prices will create unbiased competition issues, which will actually have a negative impact on Vietnam's economy. And another barrier is that Vietnamese partners do not fulfill their commitments on the port project support fund.

Difficulties

Limited service quality 

Transport enterprises have not had a good investment not only in transportation vehicles but also in human resources. At present, the means of transport are still rudimentary and do not meet safety. Human resources are still limited in terms of qualifications, expertise, and profession, so it has not yet created the absolute trust from customers.

  • Supply exceeding demand leads to unfair competition
  • Supply increase and demand decrease cause an excess of large means of transportation, that will disrupt planning in transport. A competitive price directly affects on service quality and professionalism of service providers.

Therefore, businesses with a lot of facilities need more investment in human resources and management to improve service quality better. Besides the efforts of the business, there should be the attention and impact of the authorities, the companion of the transport association in the study, and the handling of transport needs.

  • Put the floor price applied in transporting goods into operation, building a price bracket for each mode of transport.
  • Prohibited time is being increased to tighten traffic.
  • When personal vehicles are increasing, the infrastructure does not meet the growing needs of the city, causing traffic congestion in the inner city, especially during rush hour.

Therefore, the city has implemented traffic tightening actions such as restricting and banning trucks from running in the city during rush hours. Currently, Hanoi and Ho Chi Minh City have the following prohibited hours:

1.25-ton truck or less

  • Prohibited from operating during rush hour
  • Traffic is permitted in the city from 9 am to 4 pm and 9 pm to 6 am

Over 1.25-ton truck

  • Circulation in the city is only permitted from 9 pm to 6 am the next day and must have a circulation permit
  • Vehicles with a tonnage of over 10 tons, super-heavy, super-weight, construction vehicles
  • The only circulation from 9 pm to 6 am the following day and must have a special circulation permit.

Inconsistent tax policy 

Transport enterprises in Hanoi said that many provisions in the tax calculation roadmap for transport enterprises were not smooth and incomplete; Existing tolls are not included in the cost or the method of calculating fuel consumption is inadequate, causing many controversies to determine right and wrong.

Complex and instable transportation security

In recent times, on the roads from the North to the South, there has been a continuous situation of mugged vehicles, robbing cargos, stoning stones on means of transport, ... this makes security issues in the transportation industry are threatened, causing waves of panic for customers.

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