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Connecting agriculture producers to railway and airway

The pandemic of COVID-19 has had negative impacts on the global supply chain, causing damages to the logistics. To limit impacts from the pandemic and to compensate loss of income from passenger transport, both railway and airway sectors keep upgrading their facilities to improve their service for serving cargo transport, especially for agricultural product transport.

On September 8th, the Import-Export Agency (the Ministry of Industry Trade) cooperated with the Vietnam Digital Agriculture Association (VIDA), the Vietnam Logistics Business Association (VLA), the Vietnam Industry and Trade Information Center (VITIC) and the Vietnam Railways to hold an online conference to connect agriculture producers to railway and airway.

The conference was held to introduce a deeper and comprehensive look on transport activities by railway and airway, to provide information about assistance from logistics enterprises to agriculture enterprises, to connect directly between supply and demand to minimize logistics expense, and to improve competition abilities to help Vietnam’s agriculture sector to reach a new stature in the global agriculture.

LOGISTICS - A “TIGHT KNOT” TO VIETNAM’S AGRICULTURE

According to data from the Ministry of Agriculture and Rural Development, the agriculture sector brings jobs and income to around 70% of the population, accounting for 15% of GDP and 30% of the export values. Agriculture production is one of Vietnam’s important export sector, contributing a large part to the country’s export turnover. Many products are in large export groups as rice, cashew, coffee, rubber and tapioca...

Tran Thanh Hai, Deputy Director of the Import- Export Agency- the Ministry of Industry-Trade- said in 2019, Vietnam’s import- export turnover reached nearly USD 25.5bn, including 6 key export products having reached turnovers of over USD 2bn. For example, aqua- products reached USD 8.5bn; fruits and vegetables, USD 3.7bn; cashew, USD 3.2bn; coffee, USD, 2.86bn and rice, USD 2.81bn.

Besides achievements, Vietnam’s agriculture export is facing difficulties and challenges. And logistics activities to agriculture is one of the factors that have made Vietnam’s agriculture unable to completely perform its advantages in competition.

Logistics “knots” should be mentioned are the stage of preservation and infrastructures. With natures of agricultural products as short-time use, seasonality and vulnerability, logistics activities serving agriculture transport require an integrated process from the stages of production, harvesting, processing, packaging, storing, transport and delivery to end users, however, the chain is loose. Systems of warehouses and processing factories have not been properly invested and there has been the shortage of cold warehouses.

Besides, the matter of focusing on road transport in transporting export agriculture products has had particular influence to Vietnam’s competition abilities due to high transport cost. Besides, there have been frequent congestions at border gates due to the fact that clearance abilities are unable to deal with great amount of

There should be a cargo airlines with a specialized fleet serving Vietnam’s agriculture cargo or post cargo for lower transport cost.

Do Xuan Quang , Deputy General Director of Vietjet Air Cargo

export cargo at peak times.

CONNECTING AGRICULTURE PRODUCERS TO RAILWAY AND AIRWAY

According to survey on means of agriculture and cold cargo transport, road transport is preferable for its flexibility and short time of transport, especially to markets with the same border lines. Sea transport comes next thanks to low cost, suitable to export to far markets and to goods of low seasonal.

Airway and railway transports have not been very popular for the high cost in air transport which is not suitable to low-cost agricultural products and the lack of flexible connection...

In the first 6 months of 2020, the export amount by railroad reached 420,000 tons. However, the amount of agricultural products imported by railroad was modest, accounting for only 4% (17,400 tons) of the total cargo imported- exported by the railroad.

According to Nguyen Chinh Nam, Manager of the Planning- Sales, Vietnam Railways, the railway sectors has had investments to improve quality of their cars to develop self-propelled container transport, to provide closed transport service...

To develop import-export agriculture products, the railroad sector has been working with related countries on technological solutions, information, fees for reasonable costs.

Inter-transport cargo trains to China have been deployed for their advantages as short-time transport, quick official clearance procedure as Dong Dang- Bingzshengz, and no transshipment for cargo going deeper in China land.

In air transport, Do Xuan Quang - Vietjet Air Cargo’s Deputy General Director said, local airlines are smaller in size compared to foreign ones. They have mainly exploited passenger planes’ bellies and there have been no investment in freighters so far. Foreign airlines have captured the international transport cargo market (nearly 90%).

The high airway cost, especially in the time of COVID-19 the time when there have been a halt to passenger-transport planes and there have been no specialized flights for cargo transport, is also a reason that makes our agricultural products difficult to be exported and compete with those from other countries.

Quang said there should be a cargo airlines with a specialized fleet serving Vietnam’s agriculture cargo or post cargo for lower transport cost. And there should be strong investments on logistics systems serving storage, preservation, and clearance that ensure the quality of Vietnam’s agricultural products.

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