Poor logistics hinder Mekong Delta agri exports

"Logistic costs accounts for 30 percent of product price, which is an unreasonably high proportion. In Thailand the figure is 12.5 percent, and the average global figure, 14 percent. This hinders Mekong Delta agriculture products from competing with equivalents from Thailand and China," said Pham Tien Hoai, chairman of Hau Giang Business Association.

Ngo Tuong Vy, deputy director of Chanh Thu Import-Export Limited Company, specializing in agriculture products, said: "Air transport fees for fresh Vietnamese dragon fruit to Japan is $6 per kilogram."

She said fresh fruit need to be well-preserved after harvest so it could be exported by sea to reduce costs.

Mekong Delta contributes 90 percent of the country’s rice exports, 65 percent of seafood exports, and 70 percent of fruit exports.

It has a total seven ports, of which the largest is Long An International Port in southern Long An Province. The latter can accommodate cargo ships with a capacity of 70,000 tons. The second largest is Cai Cui Port in the Mekong Delta city of Can Tho, which can handle 20,000 ton cargo vessels. It also has 57 inland waterway ports.

Experts say the Mekong Delta waterway traffic system is of low quality, limiting the capacity of cargo ships operating in the area.

There are only two ways to reach Hau River ports via either Dinh An and Quan Chan Bo estuaries. However, the Dinh An estuary has not been dredged for years and can only handle cargo ships of 3,000 tons. The Quan Chanh Bo estuary can handle cargo ships from 7,000-10,000 tons, but does not have breakwaters, meaning vessels can only operate at low speed to prevent waves from affecting nearby aquaculture projects. Thus, ships normally take a day to pass through the 26-kilometer Quan Chanh Bo estuary.

Heads of export firms said Mekong Delta lacks deep-water ports for container ships serving export, besides logistic centers, warehouses and irradiation facilities.

Agriculture products from Mekong Delta have to be shipped to Ho Chi Minh City (HCMC) and the southeast region of Vietnam to be exported. However, ports in HCMC and the southeast are usually overloaded, upping warehouse costs and export duration.

"The Government needs to upgrade the Quan Chanh Bo estuary to ensure it could handle high capacity cargo ships (up to 20,000 tons)," said Vo Thanh Phong, CEO of logistic firm Hau Giang Maritime Service Limited Liability Company.

He added the Cho Gao channel in Tien Giang Province needs to be dredged and upgraded for barges with capacities of over 3,000 tons to operate, which would reduce transportation duration and costs.

The Ministry of Transport has proposed the government build a deep-water port in the Mekong Delta province of Soc Trang that can handle cargo ships with capacities of 100,000 tons to meet regional export and import demand.