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City traffic jams badly hurt local importers, exporters
Local importers and exporters have jumped on the bandwagon of businesses suffering losses because of the traffic gridlocks that plague city streets.
“It takes around 25 trucks to carry 10,000 tons of steel from a port to our warehouse in Binh Duong Province,” said Pham Trung, deputy general director of the Hoa Sen Group, which produces corrugated iron sheets.
“We used to plan that the truck carrying the first batch will also carry the last. But the heavy traffic delays the drivers and they can never make it back on time.
“Ships carrying our steel, meanwhile, cannot wait for too long at the port. So we have to unload the shipment to the port’s warehouses and it costs a lot of money.”
Trung estimated that leaving the goods at ports’ warehouse will cost his business an extra expense of VND200 million (US$12,000) at the least.
Holcim Vietnam, a joint venture between Swiss cement maker Holcim Group and Vietnam Cement Corp., is also hurt by the traffic congestion as it has to import a huge amount of materials for its cement production every month, said Thuong from the company’s logistics department who declined to give his full name.
He said his company regularly has to pay $5,000-6,000 a day to the ships’ owners for unloading shipments later than agreed.
“Dealers are unwilling to buy cement at our Cat Lai factory as they are so scared of consecutive traffic jams at the Cat Lai Tjunction which leads to the plant,” Thuong told Thanh Nien.
Nguyen Van Hoang, Deputy Director of the Dong Tien Textile Joint Stock Co. said it should take around 1- 1.5 hours to drive from his factory in
Dong Nai Province to the Cat Lai Port, but the actual time can never be counted because of traffic jams.
“Ships will sail away when we arrive late. Containers will then have to be delivered by air to keep up with the shipping time in the agreement we signed with foreign buyers. It costs $1,100 to deliver a 20-feet container, but the fee will be $32,000 to deliver it by air,” Hoang said.
“Every single company has to suffer traffic jams. Scenes of thousands of container trucks getting stuck on the way from ports are common,” said Tran Quoc Manh, director of furniture exporter Saigon Trade and Development Corporation (Sadaco).
Manh said traffic problems at Thu Duc District’s Go Dua crossroad, near Binh Phuoc Port, which have lasted for many years, forced local firms to carry their shipments to the port much sooner than ships’ departure date and pay warehouse fees.
“HCMC’s annual export growth rate has been 20-25 percent for many years,” said Diep Thanh Kiet, vice chairman of the Vietnam Footwear Association. “So the transport demand in the town is very high.
“However, many roads for container trucks are being narrowed. Many businesses have told me they lost many orders because of traffic problems in town”.
Losing customers
Roger Lo, official from Far Eastern Apparel Vietnam Ltd., said traffic jams also hamper foreign investors looking for investment opportunities in Vietnam.
“Our parent company in Taiwan usually recommends customers seeking investment cooperation in Vietnam,” Lo said. “But they can only find two partners instead of four because it takes a lot of time to travel around the town. Obviously, Vietnamese companies are losing opportunities.”
Many foreign investors also said bad traffic in Ho Chi Minh City was an obstacle to their business in Vietnam, so they’ve switched their investments to the north.
Land rentals at industrial zones in the north are getting higher than in the south because of growing demand, according to Dang Thi Hoang Phuong, General Director of the Saigoninvest Group.
She also said traffic infrastructure has become better in the north than in the south.
Vietnam’s infrastructure, particularly power, sea port and traffic, will threaten foreign direct investment in its export and industry sectors, Thomas Siebert, chairman of the American Chamber of Commerce in Vietnam, had said at an earlier conference in Ho Chi Minh City.
Tran Tam
thanhnien
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