Logistics Railway

8/8/2019 Logistics Railway

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PRESENTATIONS OUTLINE

1. Overview of Railway System in Vietnam (Ms.Cuong)

2. Roles of Government on Railway Logistics (Mr.Dung)

3. Demand and Supply of Railway Logistics (Ms.Van Anh+Ms Giang+Ms Dung)

4. Market structure (Mr. Hiep)

5. Market conducts (Mr.Hai)

6. SWOT analysis on Railway Logistics of Vietnam (Mr.Hieu +Mr.Viet)

7. Recommendations (Mr.Tuan)


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1. Overview of Railway system in

Vietnam1.1.History of Railway systems in Vietnam

1.2.Current Railway networkin Vietnam

1.3. Organization Chart of Vietnam Railways


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Vietnam1.1.History of Railway systems in Vietnam Long history with over 100 years of establishment with the

first route f rom Saigon to My Tho and vice verse started on

20th

July 1885 Main railway system was built during the period f rom 182 to

1936based on the French technology with the width of1metre

for railway lane.

During 2 wars, railway system was almost destroyed.

After unification, the railway system was repaired and

recovered since 1976 and started to modernize the railway

system between the North and the South since 1989.


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Vietnam

1.2.Current Railway network inVietnam

With a total length of 2600 km,

Vietnam Railways network connects

residential area to cultural,

agricultural and industrial center,except the Mekong river delta area

When it is more developed, Vietnam

railway network is possibly linked to

Cambodia, Thailand and Malaysia

railways network via which to

Singapore and Laos railways . Vietnam Railways is using 3 kinds of

gauge, namely 1000 mm-gauge, 1435

mm-gauge (standard gauge) as well

as 1435 mm and 1000 mm-gauge

(mixed gauge)


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1. Overview of Railway system in Vietnam

1.3.Organization Chart of Vietnam Railways


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2. Roles of Government on

Railway Logistics

Governmental bodies (MoT, other line Ministries, VRC)

acts as:

(i) investors forrailway infrastructure development;

(ii) management bodies in actual operation of the railwaysystem;

(iii) regulators in issuing regulations foroperation ofrailway

system and railway logistics

(iv) sponsors in providing the subsidies;

(v) Plannerin masterplan forfuture development;

(vi) Operatorfordaily management of subsidiaries and sub-units


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2. Roles of Government on

Railway Logistics (cont.)

Role of VRC:

Vietnam Railways re-organized into a national corporation,namely Vietnam Railway Corporation, at Decree No.34/2003/Q-TTg dated March 04, 2003 by the Prime

Ministerconsists of different self-sufficing and financially

dependent enterprises

VRC acts as the coordinatorin consulting forMoT andcooperation among companies, sub-units and railwayoperations centers underthe VRC

VRC is responsible forsetting up the long term masterplanformodernization ofrailway system


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3. Demand and Supply of

Railway Logistics

3.1.Features of demand in Railway Logistics

3.2.Current Supply of Railways Logistics in

Vietnam

3.3. Features of Supply of Railway Logistics

in Vietnam


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Railway Logistics

3.1.Features of demand in Railway Logistics Cost forrailway freight is reasonable in comparison with China and

Thailand.

As Vietnam is geographically shaped as S, the sea/waterways

freight forgoods and cargo are more preferable than railway freight

Railway system is not available forall parts of the countries -> not

develop the local logistics


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Railway Logistics3.2.Current Supply of Railways Logistics in Vietnam

Table: Railway freight carried, Domestic, from 2005 to 2013

Criteria 2005 2006 2007 2008 2009 2010f 2013f

Rail (tonnes-km,

bn)

1,448 1,573 1,715 1,870 2,049 2,240 5,630

% change y-o-y 8.4 8.6 9.0 9.0 9.6 9.3 8.8

% change 5-yearaverage

2.8 6.7 7.4 8.0 8.9 9.1 6.9

Source: Vietnam Freight Transport Report 2009


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3. Demand and Supply of Railway Logistics

3.2.Current Supply of Railways Logistics in Vietnam

Table: Volume of freight by type of transport

Source: G

SO2009

Of which:

Railway RoadInland

waterway

Maritine

transport

Aviation

transport

%

2000 2.80 64.59 25.64 6.95 0.02

2001 2.56 65.05 25.70 6.67 0.03

2002 2.41 65.67 25.59 6.31 0.02

2003 2.41 64.88 24.77 7.90 0.03

2004 2.20 65.70 24.30 7.77 0.02

2005 1.91 64.77 24.15 9.14 0.02

2006 1.78 65.93 23.95 8.31 0.02

2007 1.52 67.59 22.67 8.21 0.02

2008 1.30 68.34 21.15 9.20 0.02

2009 1.26 7.03 18.29 73.40 0.02


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Railway Logistics

3.3. Features of Supply of Railway Logistics in

Vietnam

Depends much on the rights and obligations regulated by the

Governmental bodies

Mixture between the management ofrail infrastructure from

passengers and cargo services

Involvement of private sectors almost zero, only supporting

services

Have connection with othertypes of logistics (waterway,airlines, roadways, etc) forprovision of multi-modal

transportation

Currently, provide forlocal transport only, but in future can

cooperate with neighboring countries


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4. Market structure

RAIL STATIONS/

OPERATORS

VIETNAM RAILWAY

CORPORATIONS

LOCAL

GOVERNMENTS

MINISTRY OF

TRANSPORTATION

CUSTOMERS

OTHER LINE

MINISTRIES

FREIGHT

FORWARDERS

Direction

Direction

Subsidies

Fares/ Freights

Fares/ Freights

Co-operation

Regulation

Fares/ Freights

Monopoly market: The Government bodies monitor and manage the

infrastructure, operation and improvement of railway systems andlogistics


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5. Market conducts

Market forrailway services are operated under

the supervision of Vietnam Railway Corporation

Ministry of Transportations, otherline Ministries

(MoF, MoIT, MONRE, etc) and local

governments regulate the fundamental rules for

operation ofrailway logistics

All participants in railway logistics co-ordinate

with each otherin both administrative and market

relationship.


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6. SWOT Analysis

6.1. Strengths of Railway logistics in Vietnam

6.2. Weakness of Railway logistics in Vietnam

6.3. Opportunities of Railway logistics in

Vietnam

6.4. Threats of Railway logistics in Vietnam


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6. SWOT Analysis

6.1. Strengths of Railway logistics in Vietnam Cost less in infrastructure repairing as used forthe

typical transport vehicles

Save the energy and protect the environment

Less be affected by the weatherand climate Relatively safe in comparison with othertransportation

means

Lowercosts in comparison with othertypes of

transportation (road, airway) More preferable in short and fixed routine


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6. SWOT Analysis6.2. Weakness of Railway logistics in Vietnam

Infrastructure is not well developed due to the low startingpoint for infrastructure development-> limited in availableroute

Services are relatively less professional than othertransportation means due to the lackof professional human

resource

Participation of private sectoris limited -> less competitiveand slow in services and operation improvements

Provide services for local market only ->> hard forfuturecompetition underthe open market condition according to the

WTO commitments Though all participants are controled by Governmental

agencies, the linkage and connection among them are stillloose, not strong enough

Lackof a good strategy forbuilding up the trademarkfor

railway logistics industry in Vietnam


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6. SWOT Analysis

6.3. Opportunities of Railway logistics inVietnam

The development of local trade and internationaltrade ->> increase the demand forrailwaylogistics services

The policy formodernization ofrailway systemstated by the Government

The policy allowing the participation of privateand foreign sector->> improve much the

infrastructure


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6. SWOT Analysis

6.4. Threats of Railway logistics in VietnamFace with the tuff competition underthe

commitment formarket openness of WTO

The regulations and legislation standards are

complicated

Multiple layers of administration management

among ministries and local government leads to

corruption and/ortime-consuming


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7. Recommendations

Improving the current railway systems by callingforthe investment from local and foreigninvestors

Set up and build more new and convinient routeforcargo transportation

Separate the management and operation ofpassengertransport and cargo transport

Conduct some market survey to analyze the localmarket and potential forrailway logistics services

Promote the trade markofrailway logistics tomake it familiarwith the logistic demanders


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THANK YOU!

Thankyou!

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Logistics Railway