Upgrade of railway infrastructure for goods exports

Illustrative photo

The Song Than Station in the Southern Province of Binh Duong’s Di An City - a technical station with 13 loading and unloading tracks and 7 cargo yards - is an important transport hub of Binh Duong Province, Ho Chi Minh City and the Southern region. Since September last year, the Railway Transport and Trading Joint Stock Company (Satraco) opened an intermodal freight route, from Song Than station to Dong Dang station in the Northern Province of Lang Son and then to China.

Satraco rents warehouses, ship chartering and receives goods for businesses in need, or proactively finds goods and stores them in cold storage. After the opening event, businesses are more interested in this type of transportation because it saves 20 percent to 25 percent of freight compared to road transport.

Deputy General Director Nguyen Hoang Thanh of Satraco said that the demand for transporting goods to serve the industrial parks of Binh Duong, Dong Nai and Ho Chi Minh City is very high. Previously, because international transport could not be implemented, import and export goods through Song Than station only accounted for 10 percent-15 percent of the total output transported through the station.

Currently, the amount of goods has increased. Every day, Satraco averagely hires 1-2 transportation trips with more than 500 tons of goods per trip, while the company didn’t receive any orders some times before. However, although transportation demand has increased, the competitiveness of the railway industry is quite weak because of outdated infrastructure, small warehouses, and transportation time from Song Than station to Dong Dang station takes 3 days and nights.

According to Head of Song Than Station Do Van Tuan, at many times of the year, especially during the agricultural harvest season, when export goods increase, overloading was seen at the station.

To address the goods overload at the station, the authorities have just coordinated to hand over nearly 6,500 square meters of land in the station area to install two more railways, redo all loading and unloading yards, and expand warehouses with a total capital of more than VND100 billion (US$3,989,931). When the additional railway project is completed, it will contribute to the improvement of the current operating capacity to 21 trains a day with freight transport capacity from the current 1.6 million tons a year to 2.5 million tons a year.

In the Northern region, the demand for trade, import and export of goods between Vietnam and China through border gates in Lang Son and Lao Cai is currently huge, but capacity still does not meet the needs of businesses. The Dong Dang International Railway Station in the Northern Province of Lang Son with an area of about 56,000 square meters can connect to China's railway system; therefore, it is considered a potential intermodal border gate.

Nevertheless, its operational efficiency has not good as expected for many years. In 2023, the total value of Vietnam's import and export goods through Lang Son Province was more than $4.78 billion but the import-export turnover through Dong Dang station only reached $136 million.

Head of Dong Dang International Intermodal Station Pham Duc Khai admitted that businesses are not interested in transporting goods through the station because the station's infrastructure system has degraded and cannot meet the needs of trade, loading and unloading capacity, and lack of connecting roads. Meanwhile, Lao Cai province has up to three railway lines, including a national railway line and two specialized routes. Vietnam's export goods are mainly agricultural products, fruits, ores of all kinds and goods from China are also in transit to other countries.

However, a representative of Lao Cai Province said that trade activities are not as expected because there is no international-class logistics center, and infrastructure is still fragmented; plus, many logistics businesses are operating but most of them are small. To increase capacity freight forwarding by rail in Lang Son and Lao Cai provinces, Vietnam Railway Corporation has recently worked with local leaders.

Chairman Dang Sy Manh of the Board of Members of Vietnam Railway Corporation requested Lao Cai Province to issue policies to support import-export businesses via the railway; and build an area for inspection, control, quarantine and customs clearance of agricultural - forestry - aquatic products transported by rail. Chairman of Lao Cai Provincial People's Committee Trinh Xuan Truong also requested the Ministry of Transport to build a standard gauge railway Lao Cai - Hanoi - Hai Phong and complete the plan to connect the double gauge railway between Lao Cai station and Hekou Bei station in China’s Yunnan Province.

Similarly, Vice Chairman Doan Thanh Son of the People's Committee of Lang Son Province said that he had requested Cao Loc District and related agencies to urgently clear the site for the project to renovate and upgrade items in the Dong Dang station area. Lang Son province leaders also proposed that Vietnam Railways Corporation soon renovate the Hanoi - Dong Dang railway line into a high-speed railway line, upgrade infrastructure in the Dong Dang station and especially the refrigerated container railcar systems for transporting agricultural products and fresh fruits.