The impact of railways on logistics & freight transport

Vietnam’s logistics costs currently account for 16–18% of GDP, significantly higher than the global average of 10–12%. This high cost undermines competitiveness and highlights the urgent need for supply chain optimization. Among available solutions, rail transport is emerging as a strategic alternative, complementing and, in some cases, replacing road and maritime transport.

Railways not only help reduce costs and shorten delivery times but also enhance national competitiveness and integrate Vietnam more deeply into ASEAN–China–global supply chains.

Advantages of railways in logistics

Competitive costs

• • Rail transport is 30–40% cheaper than road transport for long distances.
    
  • Less affected by fuel price fluctuations, ensuring stable logistics costs.
    

High carrying capacity

• • A single freight train can replace 40–50 heavy-duty trucks.
    
  • Ideal for transporting containers, bulk goods, heavy cargo such as steel, cement, coal, and agricultural products.
    

Stable & safe

• • Less vulnerable to weather or road congestion.
    
  • Far fewer accidents compared to road freight.
    

Environmentally friendly

• • Reduces CO₂ emissions by 60–70% compared to trucking.
    
  • Aligns with green logistics and sustainability goals.
    

Strategic railways routes

• • Hanoi – Lao Cai – Kunming (China): strong corridor for agricultural exports, textiles, and electronics.
    
  • Hanoi – Dong Dang – Nanning (China): a vital international trade route.
    
  • North–South Railways: the backbone of domestic freight, with potential to be upgraded into a dedicated high-speed freight corridor.
    

Current challenges

• • Outdated infrastructure: most freight lines limited to ~50 km/h.
    
  • Poor intermodal connections: weak links with seaports and ICDs (inland container depots).
    
  • Policy gaps: lack of incentives for businesses to shift from road to rail.
    

Development trends

• • Investment in high-speed freight railways to meet rising logistics demands.
    
  • Promotion of multimodal logistics: seamless integration of rail, road, sea, and air transport.
    
  • Digital transformation in logistics: adoption of IoT, AI, and blockchain to manage containers and increase transparency.
    

Role of A-Connection

With expertise in infrastructure, MEP, and fire safety systems, A-Connection can play a key role in Vietnam’s logistics transformation:

• • Develop freight stations, depots, ICDs, and intermodal hubs.
    
  • Provide MEP, HVAC, and fire safety solutions for warehouses and logistics facilities.
    
  • Support logistics enterprises in digital transformation and green infrastructure deployment.
    

Railways represent the key to lowering logistics costs, boosting competitiveness, and strengthening Vietnam’s global integration. This is the golden moment to invest in freight rail infrastructure, aligning with Vietnam’s national logistics strategy and paving the way for the country to become an ASEAN transport hub.

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