When selecting a factory site in Vietnam, evaluating the transportation network is a crucial step that directly impacts operational efficiency and logistics costs. Below is a detailed evaluation guide, including specific evaluation objectives, calculation processes, and assessment standards to help companies make more informed site selection decisions.

1. Evaluating Proximity to Transportation Hubs

Determine the factory’s proximity to major transportation hubs (airports, ports, railways) and its impact on logistics efficiency and costs.

1.1 Calculating Distance to the Nearest Airport:

Use Google Maps or GIS systems to measure the straight-line distance and actual driving distance from the factory to the nearest international airport. The distance should ideally be within 50 kilometers to ensure transportation time does not exceed one hour.

• Formula: Transportation time = Distance / Average speed (assuming an average speed of 50 km/h).
• Assessment Standard: Transportation time ≤ 1 hour scores 5 points; 1-2 hours scores 3 points; > 2 hours scores 1 point.

1.2 Calculating Distance to the Nearest Port:

Evaluate logistics costs by checking the annual cargo throughput of the port and the distance from the factory. Prioritize sites within 50 kilometers of major ports (such as Haiphong Port or Cai Mep Port).

• Formula: Annual logistics cost = Number of shipments per year × Cost per shipment (based on distance).
• Assessment Standard: Logistics cost < 100,000 VND/ton scores 5 points; 100,000-150,000 VND/ton scores 3 points; > 150,000 VND/ton scores 1 point.

1.3 Evaluating Railway Proximity:

Measure the distance from the factory to the nearest railway freight station and evaluate rail transport time and costs. Prefer sites within 10 kilometers of a freight station.

• Formula: Railway transport time = Distance / Average train speed (assuming an average train speed of 40 km/h).
• Assessment Standard: Transport time ≤ 30 minutes scores 5 points; 30-60 minutes scores 3 points; > 60 minutes scores 1 point.

2. Evaluating Road Infrastructure and Logistics Accessibility

Assess the quality and accessibility of roads around the factory and their impact on daily logistics and emergency situations.

2.1 Evaluating Proximity to Highways:

Measure the distance from the factory to the nearest highway entrance. Keep the distance within 10 kilometers to ensure quick access to main roads.

• Formula: Highway access time = Distance / Average speed (assuming an average speed of 60 km/h).
• Assessment Standard: Access time ≤ 10 minutes scores 5 points; 10-20 minutes scores 3 points; > 20 minutes scores 1 point.

2.2 Evaluating Regional Road Quality:

Conduct on-site inspections and review government road quality reports to assess road smoothness, width, and traffic flow.

• Formula: Road passability score = (Smoothness score + Width score + Traffic flow score) / 3.
• Assessment Standard: Average score ≥ 4 points indicates excellent road conditions; 3-4 points indicate good road conditions; < 3 points indicate average or poor conditions.

2.3 Evaluating Logistics Facility Availability:

Score the distribution and quality of regional logistics facilities, such as warehousing centers, cold chain facilities, and freight stations, to ensure the integrity of the logistics chain.

• Assessment Standard: Fully equipped and modern facilities score 5 points; fully equipped but outdated facilities score 3 points; lack of facilities scores 1 point.

3. Government Support for Transportation Projects and Policy Evaluation

Understand and utilize local government investment plans in transportation infrastructure to ensure the long-term sustainability of the transportation network.

3.1 Evaluating Transportation Infrastructure Investments:

Check the government’s five-year plans to understand the budget and expected completion times for transportation projects. Prioritize areas with clear transportation improvement plans.

• Formula: Project completion time = Planned start year + Project duration.
• Assessment Standard: Project completion within 3 years scores 5 points; 4-5 years scores 3 points; > 5 years scores 1 point.

3.2 Evaluating Policy Support and Incentives:

Obtain information on investment incentives related to transportation facilities from local investment promotion offices, and assess their impact on costs.

• Assessment Standard: Clear tax exemption and subsidy policies score 5 points; partial support policies score 3 points; no clear policies score 1 point.

4. Natural Disaster and Environmental Impact Assessment

Assess the natural disaster risks and traffic congestion conditions in the factory’s location to ensure site safety and transportation network stability.

4.1 Evaluating Natural Disaster Risks:

Use disaster risk maps provided by the Vietnam Disaster Management Authority to assess potential impacts of floods, typhoons, and other risks on the transportation network.

• Formula: Natural disaster risk score = (Flood risk score + Typhoon risk score)/2
• Assessment Standard: Risk score ≤ 2 points indicates low risk, suitable for siting; 3-4 points indicate moderate risk, requiring enhanced protection; ≥ 5 points indicate high risk, unsuitable for siting.

4.2 Evaluating Traffic Congestion:

Analyze traffic flow and congestion duration during peak hours to assess the stability of the transportation network.

• Formula: Congestion time score = Average congestion duration / Total traffic duration.
• Assessment Standard: Congestion time ≤ 10% scores 5 points; 10-20% scores 3 points; > 20% scores 1 point.

5. Risk Management and Emergency Planning

Ensure that the factory can continue operations and maintain supply chain stability in case of transportation network disruptions or other emergencies.

5.1 Emergency Route Planning:

Develop multiple emergency transportation routes through on-site inspections and transportation department data to ensure alternative options if the main road is disrupted.

• Formula: Emergency route score = (Main route accessibility score + Emergency route accessibility score) / 2.
• Assessment Standard: Score ≥ 4 points indicates suitable siting; 3-4 points suggest improvement space; < 3 points suggests reconsideration of the site.

5.2 Evaluating Supply Chain Diversification:

Evaluate alternative supply capabilities in the event of a primary supply chain disruption by contracting with multiple suppliers and logistics companies.

• Assessment Standard: 3 or more alternative supply chains score 5 points; 1-2 alternative supply chains score 3 points; no alternative supply chain scores 1 point.

6. Relevant Resources and Contact Information

6.1 Government Departments and Agencies:

• Vietnam Ministry of Transport: Responsible for transport policies and planning.
  • Contact: +84 24 3941 9014, Website: mt.gov.vn
• Local Traffic Management Bureaus: Responsible for local traffic implementation and management. Contact information can be obtained through local government websites.

6.2 Logistics Companies:

• Giao Hanh: Provides national and international logistics services.
  • Contact: +84 28 3823 8899, Website: giao-hanh.vn
• Sotrans: Mainly provides freight and warehousing services.
  • Contact: +84 28 3829 4256, Website: sotrans.com.vn

By following the above detailed evaluation steps and calculation methods, companies can comprehensively consider transportation network factors in the process of selecting a factory site in Vietnam, ensuring the scientific and feasibility of site selection. This not only helps optimize logistics efficiency and reduce costs but also enhances the competitiveness and long-term sustainability of the business in the Vietnamese market. We hope this guide provides substantial help and guidance for Chinese companies in making investment decisions in Vietnam.