Logistics firms asked to strengthen connectivity

A view of Chua Ve container port in Hai Phong city

Currently, most of logistics firms are micro-, small- and medium-sized ones, which hampers the effectiveness of logistics activities, Anh told reporters on the sidelines of a national conference in Hanoi on April 16 to seek ways to reduce logistic expenses and improve transport connectivity.

He suggested the firms apply information technology in administration as e-commerce continues developing and is becoming a driving force for the development of trade in general and logistics activities in particular.

Businesses operating in this sector were advised to gain access to the Government’s development programmes.

The minister also emphasised the importance of maintaining a dialogue mechanism for enterprises and the Government.

Regarding the sector’s shortcomings, Minister Anh pointed to the limited capacity of the economy and businesses themselves, especially in technology and human resources.

The State management on trade, particularly in specialised inspections and import-export activities, remains weak, which results in losses in both time and money for businesses.

In addition, asynchronous transportation infrastructure leads to high costs of logistics services, Anh added.

According to the World Bank, Vietnam ranked 64th amongst 160 countries in the Logistics Performance Index in 2016. The Southeast Asian country’s logistic sector records an annual average growth rate of 14%-16%.

However, the expenses for logistic services accounted for 20.9% of Vietnam’s gross domestic product (GDP), of which transportation costs amount to 59%.

The shipping costs of a 40 feet container from Hanoi to Ho Chi Minh City (excluding loading and unloading costs) is estimated at VND40 million (US$1,762), 9.7 times higher than that of sea routes and 2.5 times higher than that of railways, according to Ministry of Transport.