Reducing logistics costs essential to increase competitiveness

Lowering logistics costs is essential to increase competitiveness (Photo: VNA)

More efforts are needed to lower logistics costs, which are still kept at a high level, to increase the economy’s competitiveness, according to insiders.

Deputy Minister of Planning and Investment Tran Duy Dong said that in recent years, Vietnam has actively improved logistics infrastructure and related mechanisms and policies. As a result, both capacity and ranking of Vietnam's logistics industry are improving.

According to the World Bank's rankings, Vietnam currently ranks 64 out of 160 countries in terms of logistics development and ranks fourth in the Association of Southeast Asian Nations (ASEAN). The annual growth rate of the sector reaches 14-16%, with a scale of 40-42 billion USD a year.

To date, there are more than 3,000 domestic transportation and logistics enterprises, together with 25 world leading delivery groups providing services in Vietnam.

However, most of Vietnamese logistics enterprises are of small and medium sizes, with 93-95% of their workforce not being trained methodically.

Vietnam still lacks concentrated logistics warehouses with strategic locations associated with ports, airports, roads, and production facilities.

In addition, a multimodal transport corridor has not yet been formed while the need for high-quality transshipment of goods is increasing.

Trucks of a logistics company in Hai Duong province (Photo: qdnd.vn)

In 2022, logistics costs in the country were estimated to account for about 17% of gross domestic product (GDP), a significant decrease compared to 2018 (about 21% of GDP). However, this figure remained high compared to the world average.

Therefore, lowering logistics costs to reduce product costs and increase competitiveness is an important target set by the Government, ministries, sectors and localities.

The country is striving to complete 3,000km of expressways by 2025 and 5,000km by 2030. In addition, the construction of coastal roads, connecting roads, seaports and airports is also receiving special attention, thus contributing to increasing the competitiveness of the economy as well as reducing logistics costs for enterprises.

Deputy Minister Dong proposed localities build policies in support of the development of logistics services in accordance with their socio-economic characteristics; and create favourable conditions for enterprises operating in this field to gain easy access to capital resources./.