Vietnam’s logistic costs remain high compared to regional and global average
The forum is running with the theme of "Reducing logistics costs, improving business environment, enhancing competitiveness in the context of international economic integration" and is being held with the aim of helping to improve the competitiveness of businesses. This is amid deeper international economic integration, while simultaneously recovering from a loss in growth momentum caused by the various impacts of the novel coronavirus (COVID-19).
During the forum, Secretary of Hanoi Party Committee Vuong Dinh Hue emphasised that the country’s logistics industry is currently ranked third in Southeast Asia, with a scale of between US$40 billion and US$42 billion. Indeed, the current rate of logistics costs can still be considered to be high, therefore serving to reduce the competitiveness of local firms.
With the goal of developing Hanoi into a major trade exchange hub for the country and the wider region, the capital has proposed many solutions aimed at attracting investment in order to develop commercial and service infrastructure, including logistics infrastructure.
Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), underlined the need to develop an advanced logistics sector that features higher levels of international competitiveness amid intensive international integration following several new-generation Free Trade Agreements (FTAs) coming into force.
With over 4,000 logistics enterprises currently operating in the market, the cost of Vietnamese logistics remains high, making up approximately 20.9% of GDP, a far higher rate compared to other regional countries, double that of developed economies, and higher than the global average of 14%.
He added that transportation costs are also too high, making up between 30% and 40% of product costs, while the rate accounting for roughly 15% in other countries.
Loc therefore underscored the importance of improving logistics activities in relation to infrastructure, administrative procedures, and linkages among domestic companies.
At present, the market share of local logistics services can be viewed as being overwhelmed by foreign businesses, while domestic enterprises hold only 25% of the market share of logistics services.
Stefanie Stallmeister, operations manager of World Bank for Vietnam, pointed out that the country has steadily improved in terms of Logistics Performance Index, moving from a rank of 53 in 2010 to 39 in 2018. This represents a stronger performance in the rankings compared to its regional neighbours, including Malaysia, Indonesia, and the Philippines, but trailing behind Thailand, Singapore, China, and Hong Kong (China).
Stallmeister noted that the country’s integration into global and regional markets through the Regional Comprehensive Economic Partnership (RCEP) and the EU-Vietnam Free Trade Agreement (EVFTA) has increased the impetus to boast a strong and competitive logistics sector.
These trade agreements will serve to generate greater trade between the nation and its trading partners, thereby boosting economic growth and reducing poverty. An increase in trade flows will also boost demand for better and more competitive logistics services.
According to the WB official, two new trends have emerged from the COVID-19 pandemic that can be seen as relevant for the domestic logistics sector, including an acceleration of e-commerce and the use of digital platforms nationwide.
She went on to reveal that businesses are turning to e-commerce and digital platforms in an effort to reach consumers more easily, especially during periods of reduced operations and mobility restrictions. Indeed, customers are also becoming more comfortable with digital tools in order to purchase goods and services.
In a World Bank survey conducted in June, almost 50% of businesses reported an increase in their use of digital platforms as a way of adapting to the COVID-19 pandemic. As the trend of e-commerce accelerates, there will be an increase in demand relating to logistics services and the need for last-mile delivery.
Furthermore, the use of digital technology solutions will also help to improve efficiency and offer new services for customers. By adopting digital technologies, companies will be able to offer cargo visibility and traceability, whilst also communicating with customers online. This will require investment in technology such as the Internet of Things (IoT), cloud computing, automation, and data analytics. In addition, frontier technologies, such as robotics, drones, and autonomous vehicles can also increase the efficiency of logistics service providers, she stressed.
Related News

Vietnam kicked off the year with a strong start in trade, exceeding US$63 billion in the first month
16:30 | 15/02/2025 Import-Export

Vietnam, Korea Customs sign AEO MRA
11:07 | 26/12/2024 Customs

Prioritizing semiconductor workforce training
09:16 | 15/12/2024 Headlines

Vietnam-Cambodia: Looking back on journey of cooperation
14:45 | 11/12/2024 Customs
Latest News

Embracing green exports: a pathway to enter global supply chains
10:33 | 20/02/2025 Import-Export

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises
10:32 | 20/02/2025 Import-Export

Việt Nam’s durian exports to China plummet by 80%
16:18 | 19/02/2025 Import-Export

Coconut exports reach 14-year high
15:29 | 18/02/2025 Import-Export
More News

Shrimp exports grow in the first month of 2025
15:28 | 18/02/2025 Import-Export

Rice export prices drop, but decline expected to be short-term
08:10 | 17/02/2025 Import-Export

Key agro products expected to maintain export growth this year
08:08 | 17/02/2025 Import-Export

EU issues 12 warnings against Việt Nam’s food and agricultural exports
08:07 | 17/02/2025 Import-Export

Việt Nam to impose VAT on low-value express-imported goods
08:06 | 17/02/2025 Import-Export

Exchange rate risks need attention in near future
16:31 | 15/02/2025 Import-Export

Import and export turnover reaches about US$29 billion in the second half of January 2025
14:52 | 14/02/2025 Import-Export

Market edges up slightly as liquidity remains low
14:48 | 14/02/2025 Import-Export

Business regulations must be trimmed for development of enterprises: Experts
14:46 | 14/02/2025 Import-Export
Your care

Embracing green exports: a pathway to enter global supply chains
10:33 | 20/02/2025 Import-Export

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises
10:32 | 20/02/2025 Import-Export

Việt Nam’s durian exports to China plummet by 80%
16:18 | 19/02/2025 Import-Export

Coconut exports reach 14-year high
15:29 | 18/02/2025 Import-Export

Shrimp exports grow in the first month of 2025
15:28 | 18/02/2025 Import-Export