National conference seeks ways to reduce logistics costs

A World Bank report showed that the expenses for logistics services accounted for 20.9 percent of Vietnam’s gross domestic product (GDP), of which transportation costs amount to 59 percent. 


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Ways to reduce logistics costs and improve transport connectivity were the main topics of a national conference held in Hanoi on April 16 under the chair of Prime Minister Nguyen Xuan Phuc.

A World Bank report showed that the expenses for logistics services accounted for 20.9 percent of Vietnam’s gross domestic product (GDP), of which transportation costs amount to 59 percent.

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

The high costs of road transportation is due to unhealthy competition as transactions are conducted mainly through intermediaries and transport businesses have failed to optimise their operations, Deputy Minister of Transport Nguyen Van Cong explained, adding that the costs of oil and petrol make up around 30-35 percent while the toll fees account for about 10-15 percent.

Meanwhile, the transportation via railways, inland waterways and sea routes has yet been upgraded with long transport time and expensive loading and unloading services, he said, adding that the connectivity between transport businesses is limited and the information sbout the market demand is insufficient.

To reduce logistics costs, the Ministry of Transport said it is necessary to invest in building a national expressway network to ensure effective connectivity to industrial parks, key economic centres, border gates, seaports, railway stations, and inland water ports.

The railway sector needs to build goods transportation stations and upgrade loading and unloading facilities and warehouses to provide common services for all transport enterprises.

Additionally, it is recommended to develop container transportation via inland waterways.

The transport ministry suggested forging transport connectivity between seaports, roads, railways and inland waterways.

Meanwhile, the aviation sector needs to develop freight services by establishing a cargo route network, encouraging investors to build regional cargo airports, and providing incentives for airlines to open routes to the cargo airports.

PM Nguyen Xuan Phuc: High logistic costs place burden on businesses


National conference seeks ways to reduce logistics costs, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news

PM Nguyen Xuan Phuc speaks at the conference held in Hanoi on April 16



High logistics costs have become a major barrier for businesses and reduced the competitiveness of the national economy, Prime Minister Nguyen Xuan Phuc said at a national conference in Hanoi on April 16 to seek ways to reduce logistic expenses and improve transport connectivity.

The asynchronous investment and poor connectivity result in high production costs, he said, adding that this is a challenge of many localities, especially those in the Mekong Delta region.

PM Phuc said over the past time, ministries and relevant agencies from central to local levels have exerted efforts to improve logistic services. However, the expenses for logistic services remain high, leading to weak economic competitiveness, he added.

“We should find the best solutions to reducing logistic costs for businesses,” the PM said, stressing the need to work out effective measures to improve transport connectivity among ports, railway stations and airports.

The government leader tasked the Ministry of Transport and the Ministry of Industry and Trade to finalise legal policies on logistic services, improve infrastructure and competitive edge for logistic firms, develop markets for logistic services, and increase quality of logistic human resources.

The PM also requested the Ministry of Transport to address matters relating to technology and international relations to develop deep seaports and inland container depots (ICDs) and improve transportation via railways and inland waterways.

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 percent. 

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

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

National conference seeks ways to reduce logistics costs, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
 
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