Vietnam’s inflated logistics costs are putting a strain on local businesses and need to be cut in order to make firms more competitive, said Prime Minister Nguyen Xuan Phuc. The PM was speaking at a conference held by the Ministry of Industry and Trade in Hanoi on Monday. Vietnam’s logistics costs accounted for 20.9 percent of GDP in 2016, according to the World Bank, and were higher than regional peers China, Thailand and Japan. The reason for this is the cost of transporting goods via land, Phuc said. In Vietnam, transportation accounts for 59 percent of all logistics costs, said Deputy Minister of Industry and Trade Nguyen Van Cong during the conference. The cost of transporting a 40-foot container by land from Hanoi to HCMC is about VND40 million ($1,785), which is 9.7 times more than transporting it by water and 2.5 times more than moving it by train, Cong said. According to a 2016 report released by the ministry, 77.2 percent of goods are transported by land in … [Read more...] about Vietnam needs to reduce logistics costs to compete: PM
Logistics costs
Vietnam determined to cut logistics costs
Ways to reduce logistics costs in Vietnam were once again discussed at a national conference on April 16, showing the strong determination of the government to increase the competitiveness of the economy. PM Phuc showed the government's full support to reduce logistics costs The event revolving around cutting logistics costs and increasing transport connectivity attracted the participation of Prime Minister Nguyen Xuan Phuc, ministers, and hundreds of domestic and international logistics providers. The conference was broadcast live to all cities and provinces nationwide. In his opening remarks, the PM said that though ministries and agencies have been paying attention to logistics, reasonable solutions have not been taken yet to cut down logistics costs that are currently higher than in regional countries. The government leader asked ministries and businesses to focus on dealing with the challenging issues of development planning, infrastructure development, … [Read more...] about Vietnam determined to cut logistics costs
Vietnam determined to reduce logistics costs
Prime Minister Nguyen Xuan Phuc has urged the ministries and agencies concerned to take bold actions in order to cut the logistics costs to as low as 16 percent of gross domestic product by 2025. PM Nguyen Xuan Phuc at the conference on Vietnam's logistics sector The Vietnamese PM made the request while attending a conference on April 16 where he said the Government will issue a directive on the development of Vietnam’s logistics sector. He said improvements have been made but the cost of logistics services in Vietnam remains prohibitive, making the economy less competitive than its regional peers. According to a World Bank estimate, Vietnam’s logistics costs currently account for 20.9 percent of GDP, higher than China’s 19 percent, Thailand’s 18 percent, Japan’s 11 percent, and the EU’s 10 percent . The Government leader stated that high logistics costs are one of the hurdles facing the competitiveness of the economy, quoting Benjamin … [Read more...] about Vietnam determined to reduce logistics costs
PM Nguyen Xuan Phuc: High logistic costs place burden on businesses
PM Nguyen Xuan Phuc speaks at the conference held in Hanoi on April 16 (Photo: VNA) Hanoi (VNA) – 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 … [Read more...] about PM Nguyen Xuan Phuc: High logistic costs place burden on businesses
High logistic costs place burden on businesses: PM
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. PM Nguyen Xuan Phuc speaks at the conference. “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 finalize legal policies on logistic services, improve infrastructure and competitive edge for logistic firms, develop markets for logistic services, and increase … [Read more...] about High logistic costs place burden on businesses: PM
PM calls for sectors’ contribution to reduce logistics cost
According to the World Bank’s report, 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 relatively high compared to other countries in the world. Therefore, reducing logistics costs generally and transport charges particularly are urgent and meaningful in improving Vietnam’s competition ability in developing economy. One of main discussion is that improper transportation in which Vietnam has not brought into play the advantage of modes of transport. Road transport with high cost accounts for 77.20 percent of market share while cheap transport modes such as river transport or sea transport just account for 17.14 percent and 5.22 percent respectively, worse railway transport just accounts for 0.42 percent and air transport of at 0,02 percent. For instance, the road shipping costs of a 40 feet container from Hanoi to Ho Chi Minh City (excluding loading and … [Read more...] about PM calls for sectors’ contribution to reduce logistics cost
PM urges drastic reduction of logistics costs
Photo: VGP Addressing a national videoconference on logistics in Ha Noi on April 16, the Government leader highlighted the goal of increasing the share of the logistics service sector in the gross domestic product (GDP) by 8-10%, assigning an array of tasks to ministries and sectors, especially the Transport Ministry, including the building of the PM’s Directive, in order to develop Viet Nam’s logistics sector on par with the regional and world levels. PM Phuc cited the World Bank’s statistics showing that Viet Nam’s logistic costs are equivalent to nearly 21% of the GDP, with the transport costs accounting for up to 60%, in comparison to just 19% in China, 18% in Thailand, 11% in Japan, and 10% in the European Union (EU) countries. He emphasized that the cost burden is the biggest barrier to Vietnamese companies at present, with the high logistic costs affecting the competitiveness of the economy. In that spirit, the PM asked the … [Read more...] about PM urges drastic reduction of logistics costs
PM: High logistic costs place burden on businesses
PM Nguyen Xuan Phuc speaks at the conference held in Hanoi on April 16th (Photo: VNA) 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 … [Read more...] about PM: High logistic costs place burden on businesses
National conference seeks ways to reduce logistics costs
Photo for illustration (Source: baogiaothong.vn) A World Bank report showed that the expenses for logistics services accounted for 20.9% of Vietnam’s gross domestic product (GDP), of which transportation costs amount to 59%. 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 VND40 million (USD1,762), 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 optimize 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%. Meanwhile, the transportation via railways, inland waterways and sea routes has yet been upgraded with long transport … [Read more...] about National conference seeks ways to reduce logistics costs
Gov’t determines to reduce logistics costs currently making up one fifth of GDP
The Government of Viet Nam expects to lower logistics costs to 16-20% in the coming years This is one of a series of thematic conferences planned for this year by the Government in order to help it see through the biggest challenges to the country. Last year, PM Nguyen Xuan Phuc issued a decision approving an action plan on competitiveness improvement and logistics service development. Under the plan, the Government hopes to lower the logistics costs to 16%-20% of the GDP and the logistics performance index (LPI) is expected to rank at least 50th compared to the current 64th out of 160 countries. The Government sets the goal of logistics growth between 16%-20% from now until 2025, according to the plan. Viet Nam’s logistics costs/GDP rate nearly doubles the global average rate (14%), said World Bank Country Director in Viet Nam Ousmane Dione. Meanwhile, Vice Minister of Transport Nguyen Van Cong, the LPI reflects the development levels of economies, underlining that Viet Nam … [Read more...] about Gov’t determines to reduce logistics costs currently making up one fifth of GDP