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
Logistics costs
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
Vietnam’s logistics costs make up 20.8% of GDP
Vietnam’s logistics costs remain high, equivalent to over 20% of GDP while these costs account for between 9% and 14% of GDP in developed countries, according to the Vietnam Logistics Association.The Vietnam Logistics Forum was held on December 15 in Hanoi, under the chairmanship of Minister of Industry and Trade Tran Tuan Anh, and Vice Minister of Transport to discuss how to better connect Vietnam with global value chains. The event takes place in the context that Vietnam is expediting the Doi Moi (Renewal) process to keep abreast with the fourth industrial revolution.At the conference, delegates heard reports by the Vietnam Logistics Association, the World Bank, and Vietjet Air Cargo on an action plan for logistics sector and how to turn Vietnam into a regional air logistics hub. They were also updated with the latest situation of Vietnam’s logistics sector. While significant progress has been made in investment in hard infrastructure, there is a large agenda … [Read more...] about Vietnam’s logistics costs make up 20.8% of GDP
Vietnam Striving to Reduce Logistics Costs
Despite being rather a new sector in Vietnam, logistics has proved its importance in the country’s socio-economic development. However, the development of this potential service is facing many big challenges. Burden of costs Logistics is a process which is carried out to minimise costs for the identification of location and storages of goods sources from origins via many different activities to the final consumption places. In developed countries such as Japan and the US, logistics fees account for 10 per cent of their GDP. In Vietnam, logistics development helps ensure both time and quality for business and production activities of other services. The logistics service is very attractive, which explains why the number of businesses registered to operate in logistics is sharply increasing and particularly the service is applied in all enterprises. Nevertheless, the Vietnamese logistics industry is coping with several difficulties, including weak … [Read more...] about Vietnam Striving to Reduce Logistics Costs
VN logistics costs hurting competitiveness
The lack of close ties between logistics companies and importers and exporters has led to high tariffs, resulting in the latter's poor competitiveness, Deputy Minister of Industry and Trade Tran Tuan Anh has said.Speaking at the Vietnam Logistics Forum organised in HCM City yesterday by the Vietnam Economic Times, the Vietnam Logistics Association and his ministry, he said logistical costs amounted to around 20-25 per cent of Viet Nam's GDP in recent years, and cutting them would improve the competitiveness of the country's goods in an increasingly competitive environment.Logistics costs in developed countries range between 10 and 13 per cent.Tuan stressed the need to develop an efficient and reasonable system to connect all forms of transport by mobilising all resources, especially domestic."The legal framework and regulations for the logistics sector remain difficult and the lack of close co-ordination between relevant organisations has had a negative impact on the sector's … [Read more...] about VN logistics costs hurting competitiveness