High logistics costs reduce competitiveness of Vietnamese goods

May 07, 2020 - 22:51

Inflated logistics costs are hampering the competitiveness of Vietnamese goods.

Goods are loaded at Hải Phòng Port. — VNA/VNS Photo An Đăng

HÀ NỘI — Inflated logistics costs were hampering the competitiveness of Vietnamese goods, according to Chairman of the Việt Nam Textile and Apparel Association (VITAS) Vũ Đức Giang.

Việt Nam's logistics costs were 6 per cent higher than Thailand, 7 per cent higher than China, and 12 per cent more than o Malaysia, Giang said.

This had reduced the competitiveness of domestic textile products compared to other countries in the region, even though Việt Nam was considered a low labour cost country, he told the Kinh Tế and Đô Thị (Economy and Urban Affairs) newspaper.

"High logistics costs not only affect the competitiveness of goods, but also pose an obstacle for businesses when entering new markets,” Giang noted.

A report by the World Bank (WB) showed that logistics costs in Việt Nam made up for 20 per cent of the country’s GDP, while other countries ranged from 9 to 14 per cent.

Economists said that if the Government wanted to improve the quality of logistics services it needed to have a clear roadmap.

Deputy Director of Hateco Logistics JSC Nguyễn Văn Đức recommended the Ministry of Industry and Trade, provinces and cities should pay attention to human resource, infrastructure and policy institutions.

They also need to promote links with foreign investors in logistics to provide businesses with management software and processes, Đức added.

Deputy General Secretary of the Việt Nam Logistics Business Association (VLA) Nguyễn Tương said the State should prioritise developing infrastructure and logistics service centres, while offering preferential income and equipment tax rates.

Policies were needed to cut business conditions, simplify inspection procedures and mobilise social resources to invest in logistics, especially regional and international logistics centres, Tương said.

In addition, to reduce unnecessary costs for export firms, management agencies needed to complete a logistics development mechanism. Enterprises must cut costs and improve competitiveness, he said.

Localities and authorities must focus on transport infrastructure to connect logistics centres in the process of implementing the Law on Planning, Tương added. — VNS