VN Government determines to reduce logistics costs currently making up one fifth of GDP

The Government will convene a conference next week to seek ways to reduce logistics costs that reached US$46 billion in 2017, accounting for nearly 21% of the GDP.

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 needs more solutions to reduce logistics costs.

Pundits expressed belief that the development outlook of Viet Nam’s logistics sector remains vast, especially after the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) officially comes into force.

At present, several sea ports in Viet Nam can accommodate vessels up to 100,000dwt while there are 70 international air routes.

Pundits, however, pointed out that businesses have to use high-price services while the quality of some services provided by local logistics companies still remain low.

[Source: 16th April 2018]