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WB: Vietnam's logistics costs are double that of other countries

Date 14-09-2020 Views 344

Vietnam's logistics costs account for 18-20% of GDP, nearly double that of countries with developed economies, according to a World Bank (WB) report.

This situation was stated by Mr. Ousmane Dione - Country Director of the World Bank in Vietnam at the Vietnam Logistics Forum 2017, on December 15.

Referring to import and export activities, transporting goods, the World Bank Country Director in Vietnam assessed that Vietnam is emerging as a global industrial production hub, attracting about 35 billion USD of registered capital. in 2017; the ratio of trade turnover to GDP reached more than 170% and export growth averaged 15%, 5 times higher than global trade growth. However, Vietnam is also among the countries with expensive transportation charges compared to the region and the world.

"The cost of logistics transportation as a share of GDP is about 18-20%, nearly double that of developed economies and 4% higher than the global average," said Mr. Ousmane Dione.

Along with that, the quantity does not match the quality when Vietnam is still just around implementing low value production in the global value chain, 70% of the total export value is in the hands of enterprises with capital. Foreign investment.

 

High costs, underutilized infrastructure are the weaknesses pointed out by experts in the flow of logistics development in Vietnam. This is partly reflected in the logistics capacity index (LPI), which has decreased by nearly 16 places in 2 years, from 48th place in 2014 to 64th in 2016.

"This decline shows that Vietnam's logistics development gap is widening compared to other countries. While other economies have accelerated growth, Vietnam slows down, which means you are losing your advantage. competition, "Mr. Ousmane Dione assessed.

According to statistics of the Vietnam Association of Logistics Service Enterprises (VLA), there are currently about 3,000 Vietnamese enterprises operating in this field, of which half are small and medium enterprises, so the contribution to the economy only about 2-3%.

Worth mentioning, nearly 70% of Vietnam's logistics enterprises are not assets; the investment in equipment and means of transport is only about 16% and about 4% will be for warehouses and ports, the rest must be outsourced; providing monotonous services, low quality, little added value ... Therefore, only 25% of the market share is in the hands of Vietnamese businesses, the remaining 75% is in the hands of water enterprises. out.

This is also a prominent weakness in Vietnam's logistics industry mentioned by the Minister of Industry and Trade Tran Tuan Anh at the forum. According to him, the industry's limitations lasted for many years when the planning work has not been resolved, and there is still no close connection between relevant branches.

"We need to have new determination and new measures to improve the competitiveness for Vietnam's logistics enterprises to overcome difficulties and challenges together to promote the development of Vietnam's logistics industry to a high level. new in the region and in the world ", Minister Tuan Anh said.

Commenting, World Bank Country Director proposed 4 solutions to promote Vietnam's logistics development. First, increase connectivity. When connectivity becomes effective, the link between production and world markets will be strengthened. From there, it will reduce trade costs and increase stability for domestic enterprises in order fulfillment.

"The shift to over-reliance on public investment, obviously beyond funding, inefficiency and therefore unsustainable. The shift to private sector funding and clear priorities Clearly for essential investment is the key to a better connection ", the WB expert said.

Second, there is a need to simplify customs procedures and specialized management regulations that have a lot of regulations to comply, which are estimated to take up to 76% of the time required to import, to meet regulatory requirements. procedures at the front and at the border. Customs sector reform alone will not have a significant effect on trade facilitation.

Third, there must be interdisciplinary coordination and cooperation with businesses. Finally, collecting and maintaining logistics data and trade facilitation efficiency are critical to implementing the appropriate reforms and operations. Having accurate logistics and transport statistics will pave the way for more accurate policy development, while Vietnam's first challenge is that there is no initial database of transport operations. and logistics.

"We are also ready to provide comprehensive research results, technical assistance combined with financial support over a period of years if needed," said the World Bank Country Director.

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