Logistics cost reduction

Friday, april 20, 2018 14:59

(QNO) - An online national conference on logistics was chaired by Prime Minister Nguyen Xuan Phuc on April 16. The event focused on the solutions to cost reduction and effective connection of transport infrastructure system. Chairman of the Quang Nam provincial People's Committee Dinh Van Thu and the leaders of related departments and services attended the conference.

The scene of the conference in Quang Nam
The scene of the conference in Quang Nam

According to the World Bank (WB), Vietnam stood at 64 out of 160 countries of logistics service effect in 2016. Its annual growth rate is about 14-16%. Logistics is regarded to grow steadily. Logistics cost of Vietnam currently ranks 4th among the ASEAN countries. The logistics associated with transportation accounts for about 59-60%. Vietnam is supposed to have enormous potential for logistics development, especially when the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) becomes effective.

The reasons for the increase in logistics costs analyzed at the conference include the non-overall transportation infrastructure; lack of the connection between roads, railways, sea routes, and airways; unsuitable and unprofessional transport operation; outdated transport means; complicated administrative procedures and high fees.

Prime Minister Nguyen Xuan Phuc at the conference
Prime Minister Nguyen Xuan Phuc at the conference

According to Prime Minister Nguyen Xuan Phuc, logistics plays an important role in the economy of Vietnam. It is also one of the 12 prior sectors to receive the ASEAN’s development support. Therefore, besides administrative reform and investment climate improvement, it is necessary to cut down logistics costs in order to step up international integration and take part in the world trade agreements.
The objectives of Vietnam logistics are that it accounts for 8-10% of GDP; its service rate is 15% -20%; logistics costs fall to 16% -20% of GDP; the national logistics performance index (LPI) ranks 50th or higher by 2025.

Prime Minister Nguyen Xuan Phuc also asked the Ministry of Transport, the Ministry of Industry and Trade and the others in cooperation with localities, logistics and transport enterprises to focus on developing Vietnam logistics on the regional and international level.
 

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