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High logistics service fees makes Vietnamese enterprises uncompetitive
Weaknesses in the supply chain and logistics infrastructure leads to the high expenses of logistics services and high production costs, which then lead to low competitiveness of enterprises and low development of logistics services in Vietnam.
This was heard at the exhibition and conference on providing the solutions for supply chain administration and logistics held in HCM City on July 29.
Experts said the transport and communication is the important infrastructure which plays a very important role in developing logistics services. Meanwhile, the transport system in Vietnam remains weak, regardless of whether it is overland, railway, airway, waterway or seaway. This leads to the high logistics fees, thus affecting the development and the effectiveness of logistics fees in Vietnam.
Narin Phol from Damco, one of the logistics service providers in Vietnam, said the spending of logistics services in Vietnam is overly high, thus making the services less competitive in the region. He said the expenses of logistics services in Vietnam are even higher than Thailand, China, Malaysia and Indonesia.
Michael de Jong-Douglas from Mapletre Logistics agreed, saying that Vietnam’s logistics market is only better than Laos and Cambodia in the region
Besides, there exist many other problems. The bad traffic jams, long time needed to carry goods by land and high transportation fees all make logistics expenditure in Vietnam higher than in other countries, thus putting a heavy burden on enterprises.
According to Narin Phol, in developed countries, logistics expenditures are very low. In the US, for example, the logistics expenditure is equal to 7.7 percent of GDP, while the figure is 8 percent in Singapore, 11 percent in Japan, 13 percent in Indonesia and Malaysia, 18 percent in China. Meanwhile, the figure is very high in Vietnam at 25 percent of GDP.
According to experts, the high exports and imports show the high economic growth rate of Vietnam’s economy. Besides, Vietnam has become a big retail market. Therefore, it is an urgent matter to develop infrastructure, supply chain and logistics services.
According to Michael de Jong-Douglas, Vietnam may become the potential investment point for foreign logistics service providers. Many experts have suggested that Vietnam should prioritize logistics development in its plan to develop the national economy.
The World Bank in January released a report concerning Logistics Performance Indicators (LPI) of 155 economies, revealing that Vietnam ranked 53 again. The results indicate that Vietnam has not made any progress in the last few years.
There are 800 to 900 enterprises that provide logistics services, but most are newly established and thus remain weak financially and in capability. These companies hold 25 percent of the logistics market share, while the remainder is covered by foreign firms.
vietnamnet, tbktsg
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