11:03 | 10/01/2017 Local Economy
Logistics is a crucial factor in the development of the Mekong Delta, Deputy Prime Minister Vuong Dinh Hue told a conference on January 9 in the southern city of Can Tho.
It was one of a series of conferences on a wide range of themes such as infrastructure development, climate change response and agricultural chains held in the past seven months aimed at developing the region.
The deputy PM said the region possessed great potential for logistics development with an extensive network of waterways, but that currently up to 70% of goods for export must be transported to Ho Chi Minh by road, causing costs to soar.
The strong growth of air passenger and freight transport in recent years was also an opportunity for air logistics, added Deputy PM Hue.
The Ministry of Industry and Transport has projected that freight handled in the Mekong Delta could reach between 25-28 million tonnes a year by 2020 and 66.5-71.5 million tonnes by 2030. Such figures indicate that the region has huge demand for logistics development to distribute and export goods but that so far no logistics centre has been established in the region.
Vietnam currently has six logistics centres that have been put into operation, each in Hai Phong, Ho Chi Minh City and Quang Ninh Province and three in Binh Duong Province, while some are under construction or have just been licensed.
Deputy PM Hue said logistics costs accounted for 10-13% of GDP in developed countries and 15-25% in developing ones, so if such costs were cut, it would make significant contributions to enhancing the nation’s competitiveness.
Minimising logistics costs is even more meaningful to Vietnam when such costs now account for at 20-25% of GDP.
Therefore, the Deputy PM suggested reviewing all issues related to logistics, including human resources, finance and infrastructure, noting that the government must create a unified and transparent legal framework for this sector.
In August 2016 a conference was also held on mobilising resources for infrastructure and logistics development in the Mekong River Delta, after which the World Bank pledged nearly US$3 million to this effort.
The World Bank also plans to connect the Mekong Delta’s logistics development with Ho Chi Minh City to boost trade and reduce costs for enterprises.
According to experts, if logistics costs fall by 1%, the region could save more than VND2 trillion (US$88 million) each year.
Deputy Prime Minister Hue expected that after the conference, the awareness of the role of logistics would be enhanced and the region could attract new domestic and foreign investment in this sector.