Vietnam determined to reduce logistics costs

09:01 | 17/04/2018 Economy- Society

Prime Minister Nguyen Xuan Phuc has urged the ministries and agencies concerned to take bold actions in order to cut the logistics costs to as low as 16 percent of gross domestic product by 2025.

PM Nguyen Xuan Phuc at the conference on Vietnam's logistics sector

The Vietnamese PM made the request while attending a conference on April 16 where he said the Government will issue a directive on the development of Vietnam’s logistics sector.

He said improvements have been made but the cost of logistics services in Vietnam remains prohibitive, making the economy less competitive than its regional peers.

According to a World Bank estimate, Vietnam’s logistics costs currently account for 20.9 percent of GDP, higher than China’s 19 percent, Thailand’s 18 percent, Japan’s 11 percent, and the EU’s 10 percent .

The Government leader stated that high logistics costs are one of the hurdles facing the competitiveness of the economy, quoting Benjamin Franklin’s saying that little expenses are like a small leak that can sink a great ship.

PM Phuc said that by 2025 the costs of logistics must be cut to 16-20 percent of GDP while its contribution to GDP should be raised to 8-10 percent, to place Vietnam among the top 50 economies in the Logistics Performance Index.

Pledging to create equal opportunities for all economic sectors in developing the logistics market, the Government leader expects Vietnam to be an important regional logistics center by tapping into the country’s strategic location.

He said that efforts to lower logistics costs need adequate attention, in addition to efforts to reform administrative procedures and enhance the business climate, as Vietnam is intensifying its international integration and participation in major free trade agreements.

Theo NDO