Gov't urges further cut of unnecessary procedures in favor of logistics development

Deputy Prime Minister Trinh Dinh Dung addresses the Viet Nam Logistics Forum 2020, Ha Noi, November 26, 2020. Photo: VGP

Dung made the point on Thursday at the Viet Nam Logistics Forum 2020 which drew the participation of more than 500 businesses.

He said logistics industry plays an important role in national economic structure by supporting, connecting and promoting socio-economic development and raising competitiveness.

The sector expanded at a relatively high pace of 12-14% annually. The rate of outsourcing, which refers to the practice of hiring other companies to conduct logistics, accounted for 60-70%, contributing to 4-5% of GDP.

The country ranked 39th out of 160 countries and territories in the World Bank’s Logistics Performance Index (LPI) and 3rd among ASEAN member states.

However, there remains shortcomings, including relatively high logistics costs, lack of connectivity among different sectors and fields, poor infrastructure, as well as low competitiveness of logistics providers, which have not only affected the competitiveness of goods and also posed obstacles for improving the competitiveness of the whole economy.

The average logistics costs are equivalent to some 16-17% of the nation's gross domestic product (GDP), according to the Viet Nam Logistics Association (VLA).

Among logistics costs, transport costs make up the highest proportion, at 60%-80%, followed by costs for loading and unloading and customs clearance procedures.

Against the backdrop, Deputy PM Dung underlined the necessity to develop a healthy logistics market in which businesses of all economic sectors could have equal opportunities.

The Government set goals to raise the growth rate of the sector to 15-20% annually and its GDP share to 8-10%, according to Dung./.

By Kim Loan