Vietnam hindered by weak logistics
PM Nguyen Xuan Phuc has asked the Ministry of Transport to investigate the high transportation fees which are affecting local import-export companies.
Vietnam's import-export revenue reached USD400bn in mid-December, a fourfold increase in ten years and a milestone for the economy. However, logistic remains Vietnam's weak point. The port system, road network and transportation services are still bad and can't take advantage of Vietnam's long coastline.
Ousmane Dione, Country Director for the World Bank in Vietnam, said the logistic cost in Vietnam accounted for 18% of the GDP while it was only 9% in developed countries. The average rate in the world was 14%.
Dione said Vietnam still needs to work hard to improve the infrastructure and logistics performance. Its World Bank's Logistics Performance Index ranking dropped from 48 in 2014 to 64 in 2016. This shows that other economies are improving at a fast speed and Vietnam is losing its advantages.
The huge cost of port infrastructure charges, warehouses and transport carrier rental fees is putting huge pressure on the local firms.
The local logistics companies are only able to do simple jobs.
High transportation fees is affecting import-export companies in Vietnam
Vietnam's import-export revenue reached USD400bn in mid-December, a fourfold increase in ten years and a milestone for the economy. However, logistic remains Vietnam's weak point. The port system, road network and transportation services are still bad and can't take advantage of Vietnam's long coastline.
Ousmane Dione, Country Director for the World Bank in Vietnam, said the logistic cost in Vietnam accounted for 18% of the GDP while it was only 9% in developed countries. The average rate in the world was 14%.
Dione said Vietnam still needs to work hard to improve the infrastructure and logistics performance. Its World Bank's Logistics Performance Index ranking dropped from 48 in 2014 to 64 in 2016. This shows that other economies are improving at a fast speed and Vietnam is losing its advantages.
The huge cost of port infrastructure charges, warehouses and transport carrier rental fees is putting huge pressure on the local firms.
The local logistics companies are only able to do simple jobs.
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