Vietnam aims to cut logistics costs to 15% of GDP next year

Vietnam needs to lower its logistics costs to 15% of GDP next year from the current 18% to enhance the competitiveness of domestic products and businesses, says Prime Minister Pham Minh Chinh.

This target is one of three major goals Chinh outlined for the logistics sector during his speech at the Vietnam Logistics Forum 2024 on Monday.

He emphasized the target of increasing the sector’s share in Vietnam’s GDP from the current 10% to 15-20% and raising its portion in the global logistics industry from 0.4% to 0.5-0.6% in the near future.

Additionally, the Prime Minister wanted the annual growth rate of the logistics sector to rise from its current 14-15% to 20%.

To achieve these goals, Chinh outlined seven key solutions for local logistics development, aiming to support the double-digit economic growth target.

First, it is crucial to increase awareness of the logistics industry's strategic importance and Vietnam’s central role in the Asia-Pacific region. This will help capitalize on opportunities and enhance the sector’s competitiveness in the global value chain.

Second, the institutional system needs to be refined with an open and forward-looking approach to unlock the sector’s potential fully, Chinh stressed.

Third, he highlighted the importance of developing a modern and efficient logistics infrastructure to reduce costs and improve product competitiveness. Special attention should be given to advancing the aviation, maritime, and high-speed rail industries.

Fourth, it is essential to develop smart governance systems and invest in training a highly skilled logistics workforce.

Fifth, efforts should focus on modernizing the domestic logistics industry while fostering international integration and strengthening logistics diplomacy, the government chief added.

Sixth, the PM emphasized positioning the country as a hub for free trade, safeguarding its independence, sovereignty, unity, and territorial integrity, and maintaining a peaceful and cooperative environment to enable sustainable development.

Last, it is necessary to enhance connectivity across transportation modes, including air, sea, rail, road, and inland waterways, and connect to international transport networks and global free trade zones.

Vietnam’s logistics infrastructure has been steadily improving. The country now boasts over 2,000 kilometers of expressways, 298 ports, and 69 logistics centers. In 2023, 7,919 logistics firms were established.

Vietnam also ranks first among ASEAN nations in the number of companies licensed for sea transport from/to the U.S. Additionally, the country’s logistics efficiency was ranked 43rd out of 139 countries and territories by the World Bank last year. Overall, Vietnam’s logistics sector is now one of the top five markets in ASEAN.