Logistics sector delivers strong growth

Do Xuan Quang, its chairman, told a conference held at the Viet Nam-Singapore Business Forum in HCM City last week: "2013 is predicted to be another tough year for the whole economy, so the logistics sector will suffer too."

But he remained optimistic that the sector could sustain the 10-15 per cent growth of recent years thanks to the growth in trade-related activities.

"Exports are expected to increase by 10 per cent this year to US$125 billion, so the demand for transportation and logistics will also rise," he said.

But the industry laboured under many shortcomings, which have for years prevented it from keeping pace with counterparts in neighbouring countries, he said.

The infrastructure for logistics was insufficient and not well located due to poor planning.

For instance, in some places there were many ports but they were not near logistics centres, meaning goods have to be transported long distances to them, he said.

Vo Hung Dung, director of the Viet Nam Chamber of Commerce and Industry Can Tho, elaborated on this, saying the Cuu Long (Mekong) Delta had many ports but goods from there were transported by road to HCM City and then shipped abroad because of a shortage of logistics facilities.

This made Vietnamese exports less competitive due to higher costs, he added.

The conference heard that logistics costs accounted for 25 per cent of gross domestic product in Viet Nam, much higher than in regional countries.

Backward technologies and poor human resources were other weaknesses, delegates said.

To solve the problem, experts suggested closer co-operation between exporters and logistic companies, saying this would help cut costs, reduce risks and save time.