The State should develop solutions to reduce high logistics costs in trading agricultural products to improve the competitiveness of Vietnamese farm produce on the market, according to experts.

The transportation cost has accounted for 61% of total logistics cost for fruit
and vegetable products. (Photo: kinhtedothi.vn) 

The logistics costs have accounted for 12.2% of seafood product value, 19.8% of rice product value and 29.5% of fruit and vegetable value, Nguyen Duy Minh, vice chairman and general secretary of the Vietnam Logistics Business Association (VLA), said.

Especially, Minh said the transportation cost has accounted for 61% of total logistics cost for fruit and vegetable products, followed by handling costs with nearly 20% of the logistics costs.

At an online conference on the logistics costs in the value chain of Vietnamese agricultural products held recently in Hanoi, the experts said that the factors behind the high logistics cost included high transportation cost, high fees and charges of foreign shipping companies and restrictions on ports and infrastructure.

Besides that, new rates of infrastructure fees set by localities and the implementation of special inspection or quarantine quality inspection were also reasons for the high logistics costs, they said.

Le Van Quang, Chairman of the Minh Phu Group Joint Stock Company, said that the transportation cost of a shrimp container was only VND41 million from Vietnam to the US and VND16 million from Vietnam to Japan but this cost was VND80 million from HCM City to Hanoi.

Similarly, the transportation cost for a shrimp container from HCM City to a border gate with China in the northern region was VND100 million, while a shrimp container shipped from Ecuador to China was just half, even though the distance between Ecuador and China is far greater than from Vietnam.

Quang said that the cause of this was too many toll stations on land. Therefore, the State needs to have solutions to cut domestic transportation costs.

Tran Thanh Hai, Deputy Director of the Import and Export Department under the Ministry of Industry and Trade, said that value of agricultural products is low while transportation costs are high. Besides that, agricultural products need cold storage and professional transport vehicles. These two factors have also put great pressure on logistics activities for agricultural products.

He said the high logistics cost has caused weak transportation infrastructure and uneven distribution of ports. The central region has low demand for transporting goods but has many ports while the Mekong Delta region has high demand for goods transport but lacks ports.

In addition, there are many problems in the connection between transport vehicles and logistics centres and between seaports.

To solve those problems, Hai said an important solution is investment in developing large agricultural logistics centres to ensure the quality of farm produce in storage.

Besides that, the State needs to put more investment in improving transport infrastructure on waterways, including ports, because transportation is cheap, he said.

Minh said the State should plan regional logistics centres to create favourable conditions for production and trading of farming products. Technology also has an important role in traceability, monitoring the quality of goods and connecting transport companies online.

Director of the Department of Agricultural Product Processing and Market Development Nguyen Quoc Toan said the planning of developing logistics centres according to regions would promote linkages between localities.