Hanoi (VNA)– Vietnam will accelerate the development of logistics services to facilitatetrade and improve the economy’s competitiveness, according to an action plan whichwas approved recently by Prime Minister Nguyen Xuan Phuc.

According to theplan, the logistics sector is expected to contribute from 8-10 percent of thecountry’s GDP by 2025 with a growth rate of 15-20 percent, an outsourcing ratioof 50-60 percent, and logistics costs reduced to 16-20 percent of the GDP. Vietnamhopes to enter the top 50 countries in the logistics performance index (LPI)ranking.

To achieve thetargets, Vietnam needs to call for investment in logistics infrastructure,boosting connectivity with other countries, build regional andinternational-level logistics centres, and develop logistics enterprisescapable of competing on the international market.

The plan points outmajor measures such as perfecting policies and laws on logistics, completinglogistics infrastructure, improving capability of enterprises, developing thelogistics market and training a qualified logistics workforce.

According to theVietnam Logistics Association, the plan is important, directly affecting thedevelopment of the logistics sector in Vietnam in the context of the country’s deeperintegration into the region and the world via free trade agreements.

Vietnam’s logisticssector has made significant progress in recent years, in terms of both diversityand service quality, with an annual growth rate of 16-20 percent, ranking 64thout of 160 countries in the world and 4th in Southeast Asia.

The development of thelogistics sector has contributed to Vietnam’s export growth and bringing itsexport value from 111.2 billion USD in 2007 to 327.7 billion USD in 2015 andhelps the local retail market grow by 20-25 percent each year.

However, Vietnam’slogistics sector still faces problems.

At a logistics forumheld in November 2016, Deputy Minister of Trade and Industry Do Thang Hai saidVietnam’s logistics infrastructure remains weak because of poor connectivity betweenrailways, roads and seaports.

Goods transportationis also time-consuming, leading to high transport costs.

Reports showed thatlogistics costs currently make up 25 percent of Vietnam’s GDP, much higher thanneighbouring countries and most Vietnamese logistics enterprises are small andmedium-sized, lacking capital and facilities to operate on a big scale.

Vietnam now has1,300 enterprises, including foreign invested ones, operating in the field.Domestic firms account for just 25 percent of the market share while foreign companies,which make up only 5 percent of the total number, take the remaining 75 percent.

Additionally,Vietnam’s logistics human resources, technology and laws are far behind therest of the word.-VNA