Logistics - Lever for agricultural exports to take off

High costs, a shortage of warehousing space, and a lack of uniform infrastructure have made logistics a barrier for agricultural exports, though Vietnamese fruit and vegetables have found favour among consumers around the world.

The Mekong Delta sends 18 million tonnes of agricultural products abroad each year, accounting for more than 50% of Vietnam’s total. However, a lack of deep-water ports and warehousing has seen transport costs rise 10-40%, affecting product competitiveness.

Like Mekong Delta staples, agricultural products from the north are transported to Ho Chi Minh City for radiation before undergoing other procedures for export. High costs have made these products lose their competitive edge.

Logistics costs now account for 20-25% of product price, which is much higher than the global level of 14% and Thailand’s 10-12%. This hinders Vietnamese agricultural products from competing with foreign rivals.

Experts have said that investment should be channelled into developing logistics centres and logistics companies, with such moves helping cut costs and improve the competitiveness of Vietnamese products.

The logistics network needs to be clearly segmented, based on the topography and traffic conditions of each region, so as to ensure convenient links to production areas./.

By: VNA