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Western agricultural products are burdened with logistics costs

The West imports and exports tens of millions of tons of goods every year, but lacks key logistics centers and satellite systems, causing transportation costs to increase by 10-20%.

This information was given at the Forum on Perfecting the Logistics Service Chain for Agricultural Products in the Mekong Delta, held in Can Tho on May 26.

Speaking at the forum, Mr. Pham Tan Cong, Chairman of the Vietnam Confederation of Trade and Industry (VCCI), said that the Mekong Delta contributes 50% of rice production, 95% of rice exports, and nearly 65 % of aquaculture production, 60% of exported fish and nearly 70% of the country’s fruits…

Harvesting rice in Hau Giang.  Photo: Mr. Lam

Harvesting rice in Hau Giang. Image: Mr. Lam

This land needs to transport import and export goods of about 18 million tons per year. However, the region still lacks key logistics centers and satellite systems, empty container yards as well as deep-water ports for ships transporting export containers.

“Therefore, up to 70% of these goods have to be transported to major ports in Ho Chi Minh City and Cai Mep port (Ba Ria Vung Tau), which makes transportation costs for businesses 10-20% higher, depending on each trip, greatly affecting competitiveness,” said Mr. Cong.

According to the Forum Organizing Committee, the Mekong Delta currently has 1,461 logistics service providers, accounting for just over 4% of the units operating in this field across the country. However, most logistics services in the West only stop at each individual activity, lack professionalism, do not have a close connection between modes of transport, so it often causes delays, development costs. high birth.

Logistics costs are at the highest level and account for 30% of product prices, making agricultural products of the Mekong Delta less competitive compared to agricultural products in the region and China…

Mr. Hoang Hong Giang – Deputy Director of the Maritime Administration (Ministry of Transport) said that the West has 12 seaports but only reaches about 50% of capacity. Specifically, according to the plan, in 2020, the throughput of goods in the Mekong Delta is 45-50 million tons with about 500,000 containers per year. However, the reality is much lower. In 2019 it will reach 21 million tons, in 2020 it will be 22.9 million tons, in 2021 the number of goods will decrease to 21 million tons (due to the impact of the Covid-19 epidemic).

Mr. Giang pointed out that the weakness of the West is that the seaport infrastructure is scattered, small-scale, especially in-river ports, which have not met the demand for medium and long-distance shipping, and the exploitation efficiency is not high. Small-scale road infrastructure, limited road supply, so road transport is not efficient in terms of time and cost; lack of logistics centers…

From the above analysis, experts and managers say that, although the Mekong Delta is a big center in agricultural production of the country, the logistics service chain for agricultural products is a bottleneck. hindering the economic growth of the region, it is necessary to have timely solutions to remove them.

Mr. Nguyen Phuong Lam – Director of VCCI Can Tho said that the Mekong Delta is receiving special attention. It is expected that in the next 3-5 years, there will be a smooth highway from Ho Chi Minh City to Can Tho, then Ca Mau, Chau Doc (An Giang). Dinh An channel will be dredged; A regional center for production, processing and consumption of agricultural products is established. It will be a “golden opportunity” for this land, especially for the breakthrough logistics and port industry.

Loading and unloading rice at My Thoi port on Hau river, An Giang province.  Photo: Kowloon

Loading and unloading rice at My Thoi port on Hau river, An Giang province. Image: Kowloon

Concerned about this issue, Mr. Pham Tien Hoai, Chairman of Hau Giang Business Association, said that in order for Western agricultural products to compete with other countries in the region and reach the world, it is imperative to form Logistics centers specialize in agricultural products and pepper, reducing logistics costs from 30% to 15% of product costs.

“At these centers, there will be all services to serve and support agricultural products from purchasing to sorting, washing, packaging, irradiation, sterilization, cold storage to export clearance. Hoai said that in order to develop these centers, there should be special support policies from local authorities and the government for four households: farmers, manufacturers, importers and exporters. investment.

At the forum, Mr. Nguyen Thanh Phong, Deputy Head of the Central Economic Commission, said that it is necessary to use, invest effectively and develop transport infrastructure; focus on developing high-quality human resources such as transportation and logistics services to meet domestic and international needs. At the same time, continue to improve legal policies on logistics and transportation services…

Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), in order to develop logistics in the Mekong Delta, it is necessary to take advantage of the source of agricultural products and strengthen regional linkages. Facilitating trade in agricultural products is an urgent issue to help the region’s economy develop faster with its inherent advantages.

In which, focusing on improving the quality of planning, focusing on logistics planning for the whole region, especially investment activities of projects, promoting investment in construction of regional transport infrastructure and improving the quality of goods and services. creating and upgrading main shipping channels in the region…


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