VIETNAM wants to cut logistics cost to improve its goods competitiveness, says Deputy Prime Minister Trinh Dinh Dung, reports London's Retail News.

Speaking at the Vietnam Logistics Forum, he said the cost for logistics remains high, leading to higher product costs and lower competitive advantages for Vietnamese goods and its economy.

Heightened costs stem from reliance on land-based transport and inefficient delivery systems. Take the Hai Phong-Bac Ninh waterway for example, said Mr Dung.

Dao Trong Khoa, vice president of the Vietnam Logistics Business Association. said the waterway allows 120-TEU ships to cover the distance in eight to 11 hours - three times longer by road, but at 20 per cent lower cost.

Mr Dung said the goal is to double logistics services' share of GDP to eight-10 per cent and total logistics costs to 16-20 per cent of GDP. To achieve the targets, unnecessary procedures need to be eliminated, he said.

Mr Khoa said it is necessary to promote the use of digital transformation in logistics via integrating blockchain and artificial intelligence technologies to existing digital platforms for transport and port and warehouse management.

He underlined the importance of developing international rail links and waterways in the northern Red River Delta and southern Mekong River Delta. These would help reduce costs for logistics service providers, manufacturers and import-export companies.

The cost of logistics services in Vietnam in early 2019 accounted for 25 per cent of the country's GDP, while the rate was just 9.5 per cent in the US, 11 per cent in Japan, 16 per cent in South Korea, and 21.6 per cent in China, according to the Vietnam Chamber of Commerce and Industry.

According to the Vietnam Logistics Business Association's latest survey, there are around 30,000 logistics companies in the country, including 4,000 international ones.

The industry has been growing at 12-14 per cent annually and is now worth $40-42 billion.