Deputy Prime Minister: Comparing transportation from North to South is twice as expensive as going to the US, it is difficult to be accurate

Logistics costs are still quite high, but the comparison of North-South shipping being twice as expensive as going to the US is difficult to be accurate, according to Deputy Prime Minister Le Minh Khai.

Deputy Prime Minister Le Minh Khai at the National Assembly meeting

Sending a question to the Government, National Assembly delegate Dinh Ngoc Minh said Vietnam's logistics costs are currently too large (accounting for about 60%). A container of goods from North to South costs about 2,000 USD, while moving a container of goods from Vietnam to the US costs only 1,000 USD.

He asked the question: What solutions does the Government have to reduce logistics costs for businesses? Currently, the experience of developed countries is to build freight railways combined with passenger transport to make a profit. Accordingly, he proposed that the Government report to the National Assembly to soon deploy two railway sections (Lach Huyen - Yen Vien - Lao Cai and Vung Tau - Dong Nai) in the form of public investment.

In response to this proposal, Deputy Prime Minister Le Minh Khai said that Vietnam's logistics costs are currently equivalent to 16.8-17% of GDP, still quite high compared to the world average of 10.6%. However, this level is basically close to the Government's goal of reducing logistics costs by 16-20% by 2025.

Regarding the costs mentioned by the delegates, the Deputy Prime Minister said that according to investigation data, the shipping fee for a 20-foot container from North to South costs 2,000 USD, corresponding to the method of transport by road.

However, depending on the product and the shipper's needs in terms of time and shipping conditions, businesses can choose other modes of transportation such as rail or sea with a cost equivalent to only 50-70%. of roads (depending on loading and unloading conditions).

For example, sea freight rates from Hai Phong - Ho Chi Minh City are fluctuating at 9.2-9.5 million VND for a 20-foot container and about 12 million VND for a 40-foot container. In the opposite direction, from Ho Chi Minh City - Hai Phong, the freight rate is about 6-8 million VND for a 20-foot container and 9-10 million VND for a 40-foot container.

For international maritime transport, the determination of freight rates depends on the season and shipping conditions. Currently, the sea freight price for a 40-foot container to the US is about 2,000-2,500 USD. During the epidemic period, this fee can be up to 20,000 USD.

"Comparing transportation costs between different routes and modes of transportation is very difficult to accurately convert to the same level," said the Deputy Prime Minister.

However, he affirmed that in the future, the Government will continue to find ways to reduce logistics costs. In particular, focusing on developing transport infrastructure, logistics centers, dry ports; Adjust policies related to prices and transportation fees; decentralize and empower localities in investing and exploiting infrastructure.

Regarding the two railway lines connecting the sea, the Deputy Prime Minister said that the Bien Hoa - Vung Tau railway line is being prepared for a pre-feasibility study report. This route has a length of about 128 km, double track, 1,435 mm gauge, total investment of about 6.2 billion USD.

The Lao Cai - Hanoi - Hai Phong route has basically completed the detailed planning, with a length of about 380 km, double track, 1,435mm gauge, total investment of 10-11 billion USD.

Because the total investment in the two railway lines is relatively large, the Prime Minister has included the National List of projects calling for foreign investment in the 2021-2025 period to mobilize investment resources. It is expected that both projects will complete pre-feasibility study reports before 2025.

In addition, two seaport areas, Lach Huyen and Cai Mep - Thi Vai, have been invested and are being connected by roads (highways, national highways) and inland waterways. The amount of goods passing through Cai Mep - Thi Vai port reached over 80%, meeting the transportation needs of the two seaports at a reasonable cost.

In the long term, the Deputy Prime Minister said, reducing the market share of road transport connecting to seaports is one of the important solutions contributing to reducing logistics costs, including two railway lines connecting Lao Cai seaport. - Hanoi - Hai Phong (connecting Lach Huyen port) and Bien Hoa - Vung Tau (connecting Cai Mep - Thi Vai wharf) need to be invested soon and start construction before 2030.

Source: Vnexpress