Apparel and textile firms across Vietnam are rapidly losing their competitiveness owing to higher logistic cost for exporting products.
This was reported by Vietnam Textile and Apparel Association (VITAS).
VITAS, according to its statistics, mentioned that of the US $ 31 billion apparel and textile export generated in 2017, almost US $ 18 billion was spent on importing fibres, clothes and cotton among other raw materials.
The cost involved in the logistics – for garment and textile firms – was nearly US $ 2.79 billion, which is notably 9.1 per cent of Vietnam’s total export turnover.
VITAS also mentioned in its report that the logistics cost in Vietnam is much higher than most of its neighbouring nations.
It is imperative to note here that the cost of logistics in Vietnam is 6 per cent more than in Thailand and 7 per cent higher than in China. Besides, the cost is almost 12 per cent greater than what it is in Malaysia and almost 3 times higher than in Singapore.
High cost of transportation, surcharges at seaports as well as limited infrastructure of seaports have been cited as some of the major causes of companies losing competitiveness.
Phạm Thị Thúy Vân, Deputy Director Marketing, Saigon Newport Corporation, averred that the high logistic charges resulted in high transportation charges too, thereby accounting for 30 to 40 per cent of total cost of the products, compared to 15 per cent in some other nations.
If Vietnam achieves its 2018 export target of US $ 35 billion, then the logistics cost would touch US $ 3 billion, which will yet again reduce the business competitiveness significantly.
Garment companies are now investing in technologies that help in backing up bills and contracts so as to manage the warehouses effectively.
The experts have urged government to also prepare a roadmap to enhance the quality of logistic services.
