Vietnamese logistics companies need to improve their competitiveness to stay afloat when the EU-Vietnam Free Trade Agreement (EVFTA) comes into effect, according to experts.
Trade between Vietnam and the EU would increase strongly thanks to the EVFTA, boosting logistics demand, they said.
The deal, currently under ratification, has a number of commitments in the logistics sector that exceed those under the WTO.
When it comes into effect, it would open the door wide to EU logistics service providers, who are highly competitive, to enter Vietnam.
This would create competitive pressure but also bring capital, new technologies and opportunities for co-operation.
Logistics costs in Vietnam account for 21-25 percent of the country’s annual GDP, 12 percent of the cost of fishery products, 23 percent in the case of wooden furniture, 29 percent for vegetables, and 30 percent for rice, much higher than that in Thailand, Malaysia or Singapore.
Besides, the country's logistics infrastructure falls short of requirements, affecting the distribution of goods, and thus the competitiveness of Vietnamese goods.
Therefore, the EU trade deal would be a challenge to the logistics industry but could push it into reforming and improving its competitiveness./.VNA