High logistic costs hinder Delta agriculture exports

Dong Van Thanh, chairman of Hau Giang Province People’s Committee, said the Mekong Delta exports millions of tonnes of agriculture products every year but the region is facing many logistical choke-points.

The region is lacking key logistics hubs and storage areas for empty containers and products at ports. Goods have to be transported through many areas before reaching HCM City for export, which increases the cost.

Ngo Tuong Vy, deputy director of Chanh Thu Fruit Export and Import Co. Ltd in Ben Tre Province, said that the cost of air transport of fresh fruits to the US and European markets have increased greatly over the years.

For example, the cost for air shipping fresh fruits to the US used to be around US$3.5 per kilo a few years ago, but now has risen to $6 per kilo.

This is affecting their competitiveness overseas and reducing the amount of fruit shipped there.

However, since preservation technology for many fruit products is not good enough, they have to rely on air transport.

The cost of ocean transport of fruit is 15 times cheaper than air, so better preservation technology to maintain quality on longer container trips is important, she said.

Pham Tien Hoai, general director of Hanh Nguyen Logistics, said that the logistics costs of Vietnam’s agricultural products are high, usually accounting for around 30 per cent of their final prices, so they struggle to compete with goods from other suppliers such as China, Thailand and Indonesia.

Vo Thanh Phong, general director of Hau Giang Maritime Service Co.Ltd , said the Government needs to continue its effort to improve and enlarge waterways in the Mekong Delta so that large vessels can easily travel through different regions, reducing transport time and costs.

Le Tien Chau, provincial party secretary of Hau Giang, said that for 2021 – 2026 the province will invest around VND18 trillion ($777.99 million) to improve traffic infrastructure and region connectivity.

Every year the Mekong Delta accounts for 90 per cent of the country’s rice exports, and 70 per cent of fruit exports.

Source: VietnamNews 

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