Logistics costs are becoming an increasing challenge for Vietnam’s agricultural exports, Vietnamnet is reporting. The publication claims that 60 percent of logistics costs are transport-related and compares this to 30 percent ‘in other countries’ (no source provided).
One of the key gripes in this article is that foreign transport firms, specifically airlines and shipping companies, can increase their prices and local firms are powerless to do anything about it.
This matters because agriculture is huge in Vietnam employing about 13.8 million Vietnamese or a third of the working age population. It is also dominated by local firms. With this in mind, the many free trade agreements Vietnam have been sold to the Vietnamese public as a means to open up foreign markets to Vietnamese produce.
If those benefits cannot be realised due to logistics costs, as they are defined in this article, this could potentially be a problem.