Logistics cost of Vietnamese agricultural products

Currently, Vietnamese agricultural products are facing fierce competition in the international market, especially price competition. One of the reasons for the price tagging of Vietnamese Agricultural products is logistics costs. According to statistics from the Ministry of Agriculture and Rural Development, logistics in the agricultural value chain accounts for 20-25% of the total cost, which is slightly higher compared to the average of 10-15% of countries in the region.

While in many other countries, the process of transporting agricultural products is flexible using both railway and waterway, Vietnam mainly uses the road. Therefore, Vietnam needs to invest more in infrastructure to reduce costs as well as diversify modes of transportation. Besides that, in Vietnam, the amount of trucks under 5 tons is 80%, which is four times higher than that in the countries having low logistics costs and efficient operations.

Therefore, it can be seen that even in road transportation, Vietnamese logistics is ineffective. Many experts believe that, due to the seasonal nature, farmers or businesses do not dare to invest heavily in fleets of vehicles and warehouses.