Expensive Tolls Putting Pressure On Logistics Industry

High tolls put pressure on logistics industry

The latest report of the Vietnam Logistics Association (VLA) shows that the Vietnamese logistics market is valued at $20-22 billion a year, amounting to 20.9 percent of the country’s GDP, which is higher than the global average proportion of 14 percent and nearly double that of developed countries. 

Transport costs alone make up 40-60 percent of total logistics costs.

The Vietnam Chamber of Commerce and Industry (VCCI) reported that the cost to ship one container of goods from Hai Phong to Hanoi (100 kilometers) is three times higher than the cost to ship one container from China or South Korea to Vietnam.

The calculations by the HCMC Cargo Transport Association showed that BOT road tax is even higher than expenses on fuel for the same section of road.

When carrying goods from ports in district 7, HCMC to Vung Tau, the fuel costs VND750,000 for 60 liters of oil, while the two-way toll is VND800,000.

According to Lam Dai Vinh, director of Lam Vinh Transport, the toll that trailers pay accounts for 20 percent of total revenue from one shipment.

“We have to pay VND1-2 million in tolls for one shipment, while the revenue is just 4-5 million,” he said, adding that the cost is similar if carrying cargo from Cat Lai Port to Can Tho City on the HCMC – Trung Luong Highway.

Nguyen Van Chanh, deputy chair of the HCMC Cargo Transport Association, said there are toll collection stations everywhere, at the entrances to HCMC, and on Highway No 1 which links with Binh Duong, Dong Nai and Tay Ninh.

He said that enterprises not only have to pay toll, but also road maintenance fees. One truck has to pay VND17 million for that kind of fee each year, so one enterprise with 10 trucks would have to pay VND170 million a month.

Despite the high required fees, the current infrastructure still cannot satisfy enterprises’ needs, thus weakening their business efficiency.

Vinh said if road conditions are good, one enterprise can do two shipments a day within  inner HCMC. However, because of regular traffic jams, only one shipment can be made.

Meanwhile, transportation firms buy monthly tickets for tolls, VND7.2 million a month for one vehicle, or VND240,000 a day. 

Similarly, enterprises have to pay road maintenance fees monthly, which means that if their vehicles don’t roll on roads, the owners still have to pay a fee. If counting the opportunity cost, the loss would be even higher.

RELATED NEWS

Logistics industry looks towards impending growth

More effort asked for stronger logistics industry

Kim Chi