The Malaysian Logistics Industry 2020
The logistics industry has evolved in recent years.
What Happened in 2019?
With the rise of e-commerce in Malaysia, many companies have capitalized on this emerging trend, with particular interest in areas such as cold-chain logistics and last mile deliveries with particular interest due to the high margins and rising demand for such services.
In 2019, the Malaysian government revived several stalled projects and unveiled a new National Transport Policy 2019 – 2030 to further develop a transport system that will accelerate the national economic growth of the nation.
The East Coast Rail Link (ECRL), the 640km railway project linking Kota Bahru in Kelantan to Port Klang was one of the projects receiving the go ahead after being suspended in 2019, after it's cost being trimmed from RM 65.6 billion to RM 44 billion.
The project, will cut travelling time between Kota Bahru to the Klang Valley to 4 hours.
What's In Store in 2020?
The reduction of 18% of the toll rates for highways under PLUS Malaysia, will see savings for highway users and the local trucking industry, saving up to RM 1.13 billion in the year 2020.
Besides that, the governments decision to withhold the Petrol Subsidy Program (PSP) which will see petrol prices being floated, will contribute in further cost reduction for both consumers and trucking industry players aside.
This will create extra spending power for consumers, and stabilizing cost for the logistics industry in Malaysia.
KiLAT 2020
Malaysia's commitment to boost it's profile and image as a leading transport industry hub can be further seen by the hosting of the inaugural Kuala Lumpur International Logistics and Transport Exhibition (KiLAT) 2020 from July 8 – 11 2020. The event would serve as a platform to attract more foreign companies to establish their base here and make Malaysia their regional distribution hub.
Market Overview
With a majority of Malaysia's population concentrated on the coastline, Malaysia has a relatively low logistics cost. According to the World Bank Logistics Performance Index (LPI), Malaysia had the highest LPI score in 2016 in South East Asia after Singapore. However, Thailand and Vietnam have overtaken Malaysia in 2018. Malaysia currently ranks 41st position among 160 countries in the world.
As the growth of the logistics sector is expected to be positive in the future, there is much scope for improvement, with the need for much efficient transport links required.
In order to enable the logistics sector to handle greater volume of freight, speed up the time taken to deliver goods efficiently across the supply chain, and to lower the cost of delivery, several improvements need to be made.
There will be a need for continuous investment in the logistics infrastructure of the country, and advanced information technology (IT) systems in the nation to link and make logistics much more efficient.
The Logistics Industry in Malaysia is set to grow in 2020, thus improving the demand on the local trucking industry.