The logistics and freight market of Malaysia has undergone massive changes over the past few years. With the e-commerce industry being the latest trend, all big companies and organizations are trying to capitalize on this emerging market trend. All this has led to the interest of these brands in the emerging areas, such as last-mile delivery services, cold chain logistics, etc. The latest reports and data states that the overall economy of the country is expecting a growth rate of around five to six percent, thereby driving the freight and logistics industry much further.
Most of the country’s population is mainly concentrated all along the coastline, making the logistics cost on the lower side. However, it is seen that better transportation links are in utter need of connecting the cities to the ports, either through rail or by road. According to the ratings of the World Bank Logistics Performance Index of 2016, Malaysia has the second-highest LPI, after Singapore in the Southeast Asian region. However, in recent day’s countries like Vietnam and Thailand have well overtaken Malaysia, according to their LPI scores. As of now, the country’s LPI rank, among the other 160 countries has declined to 41st position from the previous 32nd position of 2016.
Major Trends Of Malaysian Freight and Logistics Market
Malaysian Maritime Sector
On average, Malaysia has a coastline of about 4675km, whereas East Malaysia has 2607 km and Peninsular Malaysia has around 2068 km of total coastline. Among the other 160 countries in the world, Malaysia ranks on 29th on having the longest coast in the world. Some of the major ports of Malaysia, which holds for the majority of traded goods are Johor Port, Port Klang, Kuantan Port, Port of Tanjung Pelepas, Penang Port, Bintulu Port, and Kemaman Port. All these ports have been a major cause of the growth of the country’s shipping industry over the years. Significantly low-cost docking coupled with the strategic location of these ports acts as the driver for the logistics market. Apart from this, the country’s geographical location adds to its advantage to support numerous ports, terminals, or shipyards to help in the further development of the country’s maritime industry.
As discussed, the country’s geographic location makes it a major transshipment hub. Port Klang is the major harbor of the country, holding for around 70% of the country’s cargo being transhipped. However, there are a lot of challenges for the Malaysian ports. Delay in cargo shipment processes is the main reason why the ports are losing to its competitors. Adding to this, the recent change of the Malaysian government after six years might have a significant impact on the country’s logistics soon. With the new government on the throne, there are some financial and economic reforms taking place rapidly. Abolishing of the GST, restoring the value of Ringgit, reduction in the excise taxes might become the silver line of the country’s logistics market in the distant future.
The Malaysian halal market is being recognized as an emerging market. The Middle East and some parts of the Asian countries seem to the major market for Malaysian halal products. With such massive worldwide exposure, Malaysia can easily promote itself as the halal gateway and can even cater to several investments in the coming future. However, the lack of certification is one of the many challenges, in the whole halal industry.
Logistics Company in Malaysia
If you are looking for freight and logistics support across Malaysia, SKA Transport can surely cater to your needs. The company’s dedicated team and compelling infrastructure have led them to fulfill every promise made to their customers. From dealing with the customs to offering warehouse and distribution solutions SKA Transport is a name you can always trust.