Malaysia’s Logistics Industry showcased Relatively High Resilience by Bouncing Back from the Impact of COVID – Ken Research

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1. Malaysia’s Logistics Industry is growing rapidly owing to the surge in demand from e-commerce, F&B, manufacturing, and other industries along with improving infrastructure

The e-commerce boom and increased use of cutting-edge technology, such as supply chain automation and digital platforms to promote efficiency, are the key drivers of the logistics sector’s rapid growth in Malaysia (CAGR – 9.2%). The growth is also being fueled by a rise in infrastructure investment through initiatives like the RCEP, Free Trade agreements, and Economic zones. Road and Sea Freight dominate the transportation market, as they are heavily used for domestic and international transportation.

2. Growing International Trade between Malaysia and its Neighbors such as Thailand, Singapore, China, Vietnam and more is supporting the growth of Logistics revenue in Malaysia.

Trade between Malaysia and China is growing and the exchange of goods between the countries is facilitating trade and investments by reducing tariffs, import quotas, export restraints and other trade barriers. Free Trade Agreements between Malaysia and ASEAN countries is contributing towards the increased international trade supporting the Road Transportation industry in Malaysia. Companies offering cross boarder trucking from Malaysia to Singapore, Thailand, Vietnam, China, Lao PDR is also smoothening the international trade between ASEAN countries.

3. The Logistics Industry in Malaysia is expected to witness Improvements in Infrastructure, and Growth in the Adoption of Automation in the next few years.

The Logistics industry, especially Warehouse sector will witness an increase in the use of technology and automation as major players will be adopting robotics technology. Advanced technology such as EDI (Electronic Data Interchange) and RFID (Radio Frequency Identification) will help in efficient inventory management. Investments and initiatives of the Malaysian government to improve the infrastructure connecting the country with Lao PDR along with various parts of China would fuel the future growth of road and rail freight services.

3. Increase in Expectations of the Customer in terms of Easy Returns, Same Day Delivery poses a Challenge for the Players in the Market.

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In Malaysia, courier businesses have to pay a hefty operational cost. It involves managing courier activities such as order allocation, order segregation, and the choice of the most effective delivery partner and vehicle. The traditional pen-paper approach has long dominated Malaysia’s crude, disorganized logistics sector. Moreover, e-commerce businesses must address the growing expectation of online order replacement or refunds. E-commerce businesses must meet high demands for same-day delivery, but because of infrastructural issues, such as the lack of street addresses and the underuse of courier services, delivery times are slowed down.

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Logistics Industry in Malaysia

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