2-5 May, 2018

Indonesia Convention Exhibition
ICE - BSD City, Indonesia

News

05 May 2017

The ASEAN: an emerging logistics sector

 

The ASEAN: 10 nations, unlimited possibilities

 
Originally founded in 1967, the ASEAN is a kind of Southeast Asian-EU; a collection of countries coming together to foster political and economic cooperation. Its constituent member states are:
  • Brunei
  • Cambodia
  • Indonesia
  • Laos
  • Malaysia
  • Myanmar
  • Philippines
  • Singapore
  • Thailand
  • Vietnam

The ASEAN is home to 629 million people and generates a GDP of $2.4 trillion. It has been growing at an economic rate of around 5% annually in recent years, suggesting the world is witnessing the rise of a new economic powerhouse.
 
Free movement of goods and people between ASEAN member states is a key tenant of the organisation’s mission to improve living standards throughout Southeast Asia – meaning transport and logistics is very much in-focus for governments across the region.
 
As it is home to countries both large and small, in terms of populations and economies, transportation services vary wildly from state to state in the ASEAN. Singapore, for example, consistently ranks amongst the world’s best destinations for logistics. Yet other nations, like Laos or Myanmar, are comparatively underdeveloped.
 
ASEAN trade volumes are predicted to increase by 130%, hitting an estimated value of $5.6 billion, by 2023. The establishment of the ASEAN Economic Community (AEC) in 2015 means moving cargoes across borders is set to be an easier prospect, explaining this freight-expansion, yet the ASEAN still has a lot of ground to cover before it can match the EU as a formidable single market.

 

Billions poured into transport & logistics development in the ASEAN

 
Multi-modal transport development is essential for the smooth movement of freight around the ASEAN, simply due to its unique geography. The Philippines and Indonesia are archipelagos, made up of thousands of individual islands, while other states are located on sea-jutting peninsular that connects it to Asia proper - so maritime trade is a vital cog in the ASEAN’s transportation system.
 
Elsewhere, other nations are dominated by dense jungles, hilly highlands and soaring mountain ranges. Rail, air and road links are indispensable in moving goods and people around the ASEAN. It will come as no surprise that governments region-wide have opened their coffers and are investing heavily in vital infrastructure upgrades.
 
Quality shipping lanes are crucial to establishing an efficient supply chain network in the ASEAN. Singapore’s facilities are already world class, yet other nations are scrambling to compete or complement the city state’s maritime operations.
 
Indonesia is spending big on infrastructure, building 19 deep sea ports capable of accommodating ships with a capacity of 5,000 or more TEUs. Similar projects are underway in Malaysia, Vietnam and Thailand.
 
While sea-borne transport is the sector’s golden boy, road and rail definitely is not to be overlooked. In excess of $200 billion worth of collective investment is ready to be injected in this sector, which is set to benefit from the association’s peninsular economies the most.
 
Take a look at Malaysia and Singapore. They are jointly building a 350km high-speed rail route linking Kula Lumpur with Singapore to keep passengers and goods flowing.
 
Of course, in a region that covers a total land area of 4.4 million kilometres, and territorial waters three times as large, aviation plays a crucial transportation role. The ASEAN’s joint investment plan pledges $34 billion in funding for air transport. So this means a higher number of international and domestic airports, both passenger and cargo-focused, for more efficient aviation services.
 

Opportunities abound for international transportation service providers region-wide

 
Despite its ongoing spending spree, the ASEAN still lags behind in logistics efficiency. Skilled human capital, a lack of technical know-how, and little research and development, means those looking for transportation services often have to look outside of Southeast Asia – especially when their cargoes are a little on the large side.
 
The volume of investment, and size and scope of the ASEAN’s infrastructure projects, means project cargo operators are itching to enter the market. You can find out all the opportunities for breakbulk carriers across the region in our free market guide.
 
“The Project Cargo Industry in Malaysia & The ASEAN Economic Community: Transporting the Region to New Heights” report details the over-sized cargo environment across the region. Download it now to find out how businesses like yours can score some big wins in the Southeast Asian transport and logistics sector.
 
Once you know the opportunities the region holds, you will want to connect with those companies on the hunt for breakbulk cargo service providers.
Backimg