An Overview of Logistic & Supply Chain in Malaysia

account_circle Gabriel Amadeus Valentino

event 12 June 2024

category Economy, Trade, Business

Strategically located in the heart of Southeast Asia, Malaysia thrives as a key center for logistics and international trade, facilitating the seamless movement of goods throughout the region. Its diverse economy, encompassing industries like manufacturing, electronics, agriculture, and pharmaceuticals, fuels a strong demand for efficient logistics services. Recognizing this, the Malaysian government actively supports the industry's growth through initiatives promoting infrastructure development, automation and digitalization, and research and development (R&D).

Role of Logistics in Malaysia

One of the main factors influencing Malaysia's trade and economic expansion is logistics. The freight and logistics market in Malaysia is anticipated to develop at a compound annual growth rate of 11% in 2026 compared to the previous ten years. Because of this, there is a national need for highly qualified logistics specialists. The importance of logistics to Malaysia is further emphasized by the nation's significant role in international trade.

The World Bank estimates that the total value of Malaysia's international commerce in 2019 accounted for 123.1% of the GDP of the nation. The International Monetary Fund (IMF) also expects the volume of exports of goods and services from Malaysia to increase by 9.7% in 2021. Since logistics is closely tied to international trade, it is only to be expected that the industry in Malaysia has thrived and continues to do so.

Logistics plays a central role in the smooth functioning of Malaysia's export-import (EXIM) supply chain. It encompasses the entire journey of goods, from origin to final destination, impacting both efficiency and cost. To maximize this EXIM supply chain, Malaysian logistics need to follow the current trends available in the global market. Let's discuss some of the improvements needed for the logistics sector to maximize their supply chain.

Supply Chain Integration and Collaboration

To enhance responsiveness, visibility, and teamwork, companies should prioritize seamless supply chain integration. Logistics companies collaborate with retailers, manufacturers, and other supply chain partners to streamline lead times, improve customer satisfaction, and optimize inventory management.

Automation and Digitalization Adaptability

Automation and digitalization have revolutionized the logistics sector, enabling data-driven decision-making, increased efficiency, and cost-effective practices. It is recommended for the businesses to implement various technologies, such as robotics, warehouse management systems (WMS), autonomous guided vehicles (AGVs), and transportation management systems (TMS), to achieve a more effective and efficient supply chain process. This is accomplished by maximizing resource utilization and streamlining operations.

E-commerce Driving Last-mile Delivery

The final stage of product delivery to the customer's doorstep is known as "last-mile delivery," and it is in high demand due to the growth of e-commerce. In response to the changing demands of e-commerce clients, logistics companies should be making investments in last-mile delivery solutions, such as micro-mobility, drone delivery, and flexible delivery alternatives.

Talent Development and Skills Upgrading

The logistics industry faces a shortage of skilled labor, requiring a focus on talent development and skills upgrading. To address this gap and attract qualified personnel, logistics providers are investing in training programs, apprenticeships, and partnerships with educational institutions.

There you have it!This overview of Malaysia's logistics and supply chain highlights the country's potential as a key player in the region. By implementing these improvements, Malaysia can significantly enhance its supply chain, making it a more attractive and convenient destination for exports, ultimately granting it a competitive edge over other nations.

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