This research service discusses Malaysia’s logistics industry landscape between 2014 and 2020. The objectives are to identify and understand the logistics industry dynamics in terms of strategic location, the transport and storage sub-sector, and logistics services. The connectivity, capacity, and efficiency of the logistics industry is also analyzed and discussed.
Malaysia’s growth as a multi-sector economy over the past decade has been fuelled by the services sector. In 2015, the services sector accounted for more than half of the country’s gross domestic product (GDP). As trade expansion and inflows of foreign capital quicken the pace of Malaysia’s economic growth, the country’s logistics industry has established itself as a significant element in national competitiveness, bringing with it associated economic multipliers.
The momentum in the service sector was largely driven by the growth of wholesale and retail trade, which accounted for almost 18% of Malaysia’s GDP in 2014. The transport and storage sub-sector grew at about 10% in the same year, making up 3% of Malaysia’s economy.
The logistics industry performance has experienced favorable growth over the years, owing to the manufacturing, wholesale and retail, and business services spending. Malaysia’s strategic geographical position, excellent ports and connectivity, vast service capability provided by logistics providers, supportive legislative framework, and highly educated labor force are also growth factors driving the logistics industry here.
These strengths favor Malaysia as a key logistics link to Asia. The country is strategically located in the center of economic activity, surrounded by the growing ASEAN community and several emerging Asian economies. Despite Malaysia’s strengths, however, several core issues need to be addressed to support the continued growth of its logistics industry.
This research provides insights into the developments of Malaysia’s logistics industry. Following are the key questions it answers:
• What are the prevailing trends in Malaysia’s logistics industry, and what will the industry look like in the years to come?
• What is Malaysia’s logistics industry performance in terms of freight volume?
• What are the key freight activities?
• What are the key growth drivers?
• What are the issues and challenges faced by market participants?
• What areas need improvement, and what can be done?
• How will the Eleventh Malaysia Plan 2016–2020 affect the logistics industry?
• What is the impact of the ASEAN Economic Community (AEC) on the logistics industry in Malaysia?
• What growth opportunities are expected to arise in the near future that will enable market participants to gain market share?
Table of Contents
1. Executive Summary
Malaysia’s Aspiration to become the Preferred Logistics Gateways to Asia
Strategic Strengths and Growth Drivers
Snapshot of Malaysia’s Economy and the Logistics Industry
Economy of Malaysia
Snapshot of Current Logistics Market
Snapshot of Malaysia’s Logistics Industry Competitive Landscape
Malaysia Logistics Industry Performance
Trade Activity in Malaysia
Malaysia Logistics Industry Performance—Freight Volume Summary
Relative Position of Malaysia in Logistics Performance Index (LPI)
The Logistics Industry—Issues and Challenges
Areas of improvement—Addressing Core Issues
Growth Opportunities in the Logistics Industry—Summary
Growth Opportunities from Improved Connectivity
Growth Opportunities from Improved Capability
Growth Opportunities from Improved Efficiency
Growth Opportunities and Companies to Action
Growth Opportunity—Malaysia’s Logistics Industry
Way Forward for the Malaysian Logistics Industry
Key Pillars of ASEAN Economic Community (AEC) 2015
ASEAN Economic Community (AEC)
Impact of AEC to Malaysia Logistics Industry
Growth Areas for Malaysia in AEC Context
Way Forward—A Vision for the Future
The Frost & Sullivan Story
List of Figures & Charts
1. Logistics Performance Index Ranking, Comparison of Malaysia and Global, 2014
2. Ease of Doing Business, Comparison of Malaysia and Global, 2014
3. Logistics Market: Service & Parts Management Benchmark Survey, Global, 2015
1. Logistics Industry Vision, Malaysia, 2015–2020
2. Growth of GDP at Constant Price (1) and Current Price, Malaysia, 2008–2014
3. Growth of Service Sector and Transport & Storage Sub-sector, Malaysia, 2008–2014
4. Transport & Storage Sector, Malaysia, 2008–2014
5. Malaysia’s GDP Composition by Sector, Malaysia, 2014
6. Logistics Market: Number of Business Establishments by Sub-Segment, Malaysia, 2014
7. Logistics Market: Freight Movement, Malaysia, 2008–2014
8. Transport & Storage Sector, Malaysia, 2008–2014
9. Air Freight Volume, Malaysia, 2008–2014
10. Sea Freight Volume, Malaysia, 2008–2014
11. Rail Freight Volume, Malaysia, 2008–2014
12. Retail eCommerce Market: Market Size, Global, 2015
13. Retail eCommerce Market: Estimated Growth Rate, Global, 2013–2017