Cambodia Freight And Logistics Market Size

Cambodia Freight & Logistics Market Analysis

The Cambodia Freight And Logistics Market size is estimated at USD 1.91 billion in 2024, and is expected to reach USD 2.32 billion by 2029, growing at a CAGR of 3.95% during the forecast period (2024-2029).

• The sudden eruption of the COVID-19 pandemic had a major impact on Asian supply chains, which grew into global production centers. Due to reduced demand, supply capacity, and transport capacity, the supply chains became difficult to maintain. However, Cambodia's freight and logistics sector remained surprisingly strong, returning to near pre-pandemic levels after a series of COVID-19 slowdowns effectively brought market activity to a halt.
• Located in South-East Asia, Cambodia is one of the fastest developing countries in Asia, with an average GDP growth rate of around 7% over the past decade. The economic boom, combined with a growing population, has resulted in increased pressure on the country’s transport infrastructure.
• In order to facilitate the development of transport infrastructure, the Government of Cambodia and its development partners prepared a “Logistics System Improvement Master Plan” in 2018 to improve the logistics system and implement priority projects identified for realizing sustainable economic growth.
• Cambodia currently has four drivers of growth: agriculture, tourism, manufacturing (mainly garments for export), and commercial and residential construction. Expansion and diversification of Cambodia’s drivers of growth, especially agriculture, are important development objectives for the government.
• Efficient transport is critical for the growth of those sectors. The agriculture sector relies on road and maritime transport for exports, the tourism sector relies on international air carriers and road transport, manufacturing relies on road and water transport to deliver the materials needed and to export finished products, and the construction sector relies on water and road transport to deliver materials. So, to maintain economic growth, the transportation sector needs to be developed and maintained.
• Shipping costs, especially to remote markets such as Europe and the United States, remain high, fueled by a constant shortage of containers that have proven particularly troublesome for farmers.
• According to the Cambodian Logistics Association, shipping costs from Cambodia to international markets range from 10% to 20% of the set price. Congestion at some international ports further reduced shipments.
• Shipping costs to the US and Europe per container rose from about USD 2,000 to USD 5,000 before the outbreak and from USD 8,000 to USD 10,000 during the COVID-19 crisis and rising fuel prices. Special shipping prices can go as high as USD 15,000 for a single container.
• Rail freight and passenger transport is recognized as a potential driver of economic growth and employment opportunities, as well as attracting inbound foreign investment. Export-oriented companies have driven Cambodia's strong economic growth.
• The regional and Global value logistics sector is at the center of the country's development strategy as it is increasingly integrated into the chain. The World Bank estimates that by 2030, Cambodian businesses are expected to transport four times as many goods via highways, ports, airports, and warehouses.