MALAYSIA FREIGHT AND LOGISTICS MARKET - GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2021-2026)

The Malaysia Freight and Logistics Market is segmented by Function (Freight Transport, Freight Forwarding, Warehousing, and Value-added Services and Other Services) and End User (Manufacturing and Automotive, Oil and Gas, Mining, and Quarrying, Agriculture, Fishing, and Forestry, Construction, Distributive Trade, and Other End Users).

Market Snapshot

Malaysia Freight and Logistics market
Study Period: 2017- 2026
Base Year: 2020
CAGR: 4 %

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Market Overview

The Malaysian freight and logistics market (henceforth, referred to as the market studied) was valued at USD 37.60 billion in 2020, and it is expected to reach more than USD 55 billion by 2026 at a CAGR of more than 4% during the forecast period.

Due to COVID-19, customers have become accustomed to online shopping. This change in their shopping habits is making the logistics industry refocus on last-mile delivery services. Logistics businesses will have to enhance their last-mile capabilities to suit the present times. The COVID-19 pandemic pushed the logistics industry to re-evaluate and re-strategize its operations towards digitalization.

The logistics industry in Malaysia has evolved in recent years. With the rise of e-commerce in the country, companies are capitalizing on this emerging trend. The interest of the companies in emerging areas, such as cold chain logistics, last-mile delivery services, etc., is growing due to the high margins and rising demand.

As the growth of the logistics sector is expected to be positive in the future, there is much scope for improvement. To enable the logistics sector to handle greater volumes of freight, to speed up the time taken to deliver goods across the supply chains, and to lower the cost of this delivery, several improvements need to be made. While the country's logistics infrastructure is improving, there is a need for continuous investment into infrastructures, such as port upgrades and expansion, road networks, and advanced information technology (IT) systems.

Malaysia is a trade-dependent economy that generates large amounts of trade to be brought to and from global markets, especially in the region. Logistics is a strong supporter of supporting key industries such as manufacturing, oil, and gas.

It is estimated that the Malaysian logistics industry may need to increase the workforce by 41%, from 393,000 workers in 2016 to 554,000 workers by 2022. With the fast-growing e-commerce industry in the country, numerous jobs are expected to be created in the digital free-trade zone and e-fulfillment centers.

Scope of the Report

Freight refers to any type of goods, items, or commodities that are transported in bulk via air transport, surface transport, or sea/ocean transport. Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination.

The Malaysian freight and logistics market is segmented by function (freight transport, freight forwarding, warehousing, and value-added services and other services) and end user (manufacturing and automotive, oil and gas, mining, and quarrying, agriculture, fishing, and forestry, construction, distributive trade, and other end users).

BY FUNCTION
Freight Transport
Road
Shipping and Inland Water
Air
Rail
Freight Forwarding
Warehousing
Value-added Services and Other Services
BY END USER
Manufacturing and Automotive
Oil and Gas, Mining, and Quarrying
Agriculture, Fishing, and Forestry
Construction
Distributive Trade (Wholesale and Retail)
Other End Users

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Key Market Trends

Growing Infrastructure Sector

The Malaysian government has made considerable progress in expanding and modernizing its infrastructures throughout the country. This effort is evident by the five-year centralized economic development plan known as the Malaysia Plan, whereby public sector infrastructure development consistently holds the largest funding portion. Under the Eleventh Malaysia Plan for 2016-2020, sizeable investment in infrastructure in Malaysia is allocated for the transport and logistics sector to boost regional development.

China and Malaysia resumed construction on a massive “Belt and Road” train project in northern Malaysia in 2019 July, after a year-long suspension and following a rare agreement to cut its cost by nearly a third to about USD 11 billion.

Malaysia is already identifying new joint investment opportunities with China along the ECRL (The East Coast Rail Link) corridor.

In March 2020, the government announced plans to spend MYR 2 billion (USD 472.8 million) on infrastructure development projects.

Malaysia tops the ASEAN region with USD 250 million spent on transport infrastructure investments per million capita over the past two decades. One key driver behind Malaysia’s lead is the East Coast Rail Link (ECRL) project, which may connect the main port of Klang on the Straits of Melaka to Kota Bharu in the northeast of the peninsula. Malaysia has attracted over 78% of the top 50 global logistics players to set their footprint in the country.

According to industry reports, few logistics providers in Klang such as AS Transit Warehouse Sdn Bhd, Bersatu Integrated Logistics Sdn Bhd, Eminent JV Group Sdn Bhd, GD Fit International (M) Sdn Bhd, and Reefer Logistics Sdn Bhd are leveraging on the opportunities for business expansion.

Malaysia Freight and Logistics trend1

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E-commerce is Driving the Logistics Industry

According to Industry reports, Malaysia’s e-commerce market is worth USD 4.3 billion and is expected to double to USD 8.1 billion by the year 2024, at a CAGR of 14%. E-commerce growth in Malaysia is primarily driven by a growing number of digitally savvy middle-class who are looking for great deals and access to international brands. 

Traditionally e-commerce players in Southeast Asia faced logistical challenges due to the fragmented topology of the region dominated by multiple islands and dense jungles. However, Malaysia is segregated into only two major parts – Peninsular Malaysia and East Malaysia, which makes e-commerce logistics a whole lot more straightforward and cost-effective.

Since the Movement Control Order (MCO) went into effect on 18 March 2020, businesses and stores deemed non-essential were ordered to suspend operations. A key thing to notice is that the Government quickly declared e-commerce to be an essential service in Malaysia and allowed it to operate.

In Malaysia, one of the largest logistics players with a commanding market share of fulfillment services in the e-commerce market is the incumbent, Pos Malaysia. Meanwhile, other homegrown players, like GDex, have played a significant role in advancing e-commerce in Malaysia. In their bid to offer the best end-to-end consumer experience, e-marketplaces like Lazada have started offering logistics and fulfillment services under Lazada eLogistics (LEL), on top of operating an e-commerce store. It also partnered with third-party logistics providers to ensure that the increase in the volume of e-commerce transactions is catered to.

Malaysia Freight and logistics market trend2

Competitive Landscape

Currently, the Malaysian freight and logistics market landscape is fragmented, with a large number of players. For instance, the country's trucking industry is made of independent truckers and SMEs, who account for more than 70% of the market. However, the industry is expected to transform into a consolidated state in the future. Some of the key players in the market incude Tiong Nam logistics, Xin Hwa, CJ Century, GD Express, and DHL, among others. In order to gain significant market share and serve the rising demand, the companies are adopting the merger and acquisition trend. Especially, the rise in e-commerce is resulting in vertical and horizontal consolidation among the logistics and e-commerce players to gain scale and network.

Recent Developments

In December 2020, DHL Express inked a joint agreement with Aerodyne Group in Malaysia to assess the commercial viability of drone technology and develop business models for its use in life sciences and maritime supply chains.

In December 2020, GD Express Carrier Bhd (GDEX) and Tasco Bhd inked a memorandum of understanding (MoU) to enhance logistics delivery services between end consumers in Malaysia with domestic and international destinations.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Analysis Methodology

    2. 2.2 Research Phases

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS AND INSIGHTS

    1. 4.1 Current Market Scenario

    2. 4.2 Market Dynamics

      1. 4.2.1 Drivers

      2. 4.2.2 Restraints

      3. 4.2.3 Opportunities

    3. 4.3 Industry Attractiveness and Porter's Five Forces Analysis

    4. 4.4 Value Chain/Supply Chain Analysis

    5. 4.5 Government Regulations and Initiatives

    6. 4.6 Technological Trends (Overview of Industry 4.0 in Malaysia and its Impact on the Logistics Sector)

    7. 4.7 Insights into the E-commerce Industry (Domestic and Cross-border E-commerce)

    8. 4.8 Insights into Cross-border Trucking, Intermodal Transportation, and Transit Trade though Malaysia

    9. 4.9 Spotlight - China-Europe Rail Freight Transport

    10. 4.10 Elaboration on Halal Logistics

    11. 4.11 Brief on Digital Free Trade Zone (DFTZ) and China-Malaysia Bilateral Relations

    12. 4.12 Impact of COVID - 19 on the Market

  5. 5. MARKET SEGMENTATION (Market Size by Value)

    1. 5.1 BY FUNCTION

      1. 5.1.1 Freight Transport

        1. 5.1.1.1 Road

        2. 5.1.1.2 Shipping and Inland Water

        3. 5.1.1.3 Air

        4. 5.1.1.4 Rail

      2. 5.1.2 Freight Forwarding

      3. 5.1.3 Warehousing

      4. 5.1.4 Value-added Services and Other Services

    2. 5.2 BY END USER

      1. 5.2.1 Manufacturing and Automotive

      2. 5.2.2 Oil and Gas, Mining, and Quarrying

      3. 5.2.3 Agriculture, Fishing, and Forestry

      4. 5.2.4 Construction

      5. 5.2.5 Distributive Trade (Wholesale and Retail)

      6. 5.2.6 Other End Users

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Overview (Market Concentration and Major Players)

    2. 6.2 Company Profiles, including Mergers, Acquisitions, Joint Ventures, Collaborations, and Agreements)

      1. 6.2.1 International Companies

        1. 6.2.1.1 Deutsche Post DHL Group

        2. 6.2.1.2 Yusen Logistics Co. Ltd - TASCO Berhad

        3. 6.2.1.3 Nippon Express Co. Ltd

        4. 6.2.1.4 CEVA Logistics

        5. 6.2.1.5 Kerry Logistics Network Limited

        6. 6.2.1.6 DB Schenker

        7. 6.2.1.7 Agility Logistics Pvt. Ltd

        8. 6.2.1.8 Hellmann Worldwide Logistics

        9. 6.2.1.9 DSV

        10. 6.2.1.10 Kuehne + Nagel International AG

        11. 6.2.1.11 United Parcel Service Inc.

        12. 6.2.1.12 FedEx Corporation*

      2. 6.2.2 Domestic Companies

        1. 6.2.2.1 Tiong Nam Logistics Holdings Bhd

        2. 6.2.2.2 Pos Malaysia Bhd

        3. 6.2.2.3 CJ Century Logistics Holdings Berhad

        4. 6.2.2.4 Xin Hwa Holdings Berhad

        5. 6.2.2.5 Complete Logistic Services Bhd

        6. 6.2.2.6 GD Express Carrier Berhad

        7. 6.2.2.7 TransOcean Holdings Bhd

        8. 6.2.2.8 MMC Corporation Berhad

        9. 6.2.2.9 City-Link Express (M) Sdn Bhd

        10. 6.2.2.10 KTM Berhad

        11. 6.2.2.11 PKT Logistics Group Sdn Bhd*

      3. 6.2.3 Other Companies (Key Information/Overview)

        1. 6.2.3.1 SF Express (Group) Co. Ltd, Aramex PJSC, Jp Logistics Sdn Bhd, Taipanco Sdn Bhd, Skynet Worldwide (M) Sdn Bhd, YCH Group Pte Ltd, JSI Logistics Sdn Bhd, FM Global Logistics, Swift Group, Nationwide Express Courier Services Bhd, Airpak Express (M) Sdn Bhd, and DPEX Worldwide*

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. APPENDIX

    1. 8.1 GDP Distribution, by Activity and Region

    2. 8.2 Insights into Capital Flows

    3. 8.3 Economic Statistics - Transport and Storage Sector and Contribution to the Economy

    4. 8.4 External Trade Statistics - Export and Import, by Product

    5. 8.5 Insights into Key Export Destinations

    6. 8.6 Insights into Key Import Origin Countries

    7. 8.7 List of Prospective Clients for Logistics Service Providers**

**Subject to Availability
*List Not Exhaustive

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Frequently Asked Questions

The Malaysia Freight and Logistics Market market is studied from 2017 - 2026.

The Malaysia Freight and Logistics Market is growing at a CAGR of 4% over the next 5 years.

Deutsche Post DHL Group, CEVA Logistics, Tiong Nam Logistics Holdings Bhd, CJ Century Logistics Holdings Berhad, Xin Hwa Holdings Berhad are the major companies operating in Malaysia Freight and Logistics Market.

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