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ASEAN road freight market is expected to witness a compound annual growth rate of more than 8% from 2020 to 2025, according to a new DHL whitepaper
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Renewed economic growth in ASEAN countries will give rise to demand for logistics services as trade recovers, the paper said
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Road freight to jump as e-commerce booms, manufacturing rebounds and companies regionalize and diversify their supply chains
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Easing of trade restrictions and implementation of new regulatory initiatives augur well for ASEAN countries
The Association of Southeast Asian Nations road freight market is expected to witness a compound annual growth rate of more than 8% from 2020 to 2025, according to the latest DHL Global Forwarding whitepaper “Southeast Asia Freight: The Road to Growth”, released on August 18.
The predicted upswing is driven by renewed growth in many of Southeast Asia’s leading economies, as manufacturing rebounds and companies regionalize and diversify their supply chains, the paper said.
“With the easing of trade restrictions and implementation of new regulatory initiatives in the region such as the ASEAN Customs Transit System and Regional Comprehensive Economic Partnership, trade cooperation will continue to strengthen and bolster intra-Asia trade. This augurs well for ASEAN countries as they gear up to bounce back strongly from the Covid-19 pandemic,” said Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific, in a statement.
One of the most significant developments is the ASEAN Customs Transit System (ACTS) introduced in 2020, which allows operators to move goods seamlessly across multiple ASEAN borders with a single guarantee that covers duties and taxes for the entire journey.
RELATED READ: ASEAN launches customs transit system for simplified goods movement
The rise in e-commerce consumer spending and B2B e-commerce, predicted to see a 70% increase by 2027, is also pushing demand for door-to-door logistics solutions. In 2021, the e-commerce sector in Southeast Asia is expected to expand by 5.5%.
“Road freight is now playing a more significant role in international long-haul solutions across Asia as it offers a cost effective and sustainable option. As we have seen in the last year with volatile air and ocean freight rates during the Covid-19 pandemic, road or multimodal solutions have offered more stable pricing, capacity, and easier border access in Southeast Asia,” said Thomas Tieber, CEO, DHL Global Forwarding Southeast Asia.
Road freight is significantly cheaper and generates less emissions than air freight, while offering increased security and faster lead times than ocean freight, DHL said. Road solutions are also highly flexible with trucks able to manage door-to-door local, cross-border, long-haul and short-haul deliveries.
Increasingly, customers are choosing to truck their short- and long-haul shipments for part of, or the entire journey due to the reduced carbon emissions it offers as compared to airfreight, it added.
An air-road shipment from Jakarta to Bangkok via Singapore cuts carbon emissions by half, in addition to cost savings of 35%, as compared to a direct flight, while trucking a shipment from Singapore to China reduces carbon footprint by 83% as compared to airfreight.
“Road logistics is seeing a greener future, powered by technology to become more efficient and secure, and being more sustainable with carbon efficient fuels. Together, these factors are transforming the road freight sector and creating ever more attractive and sustainable logistics solutions,” added Tieber.
