Tackling Malaysia’s logistics challenges


PERHAPS, no one has to deal with the congested traffic situation on Malaysian roads more than a logistics company.

M. Andy, a dispatch boy-turned-logistics company boss, has had his fair share of frustration with traffic bottlenecks and inefficiencies that impede the progress of the logistics industry due to loss in productivity hours.

Issues such as driver shortage, the over usage of non-compliant trucks and the absence of a common CIQ (customs, immigration and quarantine) transit centre are some of the biggest challenges faced by the logistics industry in Malaysia.

Big global technology firms like Amazon and Alibaba are also compounding the challenges faced by logistics firms by continuously changing the pace of the e-commerce landscape and by offering a wealth of delivery options to consumers.

Due to this growth in orders from the e-commerce sector, many small logistics companies are faced with unprecedented challenges and are likely to lose out in the long-run due to their lack of resources to fully meet the demands of the e-commerce market. Some of their last-mile delivery challenges include the lack of new technology and automation in their operations. This can cause a further loss in data collection and in the correct use of information, which perpetuates their inability to measure up to market demands.

Additionally, the last few years have seen a growing number of new players in the market, particularly venture capital-backed on-demand logistics start-ups such as GoGoVan, Lalamove, Deliveree, Ninja Van and TheLorry, driving competition in the sector.

“As the growth of the e-commerce market continues to attract new players, we expect to see more intense competition in the express delivery segment, with some impact on business margin. Many logistics players are also faced with higher operating costs due to manpower cost, fuel cost and warehouse space expansion,” says Andy, group managing director of Everest Integrated Logistics.

However, the change in government brings hope for a new start in the way traffic and the transportation sector are managed. For a start, Andy says the Malaysia Logistic Council, which he is a member of, will begin a series of engagement with the Transport Ministry on the input needed to have an efficient transportation system.

“The government has always recognised the logistics sector as a vital component of the economic performance of the country. They are keen to look for solutions and has promised to introduce measures to resolve bottlenecks and increase efficiency.

“A good way to tackle this issue is to have both the logistics industry and the government doing their parts to come up with a good solution plan. We have the expertise to tackle this traffic situation in the country,” says Andy.

Related story:

Reaching for the peak in logistics business