Trucked and loaded: a greener way to move cargo

Road freight makes up nearly one third of Asean’s logistics market, according to a study. — Bloomberg

As e-commerce continues to boom, moving goods via cross-border road transportation is the way forward, according to a study.

In a white paper titled “Southeast Asia Freight: The Road To Growth”, DHL Global Forwarding found that transporting cargoes using long-haul trucking is significantly cheaper and generates less pollution than airfreight.

For instance, an air-road shipment from Jakarta to Bangkok via Singapore cuts carbon emission by half and saves up to 35% in costs compared to a direct flight, the study found.

Meanwhile, trucking goods from Singapore to China has a 83% lower carbon footprint compared to airfreight, the firm claimed.

“Road logistics is seeing a greener future, powered by technology to become more efficient and secure, and more sustainable with carbon efficient fuels,” said DHL Global Forwarding South-East Asia CEO Thomas Tieber.

The efficiency of trucking is improving as new digital freight forwarding marketplaces allow cargoes to be matched better with trucking capacity, reducing the number of journeys made with little or no load.

The marketplaces use Big Data and artificial intelligence (AI) algorithms to predict volume and required capacity, which also helps lower price points.

Quoting analytics firm Transport Intelligence (Ti), Tieber said a majority (80%) of business-to-business sales between merchants and professional purchasers – people who buy products and manage inventories for companies – will take place on digital channels by 2025.

This is expected to translate to a 70% increase in online B2B e-commerce transactions – worth US$20.9 trillion (RM88.4 trillion) – by 2027.

Tieber said customers too are realising the benefit, with many more choosing trucking for their short- and long-haul shipments.

He also said the freight rates have been volatile for air and ocean shipments last year due to the Covid-19 pandemic, while trucking and multimodal solutions have remained stable, especially with better cross-border access in South-East Asia.

DHL is expecting strong growth in cross-border road transportation in South-East Asia, driven in part by the e-commerce sector which is expected to grow 5.5% this year.

Malaysia, Singapore, Indonesia, the Philippines and Vietnam, Tieber said, will be the top five countries in this region leading the growth over the coming years.

TI Research head Nick Bailey said road freight makes up nearly one third of Asean’s logistics market, with growth in the coming decade expected to outpace the use of trucking logistics solutions in other parts of the world.

Bridging borders

DHL Global Forwarding Asia Pacific CEO Kelvin Leung credited the growth of road freight in the region to trade restrictions being eased through the implementation of new regulatory initiatives like the Asean Customs Transit System (Acts).

Introduced in Malaysia, Singapore, Thailand, Cambodia, Laos and Vietnam last year, Acts is a computerised customs transit management system that enables operators to move goods across borders using a single document and without having to pay duties and taxes that are otherwise due when goods enter or leave a country.

It works by having businesses lodge e-transit declarations directly with Asean customs authorities, which can then track the movement of cargoes from departure to the final destination.

With Acts, operators no longer need to make a customs declaration at every border, saving all parties administrative costs.

It’s also more secure as the goods will be transported across borders on the same truck from departure to destination, eliminating the need to transfer to a local truck at a border.

The DHL report stated that if cargoes have to be inspected at all road borders or undergo rigorous customs procedures, trucking companies would take even longer to deliver goods.

As of now, 500 vehicles have been licensed to operate under Acts.