Market Trends of asean courier, express, and parcel (cep) Industry
Government Policies Helping the Transportation Sector Recover
- In 2022, the transportation and storage sector saw a substantial 26.80% YoY growth, primarily attributed to the rising demand for transportation infrastructure. The economic growth in ASEAN nations over recent decades has boosted trade and investment activities, consequently increasing the need for transportation and storage services to facilitate the movement and storage of goods. Malaysia has made significant strides in enhancing its logistics industry to position itself as a regional logistics hub and an ASEAN gateway.
- The MRT3 is the last critical route to complete the Kuala Lumpur urban rail network, and the line is 50.8 km long and runs around Kuala Lumpur's outskirts. Construction is expected to begin in early 2023 and is slated for full completion by 2030, while operations for the first phase are expected to commence in 2028. In August 2017, the ECRL began constructing a double-track railway linking the infrastructure project. It is expected to include 20 stations with 14 passenger stations, five combined passenger and freight stations, and one freight station. The project is expected to be operational in January 2027 and is anticipated to transport 5.6 million passengers annually by transporting 440 passengers in six carriages.
- Logistics expenses can contribute up to 20% of the price of finished goods in some ASEAN member countries, which is nearly double the global average. The economies of member states are also expected to grow if regulations controlling foreign direct investment in the logistics industry are reevaluated. In the medium to long run, lowering trade and FDI restrictions is expected to increase GDP by up to 17%.
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Impact of Ukraine-Russia war on ASEAN countries led to rising fuel prices and supply chain disruptions
- The YoY growth of natural gas prices was recorded at 34.3%, and the YoY growth of gasoline prices stood at 12.8% in 2021. With the rising fuel costs, trucking carriers and operators across the region are struggling to keep up with the increasing prices, and the cost of diesel is affecting freight rates and trucking capacity. Many of the current measures in Southeast Asia were implemented in response to the energy market dynamics in the second half of 2021 and are yet to incorporate the impact of the Russia-Ukraine war.
- The price of diesel has gradually fallen since February 2023 to 32 baht (USD 0.92) a litre, in response to declining global oil prices. Thailand’s Oil Fuel Fund has decided to maintain the current retail price of diesel at USD 1.01 per liter, in an attempt to help mitigate the high living cost amidst global oil price fluctuations. As part of Malaysia's goal to construct the oil refining and storage hub to meet the domestic demand for refined petroleum products, Petronas has invested about USD 16 billion in the Refining and Petrochemicals Integrated Development Project (RAPID) in Johor. The RAPID facility will be the country's first refinery to produce diesel and gasoline that meet the Euro V standard, which lowers carbon dioxide emission levels.
- In an effort to reduce growing subsidies, the Indonesian government increased the prices of subsidised fuel by approximately 30% in September 2022, despite the potential risk of mass protests. The price of subsidised gasoline was raised from 7,650 rupiahs (USD 0.49) per litre to 10,000 rupiahs (USD 0.67) per litre, while the price of subsidised diesel rose from 5,150 rupiahs (USD 0.35) per litre to 6,800 rupiahs (USD 0.46) per litre.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Declining fertility rates drive population decline in ASEAN, Jakarta tops the list as most populous city
- Indonesia, Malaysia, and Thailand are leading oil and gas GDP growth in the ASEAN region, followed by the manufacturing sector demand
- ASEAN's e-commerce market is expected to grow rapidly, registering a CAGR of 11% during 2023-27
- ASEAN economies anticipates growth in exports by 2030 led by development in manufacturing sector
- Vietnam's manufacturing boom due to upgrades in logistics infrastructure and rise trade
- ASEAN economies are promoting the manufacturing sector by introducing several strategic initiatives to stimulate growth
- Increasing raw material and energy costs due to supply chain disruptions driving inflation
- The GVA of the manufacturing industry in the region grew by over 10% YoY in 2022, led by food and beverages sub-segment
- Huge reliance on wheat imports has become a major concern to food security for ASEAN countries
- Vietnam's expressway expansion and Malaysia's USD20.43 billion investment boost ASEAN economic growth
