Malaysia and Thailand Cross borders Logistics

As we now watch 2021 unfold, our wishes are that it would be a much improved year for economic growth and stability than the pandemic-ridden 2020. Since Covid-19 first hit our shores on the 25th January 2020, the social-economic consequences have been damaging to the welfare of the rakyat, as well as many businesses. We can now see in hindsight that the source of this damage is twofold: first, is the ripple effect that the coronavirus has abroad, and the second is the impact generated domestically due to intense periods of movement control procedures. 

The good news among all these uncertain times is that with strong direction and policies, we can observe a healthy recovery in cross-border shipping and freight mobilization. Wuhan was the first city hit by the pandemic, and if the figures are accurate, they now stand as a testament to how proper management of logistics can assist in economic recovery. In the first two months of the pandemic, the total ocean freight containers dropped by a massive 10.1%, and air freight services from Wuhan dropped by an even more staggering 19%. As the table below shows, their recovery in the subsequent days has been noteworthy and can be used as a basis to indicate how speedily the forwarding and logistics sector can rebound. 

Due to operational constraints, many organizations and forwarding companies are affected by delivery delays, congestion, and higher freight rates. However, not all segments are impacted equally. Companies that are capable of delivering efficient E-Fulfillment facilities are seeing increased activity as consumers and businesses opt for online procurement of goods and essentials. The recent record low on fuel prices has also provided some small relief in operational costs.

In the near future, we could also foresee that a complete reconfiguration of global value chains will be necessary for many organizations. The pandemic has greatly exposed vulnerabilities of overtly complex and extended value chains, leading to production disruptions, particularly in our Southeast Asian region. As a result, many of these supply chains will be shortened or diversified through the acquisition of alternative strategic partners to ensure more efficient nearshoring or reshoring of strategic value chains. 

This would benefit countries with capable manufacturing sectors and mature import-export policies such as Malaysia and Thailand in the long term as many organizations may choose to partially substitute China as their main production powerhouse. There may also be a trend towards gaining additional warehousing capacity near high demand centers to shorten the time and resources of getting goods on the market. 

Fueled by the pandemic, the implementation of technology has also digitalized key areas in logistics. Organizations with robust digital capabilities will allow themselves to provide cargo visibility and tracing to enhance the way businesses are conducted online. Advanced data analytics can ensure that inefficiencies and delays are minimized. For years, there have already been discussions that long term investment in robotics, drones, and even autonomous vehicles will reduce logistics costs and overcome labor shortages for service providers. 

New safety protocols are being implemented globally in almost every industry. This is no different for the logistics sector as new SOPs and health guidelines are being heavily incorporated into our current cross borders forwarding services. As we move into the new norm, any organization that can readily adapt to these changes will have an edge in this ever-challenging sector and provide the best and safest solutions to consumers. 

These new safety measures would in turn lead to increased cargo inspections and cross-border control protocols. Many governments, including Malaysia, have responded to the crisis with temporary trade embargoes and export restrictions. These tighter cross-border processes can present many challenges for firms unfamiliar or inexperienced in the area of long-term crossborder forwarding. Every route presents its own unique set of challenges, and each border control has its own set of restrictions that will stump everyone else apart from sector specialists.   

As we undergo MCO 2.0, the proper management of logistics in any supply chain becomes even more critical to ensure minimal disruption in the procurement of goods and services. Being a logistics firm, we understand the difficulties and challenges in maintaining the value-chain as our services become more crucial than ever to both businesses and consumers alike. As a 30 year specialist in Malaysia and Thailand crossborder logistics, we are even more committed to providing focused solutions that are beyond competitive in these continuing times of challenges and uncertainty. Our focus is our stability, and you can always rely on Bintang Baru Forwarding to assist in key logistics solutions that add value. 

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