Cross Border Trucking Malaysia, Thailand and Singapore Market Intelligence

Industry Outlook & Drivers

Regional Market Outlook on Cross Border Trucking

Road is the preferred mode for freight transportation within and also between Singapore, Malaysia, and Thailand by shippers from FMCH, F&B and Automobile companies, as it moves about 60 percent of the total freight.

The trucking industry is fragmented in all these countries, due to the presence of more local and regional service providers. As these 2PL companies outsource their trucks to global 3PLs, the industry is dominated by global 3PLS.

Thailand

• The trucking industry in Thailand is highly fragmented with more than 9,623 LSPs involved in road transportation activities
• Majority of the suppliers own <10 trucks and engage with larger road transportation companies/3PLs for maximum truck utilization
• The trucking market is dominated by global 3PL companies, such as DHL, DB Schenker, and few others holding a significant market share, due to the integrated service they provide

Malaysia

• The Malaysian trucking market is highly fragmented, with more than 75% of companies are independent truckers and small to medium scale operators
• Owing to its excellent connectivity, trucking services have become one of the key elements of the commercial logistics industry
• While several local firms have reported sizable market returns, approximately 70% of the industry continues to be dominated by multinationals firms, such as DB Schenker, DHL and Nippon Express

Singapore

• The trucking industry is fragmented with 5,445 registered trucking service providers, where majority of them concentrate on cross border trucking services
• The trucking service providers posted a collective revenue of S$7M in 2016, thereby obtaining a profit of about 20 percent
• The market is dominated by global 3PLs, who mainly outsource trucks from local trucking companies

Cross Border Trucking Market Overview

The average lead time for transporting goods by trucks from Singapore to Thailand is about 3 days, which is almost the same as air freight and much lesser than sea freight.

The border crossings are open for 24 hours everyday for customs clearance, but for goods that are hazardous and dangerous, the customs clearance are carried out only during the business hours.

Logistics Performance Index

LPI is based on the ranking of country's customs, its infrastructure, logistics quality and competence and so on. Singapore is superior to Malaysia and Thailand as the country has very good infrastructure and matured customs clearance.

Transit Time

• 3–4 days between Singapore, Malaysia, and Thailand and it is the same as air freight but very lesser compared to sea freight

Transportation Cost

• Air freight is much costlier and sea freight is cheaper than road freight, but to due to lesser lead time, FMCG companies prefer for road freight

Single Point Delivery

• As cross border trucking is mostly carried out in larger trucks and containers, FMCG companies prefer to do a single point delivery between these countries. Post which, with the help of distributors, they carry out secondary transportation

Border Crossings

• Malaysia – Thailand: Crossings at Sadao and Pedang Besar, open for 24 hours
• Malaysia – Singapore: Johor Bahru – Woodlands border, open for 24 hours

Cross Border Supply–Demand Analysis

The supply and demand scenario for cross border trucking is high, as there are many regional players in Malaysia and Thailand, who provide these services and also the volume of goods moved across the border increases every year.

The supply of trucks in the market is high. The average annual utilization rate of trucks in this region is 75% in normal days and the utilization goes beyond 85% during peak seasons.

Supply Demand

• The supply for cross border trucking is high in the region, as there are numerous small Malaysian and Thai land trucking companies, offering FTL service across Singapore, Malaysia and Thailand
• Altogether, the three countries have more than 2 million trucks on road, which are used for goods transportation
• Goods are transported across the border mostly in containers with the help of prime movers as FCL loads, since the profit through LTL/LCL services is very less
• Goods such as natural rubber, retail products, electronics, fish, fresh vegetables and fruits, food products, petroleum and chemicals and furniture are the major commodities driving the demand for cross border trucking services
• With expected rise in traded volume of retail products, petroleum and chemical, it is more likely that freight demand for in-land transportation is expected to grow in the upcoming years

High Utilization

• Singapore and metropolitan cities in Thailand and peninsular Malaysia are expected to have medium to high utilization rate, due to the presence of major industries and logistics hubs
• Utilization exceeds 85 percent between
  • December – February (between Singapore and Malaysia), due to the festive season (Chinese New Year
  • June – December (between Thailand and other two countries, due to agriculture productivity in Thailand