The demand for multimodal transport services in Southeast Asia is on the rise, and shippers want to avoid the unstable air and sea markets.
According to a report by logistics giant DHL Global Forwardng, the new crown epidemic has increased cross-border road freight.
Bruno Selmoni, vice president of DHL and head of road freight and multimodal transport in ASEAN and South Asia, said: "It has quickly become an alternative solution for transporting goods in the region."
He added: "The new crown epidemic has also made road freight an important part of multimodal transport." He pointed out that the road freight market is expected to achieve an annual growth of 8% in the next five years.
He said that, in fact, although road freight was previously only used for shorter routes, it is now also used for longer routes. For example, earlier this year, DHL used trucks for customers to transport goods from China to Sweden.
Another laboratory equipment manufacturer previously relied on air and sea transportation, but during the COVID-19 crisis, freight rates continued to rise and turned to multimodal transportation, including truck transportation from Singapore to Thailand.
DHL said that traditionally, retailers and manufacturers need to sign a contract for each model, and the goods are passed from one operator to another until they reach the customer. But this can be "troublesome" because the seller is responsible for all logistics and paperwork.
Multimodal transport "simplifies the problem" by moving from origin to destination under a single contract or bill of lading.
Selmoni said that even before the pandemic, multimodal transport has been actively developed because companies "are looking for alternatives to improve transportation time, increase cost efficiency and reduce environmental pollution." For example, DHL launched a multimodal transport service connecting Indonesia and the ASEAN road network last year, connecting to Singapore by barge or air.
At the same time, another factor that promotes regional multimodal transport is the ASEAN customs transit system.
“The ASEAN Ministry of Transport has approved up to 500 trucks to obtain cross-border permits,” Selmoni explained. “With permits, goods can be transported from the point of departure to the destination by the same truck, eliminating the need to transfer goods to local trucks at the border. ."
He also said that the "China plus one" procurement strategy, although not only a result of the new crown epidemic, may continue to promote the growth of roads and multimodal cargo throughout Southeast Asia.
"As the company expands production bases outside of China to promote intra-regional trade, all ASEAN countries have had a positive impact on this strategy."
"In key markets such as Singapore, Malaysia, Thailand, Vietnam, Cambodia, and Myanmar, which are connected through the established road network, this situation is particularly delicate, and it is expanding to Indonesia, Laos and China."
