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Air Logistics Challenges & Opportunities in Malaysia: Insights from Industry Expert

Explore the major global events and local challenges impacting air logistics in Malaysia, with a focus on industry implications and necessary requirements for growth. Gain valuable insights from Michael Leong, District Manager at Expeditors, on crucial strategies for overcoming obstacles and maximizing opportunities in the air logistics sector.

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Air Logistics Challenges & Opportunities in Malaysia: Insights from Industry Expert

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  1. Air Logistics Overview & Challenges Michael Leong District Manager Expeditors (Malaysia) Sdn. Bhd.

  2. Agenda • Major global events in the industry • Local challenges • Implications • What is required Air Logistics Overview & Challenges 5th July 2007

  3. Major Global Events in the Industry • Mergers and acquisitions • Pandair / Air Express International / Danzas / DHL (Deutsche Post) / Exel (MSAS) • Schenker (Deutsche Bahn) / BAX • UPS / Fritz • Apollo / TNT Logistics = CEVA Logistics / EGL (Circle Freight) • Lep International / GeoLogistics / PWC Logistics = Agility • Increased security measures • Customs Trade Partnership Against Terrorism (C-TPAT) • Automated Manifest System (AMS) Air Logistics Overview & Challenges 5th July 2007

  4. Major Global Events in the Industry • Surcharges • Fuel Surcharge (FSC) • Security Surcharge (ISS) • Peak season • Trade imbalance’s effect on • Rates • Carrier equipment (redeployment of Unit Load Devices) • Carrier’s route development • Wood packaging requirements Air Logistics Overview & Challenges 5th July 2007

  5. Local Challenges • Airport Cargo Terminals • Insufficient warehouse space for forwarders • KLAS Terminal lack of suitability for forwarders’ operations • Insufficient direct flights and space to/from Europe and to/from Australia/New Zealand • Lack of international passenger flights • Not all carriers operate freighters • More cost effective for some carriers to carry cargo in the belly holds of passenger flights than to operate freighters • Rate competition with North Asia • Massive rate hikes during peak periods (China and Japan’s rates can be as high as >USD5.00/kg) Air Logistics Overview & Challenges 5th July 2007

  6. Local Challenges • Penang Bridge congestion • Missed flights • Delayed deliveries • Security incidents (hijackings, robberies, theft) • No available land or warehouse on the island for public bonded warehouses • More and more manufacturers are looking at outsourcing their non core competencies such as warehousing and inventory management • Inaccurate statistics (MAB) • Perceived as a only a hi-tech manufacturing base Air Logistics Overview & Challenges 5th July 2007

  7. Local Challenges • The logistics profession is still not well known, leading to insufficient number of highly skilled personnel in both the manufacturers’ shipping departments and the 3PLs/forwarders. Air Logistics Overview & Challenges 5th July 2007

  8. Implications • Mergers amongst forwarders • Less competition and choice of forwarders • Increased security measures (C-TPAT, AMS, local) • Increased costs • Affect investors’ confidence • Surcharges (FSC, ISS, peak season) • Additional cost of doing business • Trade imbalance • Higher export freight costs Air Logistics Overview & Challenges 5th July 2007

  9. Implications • Infrastructure bottlenecks (cargo terminals, Penang Bridge, public bonded warehouses, etc.) • Inefficiencies • Increased costs • Unattractive to foreign, as well as local investors • Insufficient flights (passenger as well as direct flights to/from Europe and to/from Australia/New Zealand) • Limited choice of carriers • Higher rates (less competition) • Longer transit times Air Logistics Overview & Challenges 5th July 2007

  10. Implications • Rate competition with North Asia • Lack of space during peak seasons • Inaccurate statistics • Affect decision making • Perceived as only a hi-tech manufacturing base • Unattractive to other type of investors • Limited type of industries • Severely affected by major downturns in the hi-tech industry • Insufficient number of skilled workers • Affect professionalism, efficiencies, competitiveness Air Logistics Overview & Challenges 5th July 2007

  11. What is Required • Strengthen local security measures (transportation, warehouses, employees, etc.) • Ready infrastructure to prepare for projected growth (cargo terminals, Penang Bridge, public bonded warehouses, etc.) • Attract more carriers (cargo, as well as passenger) directly into Penang • More comprehensive and relevant trade statistics • Expand growth opportunities for other industries (wood based, rubber, garments, etc.) Air Logistics Overview & Challenges 5th July 2007

  12. What is Required • Expand pool of skilled workers • Can we be the gateway for Southern Thailand? • Find a balance amongst all these • Collaboration, not competition amongst all parties, i.e. state government, MAB, MAS/KLAS, carriers, manufacturers and 3PLs/forwarders (the competition is out there, not in here) • State government to take the lead Air Logistics Overview & Challenges 5th July 2007

  13. Thank You Air Logistics Overview & Challenges 5th July 2007

  14. MAB Statistics Air Logistics Overview & Challenges 5th July 2007

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