SOUTH east Asia export growth may be slowing, but regional DHL Global Forwarding boss Thomas Tieber says it is still one of the world's fastest-growing markets where trucking has yet to play an expected leading role.
LTL and FTL services will tap into an acceleration of road freight growth in the Asia Pacific because of the launch of the Asean Economic Community (AEC) and China's 'One Belt, One Road" initiative, he said.
"A lot of economies in south east Asia are export driven and still growing and evolving," said Mr Tieber, DHL Global Forwarding CEO for ASEAN and South Asia.
"Thailand is a good example. It used to be low cost but now it's about 30 per cent electronics and automotive - so it has a diverse base," he told Lloyd's Loading List.
But because south east Asia consists of divergent economies at different levels of development, many challenges face attempts to serve the region's forwarding needs.
"As textile export companies have left Thailand in search of lower costs, they have tended to relocate to Vietnam, Bangladesh or Indonesia, but growth in Thailand has remained solid," Mr Tieber said.
"Indonesia lacks infrastructure and manufacturing tends to follow infrastructure. But in some areas it's growing in double digits, and there are new ports, airports and energy plants on the way.
"It also has a huge population and growing middle class. It has high logistics costs but reducing them is an opportunity. I think manufacturing will expand there," he said.
Meanwhile, Vietnam is booming - helped by legislation that is removing trade barriers and boosting exports. "We're seeing lots of large hi-tech companies settling near Hanoi," Mr Tieber said.
"The import business is linked to export industries. Parts come in and finished products such as mobile phones go out," he said.
"Then there are exports by all modes, including into China on an overland land bridge. Trucking has an important role."
Smoothing truck flow is a priority, he said. Last year DHL introduced an integrated road freight network linking five key Asian cities: Singapore, Penang, Bangkok, Hanoi and Shenzhen.
"International road freight is a good product and we have now connected 50 cities in Asia," said Mr Tieber. "We've also established procedures through Cambodia and we're looking at border crossings to Laos and how to connect Myanmar, where customs is still cumbersome."
DHL's cross-border trucking network will be greatly boosted if the trade benefits of the AEC launched last year are realised.
"No one expected it would work like the EU, but we'd like improvements to international trucking so we can offer international standards. Thailand is an obvious regional hub, but they need more focus on easing the burden of crossing borders and transit procedures," Mr Tieber said.
Source : HKSG.