The $153 billion market is so hot! Sea transportation and truck transportation will become the main cross-border transportation capacity in Southeast Asia

The COVID-19 pandemic has accelerated online spending in the region, with the market expected to reach $153 billion in sales by 2025, according to regional e-commerce logistics company J&T Express.

This was a prediction made before the pandemic, and as online shopping for goods continues to expand, J&T predicts that more goods will shift to ocean freight.

This shift will be driven primarily by consumers purchasing larger items and pressure on merchants to reduce shipping costs.

Such drives will become even more relevant with the recent announcement that low-value goods purchased online and imported (to Singapore) by air or post will be subject to Goods and Services Tax (GST) from January 1, 2023.

It is understood that J&T also has operations in Malaysia , Vietnam , the Philippines , Thailand , Cambodia and China. Since its establishment in 2015, its business has grown by 300% annually and it claims to be one of the fastest growing e-commerce logistics companies in these regions .

J&T believes that sea freight is becoming the main mode of transport in Southeast Asia , as anywhere beyond this will require longer delivery times.

In response to this shift, J&T ’s infrastructure and systems are seeking ways to better integrate retail , trade and logistics processes to support ocean shipping as a key link in the cross-border e-commerce supply chain.

However, in the current global shipping environment, the shortage of containers has had a significant impact on it , thereby pushing up the cost of completing cross-border e-commerce transportation.

In 2021, with the resumption of air cargo, the pressure on sea freight may be reduced.

On the other hand , due to the reduction in air cargo volume, some freight forwarders in Southeast Asia have also increased their freight volume to cross-border truck transportation .

For e-commerce , the use of road freight in Southeast Asia is somewhat limited compared to Europe , due to "customs clearance issues between different countries in Asia."

However, it cannot be ignored that there is a certain growth trend in cross-border truck transportation throughout Asia, and cross-border business in these countries is also favored due to lower transportation costs and relatively short delivery times.

There is also the recently launched ASEAN Customs Transit System , which many cross-border e-commerce players hope will improve the efficiency of cross-border truck transport.

logistics

Cross-border e-commerce market

Southeast Asia