Malaysia Logistics Market Research Report: Forecast (2024-2030)

Market Definition

Logistics refers to the management & transportation of goods from one place to another. It encompasses a variety of services including shipment, warehousing, inventory management, supply chain management, and order processing.  

Market Insights & Projections: Malaysia Logistics Market (2024-30):

Malaysia’s Logistics Market size is estimated to be around USD 28.88 billion in 2024. It is further expected to grow at a CAGR of around 5.4% during the forecast period, i.e., 2024-30. The increasing penetration of e-commerce platforms, the growing trade activities, and the rising focus of the government to make Malaysia a top exporter of essential commodities are resulting in higher demand for logistics solutions.

In recent years, internet penetration & smartphone accessibility in Malaysia has increased substantially due to the increasing fund allocation for improving the country’s digital infrastructure. As of 2024, there were around 33.59 million internet users and the internet penetration rate stood at 97.4%, according to Data Reportal. These higher smartphone ownership rates & improved internet connectivity created a conducive environment for e-commerce and other digital services, uplifting the adoption of e-commerce platforms. Along with this, the workforce in Malaysia is also rising significantly owing to which individuals are increasingly looking for online shopping platforms that provide them convenience and flexibility. As per the study conducted by Nielsen Malaysia, more than 87% of the individuals in the country rely on online shopping, highlighting the widespread acceptance of e-commerce. This inclination of consumers towards digital shopping platforms is generating the requirement for logistics services to deliver the products at the customer’s residence, thereby supporting market growth.

Along with this, some of the online retailers are actively working on delivering the products in a day or within an hour. Therefore, they are teaming up with the logistics service providers to provide quick deliveries of the commodities. These partnerships would further enhance the customer experience as they would receive the parcels at the earliest. Moreover, the top companies are further expanding their logistics network, which will continue to enlarge the market size.

Further, Malaysia is emerging as one of the premium locations for setting up a business due to the lower corporate taxes, and availability of inexpensive labor. Also, the nation is surrounded by pivotal Asian countries, which are crucial markets for companies to boost their revenue growth. Therefore, several enterprises are setting up their businesses in Malaysia. The expansion of foreign organizations accentuates the need for adequate logistics services to ensure that their products are moved efficiently between locations. Additionally, several local companies are planning to expand their footprint within Malaysia by strengthening their supply chain & utilizing logistics services. Thus, with the expansion strategies of the domestic as well as international enterprises, the demand for logistics solutions would continue to increase, uplifting market growth in the forthcoming years.

Malaysia Logistics Market Driver:

Rising Trade Agreements With Other Nations Enhances the Market Growth – The appropriate geographic location of Malaysia makes it a perfect trading destination since it connects the Indian Ocean to the west and the Pacific Ocean to the east. Along with this, the governing bodies of Malaysia have also recognized the importance of international trade since it helps in boosting the country’s economy. Based on the statistics by Exinpedia, the country exported goods worth USD312.7 Billion in 2023. Therefore, the authorities are increasingly signing trade pacts with countries, such as Australia, Chile, India, etc., and encouraging the exports of the products. The trading of the products requires logistics services to handle cross-border transportation, customs clearance, and international shipping. Also, the foreign ministries are laying plans to make Malaysia a top exporter by signing agreements like the ASEAN Free Trade Area (AFTA), the Malaysia-Iran Preferential Trade Agreement (MIPTA), etc. Thus, with more trade activities in Malaysia, there would be a need for logistics services that help in inventory management, and improve supply chain solutions.

Malaysia Logistics Market Opportunity:

Future Sustainable Goals to Uplift the Demand for Green Logistics Services- In recent years, the emissions due to transportation & industries have increased in Malaysia. In 2022, the overall greenhouse emissions reached around 353.91 Million tons, an increase of about 6% compared to the previous year, stated the International Energy Agency. These emissions are harmful to human health & environment. Therefore, the national environment protection agencies are actively encouraging companies to use sustainable solutions to minimize their carbon footprint. Thus, the top companies are taking measures to align with the sustainability goals. The end-user industries are signing the corporate sustainability goals. Owing to this, there would be a need for green logistics services. Thus, market players are planning to use energy-saving vehicles, optimize transportation costs, and improve warehouse energy use. This, in turn, would make the whole logistics process more energy-efficient. Hence, the transition towards low-emission strategies would provide an opportunity for the market players who are incorporating sustainability principles into the logistics and supply chain processes.

Malaysia Logistics Market Challenge:

Port Congestion in Malaysia Hampers the Market Growth- Malaysia has insufficient port infrastructure, such as inadequate berth space and outdated equipment. Along with this, the ports in Malaysia have insufficient port storage owing to which higher congestion is witnessed. Additionally, geopolitical tensions have negatively impacted the trade via sea or oceans, which is leading to port overcrowding. Also, the blockages in cargo handling, customs clearance delays, and inefficiencies in port operations are slowing down the movement of goods, which is further contributing to port congestion. This persistent port traffic is leading logistics companies to increase their freight rates as they adjust their pricing to manage delays and capacity constraints. These delays are also leading to dissatisfaction among customers, potentially affecting business reputation and customer loyalty. As a result, individuals are opting for other freight modes to ensure that the package is delivered on time, restraining the growth of the logistics companies specializing in Sea Freight.

Malaysia Logistics Market Trend:

Integration of AI & ML in the Logistics Delivery Application to Uplift Market Growth– In recent years, consumers have become very concerned about the packages that are to be delivered or received. Therefore, the top companies have launched online platforms based on emerging technologies, like Artificial Intelligence (AI) & Machine learning (ML) to provide consumers with real-time package tracking options. This application eradicates the worries of the consumers since it provides individuals with the number & other crucial details of the delivery personnel. Moreover, these platforms also inform the consumers in case of delays or any other situation. Also, in case the consumers are unavailable at one location, they can also contact and ask the associated delivery partner to deliver at another location.

Further, to maintain security & ensure that the package is delivered to the right place and to the correct person, the One Time Password is shared through messages or mobile applications. These new features are helping to gain consumer trust. Thereby, encouraging more companies to capitalize on the trend and launch their online delivery tracking application & supporting market growth.

Malaysia Logistics Market (2024-30): Segmentation Analysis

The Malaysia Logistics Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2024–2030 at the country level. Based on the market analysis, the market has been further classified as:

Based on the Model:

• First-Party Logistics (1 PL)
• Second-Party Logistics (2 PL)
• Third-Party Logistics (3 PL)
• Fourth-Party Logistics (4 PL)

Among them, 3 PL holds a dominant market share owing to the advantages offered by these services. This particular logistics model helps in providing a comprehensive range of logistics services to the customers. Along with this, the third-party logistics providers also manage the functions on behalf of the end-users, often integrating with the client’s supply chain systems. Therefore, the problems or queries related to the supply chain are resolved by the logistics service provider rather than the end-users.

Further, the entire supply chain is managed by a third party, thereby, allowing the end-users to focus on their core business activities. Moreover, these services are cost-effective as they help in reducing the end-users capital investment and operational costs. Therefore, industries looking for economically viable, scalable, and specialized logistics expertise without the need to manage logistics operations internally prefer the 3PL services, supporting market growth.

Based on End User:

• Healthcare & Pharmaceuticals
• Construction
• Energy & Chemicals
• Retail & E-Commerce
• Food & Beverage
• Consumer Goods
• Others

Among them, Food & Beverage holds a notable market share. Food products are generally perishable in nature and require strict temperature control to prevent spoilage and foodborne illnesses. Therefore, timely delivery of food products to guarantee that consumers receive fresh and high-quality goods becomes critical for these industries. Moreover, Malaysia experiences an extreme temperature. As a result, the distribution of food products across the country must take place fast and within a time limit to ensure the food is not degraded. Therefore, food manufacturers rely on adequate logistics partners to ensure that the food items are transported fast and are kept at the correct temperatures throughout transportation and storage.

Malaysia Logistics Industry Recent Development:

• 2024: FedEx: Announced its plans to expand its business in Malaysia and focus on the delivery of the products via air freight by using the existing facilities at several airports
• 2023: City-Link Express (M) Sdn Bhd:  Partnered with XL Holdings to expand chilled, frozen goods delivery services across the country.

Gain a Competitive Edge with Our Malaysia Logistics Market Report

• Malaysia Logistics Market Report by Markntel Advisors provides a detailed & thorough analysis of market size, growth rate, competitive landscape, and key players. This comprehensive market analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
• Malaysia Logistics Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.