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As ASEAN thrives as trading and economic hub region, logistics become more complex and more vital in horizontal and vertical integration. Today, investors are presented with wide ranges of possibilities as ASEAN pursues improved connectivity through various modes and access to ports, sophisticated logistics services, and skilled professionals in all aspects of supply chains.
The world’s busiest
World Bank ranked Singapore as a No. 1 logistics hub among 155 countries globally. Singapore scored 4.13 in the Logistics Performance Indicator (LPI) 2012, which uses a 1-to-5 scale (5 as the highest) in rating countries’ logistics.
Other ASEAN countries also performed well in the LPI, scoring more than 3 points. These include Malaysia, Thailand and the Philippines which got a score of 3.49, 3.18, and 3.02 respectively. The rest of the ASEAN countries improved their performances compared to previous years.
Major international airports prove critical to the efficiency of logistics in the region. The Changi Airport in Singapore is the largest cargo airport in the world. It handles 2 million tonnes of cargo annually, services 6,500 weekly flights, and connects 240 cities in 60 countries.
The Cargo Traffic 2010 Data shows the Bangkok’s and Kuala Lumpur’s international airports are as busy. Both are part of the world’s top 30 airports in terms of cargo traffic. Thailand’s Suvarnabhumi Airport handled over 1.3 million tonnes of cargo while the Kuala Lumpur International Airport boasts of almost 700,000 tonnes of cargo in the same period.
ASEAN is among the busiest in terms of transhipment. Singapore handles 1/7 of the world’s shipment throughput and handled a total of 31.2 million TEUs of containers in 2012. Six other container ports in ASEAN made it to the World Shipping Council’s list of top 40 container ports globally. These are Port Kelang and Tanjung Pelepas in Malaysia, Laem Chabang in Thailand, Tanjung Priok in Indonesia, Ho Chi Minh in Viet Nam, and Manila, Philippines.
Towards better logistics
Realising the rise in demands for improved logistics, ASEAN member states cooperate to facilitate the movement of goods and supplies across the region. Central to this are ASEAN’s transport-related projects and trade facilitation measures such as the ASEAN Single Window.
The ASEAN Single Window connects and integrates National Single Windows of the region’s member states with the objective of accelerating cargo clearances and improving transparency in doing business. It is now piloting the exchange of intra-ASEAN certificate of origin and ASEAN Customs Declaration Document among 7 countries in the region.
Owing to the transport-intensive nature of logistics, the ASEAN prioritizes projects connecting the region. The ASEAN Highway Network (AHN) will connect capitals, sea ports, airports and other areas with high potential for investment and tourism. It consists of 23 designated routes totalling about 38,4000 kilometres. The Singapore-Kunming Rail Link, on the other hand, will pass through Singapore-Malaysia-Thailand-Cambodia-Viet Nam-China (Kunming) through railway stations and related infrastructure.
Various transport facilitation agreements have also been signed, namely: (1) ASEAN Framework Agreement on the Facilitation of Goods in Transit, (2) ASEAN Framework Agreement on Multimodal Transport, and (3) ASEAN Framework Agreement on Facilitation of Inter-State Transport. There is also commitment to fully liberalise air freight services.
Logistics incorporates all industry sectors and covers a wide range of activities including cargo handling, customs processing, storage, warehousing, freight, transport, logistics services, among others. ASEAN invites investors to take advantage of the wealth of opportunities in this ever-growing industry.