As the world anticipated the arrival of Jan. 1, 2016, the 10 countries that make up the Association of South East Asian Nations (ASEAN) were poised for a New Year\u2019s Eve party with spe\u00adcial global trade significance. From that date on, goods, services, capital and skilled labor are supposedly flow\u00ading freely between the borders of the community members \u2013 Brunei, Cam\u00adbodia, Indonesia, Laos, Malaysia, Myan\u00admar, the Philippines, Singapore, Thai\u00adland and Vietnam \u2013 which make up a combined market of 622 million people.
\nIn 2014, ASEAN\u2019s GDP grew 4.4. percent, and the establishment of a single production and investment base was expected to unleash more po\u00adtential. Logistics operators geared up for rising traffic volumes. Kuehne + Nagel opened a 50,000-square-meter logistics hub in Singapore in January, which the company described as part of its regional expansion plan to sup\u00adport its fast growing supply chain cli\u00adentele operating within Singapore and the ASEAN countries. According to a study produced by the Australia and New Zealand Banking Group, ASEAN trade volume could exceed US$1 tril\u00adlion by 2025.
\nReality, however, has poured cold water on the party plans. No new freighter service linking two or more ASEAN countries has been launched since the start of 2016. Now that the single market has been established, forwarders within the ASEAN mem\u00adber countries are realizing that growth is unlikely to shoot through the roof. While this is an undisputed step for\u00adward, several obstacles still remain.
\nFor instance, although 95 percent of tariff lines are at zero, non-tariff barri\u00aders on goods and services still hamper cross-border trade. Consumer laws, in\u00adtellectual property rights and invest\u00adment rules have yet to be harmonized, and ASEAN\u2019s traditional emphasis on consensus, coupled with an organiza\u00adtion that has a tiny budget and virtually no teeth all but ensures that progress will be slow.
\nWithout a doubt, market integration will help propel airfreight traffic for\u00adward within ASEAN members, but the emphasis is clearly on the surface. Last summer DHL rolled out an integrated LTL service that links Singapore, Pen\u00adang, Bangkok, Hanoi and Shenzhen. Ac\u00adcording to the integrator, road freight is projected to grow in the Asia-Pacific region at a compound annual rate of 8.3 percent between 2014 and 2019.
\nAround the same time Agility intro\u00adduced daily time-definite haulage ser\u00advices in the region, such as a four-day run between Bangkok and Hong Kong and a six-day operation linking Bang\u00adkok to Shanghai. In its comments on the launch, management noted that, par\u00adticularly in the ASEAN region, trucking was increasingly regarded as an alterna\u00adtive to shipping by air or ocean carrier, despite some infrastructure and capac\u00adity issues.
\nThe significant differential in GDP, trade volume and traffic flows between ASEAN member states also induces logistics operators, as well as their cli\u00adents, to focus on individual markets and trade lanes rather than intra-ASEAN traffic as such. In 2013, Myanmar\u2019s trade amounted to US$23 billion, com\u00adpared with Singapore\u2019s tally of $783 bil\u00adlion.
\n\u201cWe do see some DHL customers with an ASEAN strategy. Some of these are in response to the AEC [single mar\u00adket], while others have been calibrat\u00ading their regional strategies for many years,\u201d said Jasmin Aladad Khan, ex\u00adecutive vice president, commercial and managing director of emerging markets, for DHL Express Asia-Pacific. Some of these strategies, she said, are borne out of strong ASEAN economies that have a history of unilateral trade and invest\u00adment policies established between indi\u00advidual member states, rather than any regional integration efforts. Vietnam and Cambodia, have drawn in new in\u00advestment as well as airfreight capacity, some of which is carrying regional traf\u00adfic, but much feeding longhaul depar\u00adtures to intercontinental markets.
\nOne example is Cathay Pacific\u2019s freighter to Phnom Penh, which has been doing particularly well on the in\u00adbound side, according to Mark Sutch, the carrier\u2019s general manager of cargo sales and marketing. The key traffic there consists of garment production accessories, such as fabric rolls and textiles. Exports are dominated by fin\u00adished garments headed to Japan, Hong Kong, the United States and Italy. Last year, Cathay\u2019s volume out of Cambodia climbed by 50 percent. \u201cThe long-term prospect is positive, as new factories are setting up for the production of electronic parts,\u201d Sutch remarks.
\nDHL Express is also preparing for stronger regional growth, as it ramps up capacity with the construction of an express facility at Singapore\u2019s Changi airport that is due to open later this year. The new facility will boost DHL\u2019s throughput threefold and increase pro\u00adcessing speed by six times.
\n\u201cCoupled with increasingly regional\u00adized manufacturing footprints, growing affluence, changing consumer behavior and the rise of e-commerce, we believe there will be increasing need for timely and rapid delivery services, giving the logistics and express industry ample op\u00adportunities to grow in the region,\u201d Khan said. \u201cWe are continuously enhancing our infrastructure and capacities, such as the upcoming South Asia hub, to meet the anticipated growing demand in the region.\u201d
\nKhan added that she would like to see liberalization make further head\u00adway, such as in the creation of an open skies policy within ASEAN.
\n\u201cDomestic legal regulations often constrain further liberalization, which hampers full integration and connectiv\u00adity. This would help cargo operators like DHL Express to operate a more cost-ef\u00adficient aviation network,\u201d she explained. \u201cOur position is that if liberalization of passenger traffic is too sensitive, then a gradual approach to liberalize cargo flights first might be undertaken.\u201d
\n\u00a0
\nSource: aircargoworld<\/p>\n","protected":false},"excerpt":{"rendered":"
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