Fuelled by a boom in e-commerce demand, ports growth, technological advancements, and sustainability concerns, the Asia-Pacific (APAC) logistics landscape is shaping up to be a market poised for significant growth and innovation opportunities. This chapter explores dissects the key trends developing in the region, its impact on the Malaysian logistics industry and the exciting opportunities for Telco companies like CelcomDigi to play a vital role in this evolution.

Demystifying Top 5 APAC Logistics Trends and Their Impact on Malaysia

The Asia-Pacific (APAC) logistics landscape is undergoing a dynamic transformation, driven by a confluence of factors such as:

1. The Rise of On-Demand Warehousing and Fulfilment
2. Integration of Blockchain for Transparency and Security
3. The Rise of Delivery Drones for Last-Mile Efficiency
4. Growing Prominence of Demand Forecasting and Analytics
5. The Rise of Collaborative Logistics and Platformization

The Rise of On-Demand Warehousing and Fulfilment

• Traditional warehousing models are evolving to cater to the needs of e-commerce and omnichannel retail. On-demand warehousing offers flexible storage space, efficient order fulfilment capabilities, and real-time inventory management. This trend is driven by the growing demand for faster delivery times and a wider variety of products according to Mordor Intelligence’s article, Asia Pacific Warehouse Automation Market – Opportunities and Strategies to 2027.
• Malaysian e-commerce market is expected to reach USD 27.4 billion by 2025 according to Statista. This necessitates a shift towards on-demand warehousing solutions to meet faster delivery expectations and manage a wider product range. Alongside this growth in e-commerce, Malaysia’s logistics market is projected to reach USD35.1 billion by 2029.
• On-demand warehousing directly addresses the challenges associated with the e-commerce surge by providing scalability and flexibility in storage and fulfilment, ultimately contributing to a smoother last-mile delivery experience.
• EasyStore, a leading e-commerce enabler platform in Malaysia, offers on-demand warehousing and fulfilment services to its merchants. This allows merchants to scale their operations efficiently and cater to the growing online demand.
• Telcos can partner with on-demand warehousing providers by offering reliable and secure data connectivity solutions. This ensures real-time inventory management, order processing, and efficient last-mile delivery fulfilment, directly contributing to overcoming the challenges of e-commerce logistics.

Integration of Blockchain for Transparency and Security

• Blockchain technology is gaining traction in APAC logistics due to its ability to provide secure and transparent tracking of goods throughout the supply chain. This reduces the risk of counterfeiting, streamlines customs clearance processes, and enhances overall visibility according to Technavio, Asia Pacific Blockchain in Supply Chain Market – Growth, Trends, and Forecasts (2022-2027)
• The Malaysian government is actively exploring the potential of blockchain for trade facilitation. Integrating blockchain can enhance transparency and efficiency in Malaysian logistics, boosting investor confidence and attracting international trade opportunities. This aligns with the trend of automation and technological advancements as blockchain represents a sophisticated tool for data management and security within the supply chain.
• One noteworthy example is Zetrix, a public blockchain platform launched by MYEG. Services. Zetrix aims to facilitate secure and transparent cross-border supply chain financing, showcasing Malaysia’s commitment to utilising blockchain technology to enhance efficiency and security within the logistics sector.
• Telcos can offer secure and high-bandwidth connectivity solutions to support blockchain implementation in logistics operations. Additionally, they can explore partnerships with logistics companies to develop blockchain-based solutions for specific needs, like anti-counterfeiting measures or track and trace functionalities.

The Rise of Delivery Drones for Last-Mile Efficiency

• Drone delivery is gaining momentum in APAC, particularly for last-mile deliveries in remote areas or congested urban environments. This technology offers the potential for faster delivery times, reduced costs, and improved accessibility according to MarketsandMarkets, Drone Delivery Market by Application (Retail, Healthcare, Logistics) – Global Forecast to 2027.
• While drone delivery regulations in Malaysia are still evolving, pilot projects are underway. Integrating drone delivery can offer significant advantages for last-mile logistics in geographically diverse areas like Malaysia, especially in remote areas that might face traditional last-mile delivery challenges. Additionally, drone delivery has the potential to reduce congestion in urban areas, further addressing last-mile challenges. Furthermore, drone delivery can potentially reduce the environmental impact of last-mile deliveries compared to traditional methods that rely on gasoline-powered vehicles. This aligns with the growing focus on sustainability within the logistics sector.
• Teleport, the logistics arm of AirAsia, has partnered with the Malaysian Global Innovation and Creativity Centre (MaGIC), the lead secretariat of the National Technology and Innovation Sandbox (NTIS) to launch the Urban Drone Delivery Sandbox and develop a long-term viability plan of urban drone delivery service. This pilot project demonstrates the potential of drone delivery in overcoming geographical challenges and improving access to essential goods in remote areas of Malaysia. The success of these pilot projects can pave the way for wider adoption of drone delivery in Malaysia, particularly for specific applications like medical supplies or urgent deliveries in congested areas.
• Telcos can play a crucial role by providing reliable and robust cellular network coverage, especially in remote areas, to power and scale drone operations. Additionally, they can explore partnerships with drone delivery companies to develop and test innovative solutions for the Malaysian market. This could involve exploring drone traffic management systems, integrating drone delivery functionalities into existing logistics platforms, or developing solutions for data security and privacy concerns specific to drone deliveries.

Growing Prominence of Demand Forecasting and Analytics

• Logistics companies in APAC are increasingly leveraging data analytics and artificial intelligence (AI) to improve demand forecasting – keeping up with the growth of e-commerce, and a much more rapid sales cycle of goods. This allows for better inventory management, optimised transportation routes, and proactive planning for peak seasons according to MarketsandMarkets, Logistics Analytics Market by Technology (Machine Learning, Big Data, IoT) – Global Forecast to 2027.
• Accurate demand forecasting is crucial for Malaysian logistics companies to optimise resource allocation and avoid stockouts or overstocking. Implementing data analytics can enhance efficiency and cost savings across the supply chain. This trend aligns with the broader focus on automation and technological advancements as data analytics plays a critical role in optimising various aspects of logistics operations.
• Westports Holdings, a leading port operator in Malaysia, leverages data analytics to enhance cargo handling and forecast container throughput across its terminals at Port Klang. This data-driven approach allows them to optimise resource allocation, predict container volume, and improve overall operational efficiency which lead to a 20-50% reduction in vessel waiting times and a 10-30% increase in throughput capacity.
• Telco can offer secure and high-speed connectivity solutions to support the growing demand for data analytics in logistics. Additionally, they can partner with logistics companies to develop cloud-based platforms and data management tools specifically designed for demand forecasting and supply chain optimisation.

The Rise of Collaborative Logistics and Platformization

• Collaborative logistics platforms are emerging in APAC; connecting shippers, carriers, and logistics service providers in a digital marketplace. Collaborations of this nature helps optimise resource utilisation, and improves overall supply chain visibility according to MarketsandMarkets, Collaborative Logistics Market – Global Forecast to 2027.
• Malaysian logistics companies can benefit from participating in collaborative logistics platforms. This allows them to access a wider network of partners, improve capacity utilisation, potentially reduce their overall logistics costs, and contribute to a more efficient regional logistics network. This trend aligns with both the focus on automation and technological advancements through the use of digital platforms, and Malaysia’s ambitions to become a regional logistics hub by facilitating greater connectivity and collaboration within the logistics sector.
• The Malaysian government, through initiatives like the National Logistics and Trade Facilitation Masterplan Plan is actively promoting the adoption of digital platforms in the logistics sector. Through policies like streamlining regulations for tech solutions and promoting electronic trade documents, the plan fosters collaboration within the logistics sector, further supporting the country’s aspirations of becoming a regional logistics hub.
• Telcos can play a key role by supporting the development and adoption of collaborative logistics platforms in Malaysia. This can involve offering connectivity solutions, cloud services, and application programming interfaces (APIs) to facilitate seamless data exchange between different platforms and logistics participants.

Disruptive Tech Adopted by the Market Regionally in Logistics

Here’s a comprehensive look at five key disruptive technologies shaping APAC logistics, along with the potential roles for Telcos.

1. Blockchain
2. Artificial Intelligence (AI) and Machine Learning (ML)
3. Internet of Things (IoT) and Sensor Technology
4. Robotics and Automation
5. Cloud Computing

Blockchain for Enhanced Transparency and Security

• Applications: Provides a secure platform for tracking goods throughout the supply chain, reducing counterfeiting, streamlining customs clearance, and improving visibility for all stakeholders. (e.g., DHL Singapore, utilises blockchain for tracking goods). This can significantly benefit e-commerce logistics by ensuring product authenticity and expediting delivery processes.

• Telco’s Role: Offer secure and high-bandwidth connectivity, develop expertise in data management and security protocols for blockchain in logistics. Partner with stakeholders like logistics companies and government agencies to implement solutions for trade finance, anti-counterfeiting measures (and secure data exchange across the logistics ecosystem.

Artificial Intelligence (AI) and Machine Learning (ML) for Optimised Operations

• Applications: Optimises several functions like demand forecasting, route optimisation and predictive maintenance. AI & ML can address challenges associated with e-commerce surges by predicting consumer demand patterns through analysis of massive datasets (e.g., JD.com, China, utilises AI for dynamic inventory management). They also reduce transportation costs and emissions by analysing real-time traffic data and weather conditions (e.g., Singapore Post leverages AI to optimise delivery routes). Furthermore, they minimise downtime by analysing sensor data from vehicles and equipment to predict potential failures (e.g., SF Holding, China, uses AI for predictive maintenance of their delivery fleet).

• Telco’s Role: Provide reliable and high-speed connectivity to support seamless real-time data transmission. Develop secure cloud platforms for AI model training and deployment. Partner with logistics companies to develop customised AI solutions for specific needs, like congestion management in urban deliveries or optimising warehouse layouts.

Internet of Things (IoT) and Sensor Technology for Real-Time Visibility

• Applications: Provides real-time data for various aspects such as Warehouse management and Transportation delivery. IoT and Sensor Technology improve efficiency through inventory tracking, space optimisation, and enhanced picking and packing processes (e.g., Nippon Express, Japan, utilises IoT for smart warehouse management). Moreover, they enable temperature monitoring for temperature-controlled goods (critical for cold chain expansion), location tracking of shipments, and real-time route optimisation based on traffic conditions (e.g., Kerry Logistics, Hong Kong, leverages IoT for real-time shipment tracking).

• Telco’s Role: Offer low-power wide-area networks (LPWAN) specifically designed for IoT applications in logistics. Develop secure communication protocols for data transmission between sensors and cloud platforms. Partner with logistics companies and sensor manufacturers to design and implement comprehensive IoT solutions, including data management and integration with existing systems.

Robotics and Automation for Enhanced Efficiency and Safety

• Applications: Automates tasks in warehousing (picking, packing, sorting) and delivery (autonomous delivery vehicles). They improve efficiency and accuracy with warehouse robots (e.g., Alibaba, China, utilises warehouse robots for faster order fulfilment). They also address labour shortages and potentially reduces costs with autonomous delivery vehicles (e.g., trials conducted by JD.com and Cainiao in China).

• Telco’s Role: Offer secure and reliable communication channels for remote control and data transmission of robots. Provide high-bandwidth connectivity for real-time monitoring and management of automated systems. Collaborate with stakeholders (logistics companies, robotics manufacturers) to integrate communication technologies for seamless operation of automated solutions, ensuring safety and efficiency.

Cloud Computing for Scalability and Data-Driven Decision Making

• Applications: Offers on-demand storage and computing resources, enabling logistics companies to scale their IT infrastructure efficiently and leverage data analytics for better decision-making. Cloud computing allows logistics companies to easily adjust their IT resources based on fluctuating demand during peak seasons like holidays. It also enables better decision-making through insights gained from analysing logistics data like route optimisation and customer behaviour patterns.

• Telco’s Role: Provide secure and reliable cloud services with scalability. Partner with logistics companies to develop data management strategies and implement data analytics tools for optimizing operations like delivery routes and gaining valuable insights like customer demand forecasting to make data-driven business decisions

Leading Case Studies / Best Practices in APAC Logistics

Building on the disruptive technologies discussed earlier, here are some prominent case studies showcasing their successful application in APAC logistics.

Blockchain:

• Provenance Blockchain Platform by IBM Food Trust (multiple locations across Southeast Asia): This blockchain platform focuses on improving transparency and traceability within the food supply chain. It allows participants, from farmers to retailers, to track the movement of food products securely, providing consumers with greater confidence in the origin and quality of their food. Several Southeast Asian companies, including CP Foods (Thailand) and METRO Indonesia, have adopted the Provenance platform. CP Foods has reported a 20% reduction in food fraud incidents by leveraging the platform’s tamper-proof tracking capabilities.

Artificial Intelligence (AI) and Machine Learning (ML):

• JD.com’s AI-powered Demand Forecasting (China): E-commerce giant JD.com utilises AI algorithms to analyse vast amounts of customer data. This allows them to forecast demand patterns with high accuracy, enabling them to optimise inventory management and resource allocation across their vast logistics network. By anticipating demand surges, JD.com can ensure they have the necessary stock readily available, minimising stockouts and improving delivery times for customers. JD.com credits AI with a 20% reduction in inventory holding costs and a 15% improvement in on-time delivery rates.

Internet of Things (IoT) and Sensor Technology:

• Nippon Express’ Smart Warehouse Management System (Japan): Nippon Express leverages a comprehensive IoT solution to optimise warehouse operations. Sensors track inventory levels, monitor environmental conditions, and guide warehouse robots in picking, packing, and sorting tasks. Real-time data from these sensors is integrated with a central platform, providing Nippon Express with complete visibility into their warehouse operations. This allows them to identify inefficiencies, optimise space utilisation, and streamline picking and packing processes, leading to significant improvements in overall warehouse efficiency and order fulfilment speed. Nippon Express reports a 30% increase in warehouse picking accuracy and a 25% reduction in order fulfilment time through their IoT implementation.

Robotics and Automation:

• Alibaba’s Warehouse Automation (China): Alibaba, a leading e-commerce player, has heavily invested in warehouse automation to address rising order volumes and enhance fulfilment speed. Their warehouses utilise a network of robots for various tasks. This automation not only significantly increases efficiency and throughput but also reduces reliance on manual labour. Alibaba estimates that warehouse automation has increased their order fulfilment capacity by 50% while reducing labour costs by 20%.

Cloud Computing:

• SF Holding’s Cloud-based Logistics Platform (China): SF Holding, a major logistics provider in China, utilises a cloud-based platform to manage its extensive logistics network. This platform leverages cloud computing’s scalability to handle fluctuating demand volumes efficiently, particularly during peak seasons. Additionally, SF Holding integrates data analytics tools that utilize logistics data to identify optimisation opportunities and make data-driven decisions. By analysing data on delivery routes, traffic patterns, and customer behaviour, SF Holding can optimise delivery routes, improve resource allocation, and provide better customer service. SF Holding reports a 10% reduction in delivery times and a 15% increase in customer satisfaction through data-driven optimisation using their cloud platform.

Blockchain:

• DHL Singapore tracks goods by blockchain platform by Accenture (Singapore): DHL has actively participated in blockchain pilot projects worldwide, demonstrating its commitment to innovation. For instance, DHL Singapore partnered with Accenture to develop a blockchain-based prototype for pharmaceutical supply chain tracking, achieving a reported 20% reduction in counterfeit medications. This platform utilises tamper-proof ledgers to securely record the movement of goods throughout the supply chain. Stakeholders (shippers, carriers, customers) could access real-time information on the location, status, and condition of their goods, enhancing visibility and reducing risks This has enhanced transparency and traceability across logistics operations, paving the way for future implementations like goods tracking within specific regions.

Key Takeaways

• Disruptive technologies like AI, blockchain, and IoT are transforming APAC logistics, enabling greater efficiency, transparency, and security across the supply chain.
• Early adopters are reaping significant benefits, including reduced costs, improved delivery times, and enhanced customer satisfaction.
• Telcos like CelcomDigi have a crucial role to play in facilitating the adoption of these technologies by providing secure connectivity, cloud platforms, and data management expertise.