By Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
KOTA KINABALU: The logistics, transport, and supply chain sectors globally are fundamental drivers of economic and societal progress, with profound and multi-layered socio-economic impacts.
Economic Growth and Development
- Logistics efficiency is closely tied to economic productivity, enhancing the utilization of space, labour, and capital.
- The interplay between infrastructure development and skilled workforce investment is essential for sustainable economic growth.
Urbanization and Demand Dynamics
- Rapid urbanization, with cities driving 65% of global GDP growth by 2025, demands innovative logistics solutions.
- The rise of e-commerce and omnichannel retail necessitates agile supply chains and last-mile delivery innovations.
Labour Market Dynamic
- A critical shortage of skilled workers, particularly in trucking and operations, affects industry efficiency.
- Automation and AI offer potential solutions but raise concerns about job displacement and the need for reskilling.
Sustainability and Social Responsibility
- Reducing carbon footprints and ethical sourcing are growing imperatives, alongside embracing circular economy practices.
- Addressing forced labour and improving working conditions in supply chains is both a moral and strategic necessity.
Geopolitical Factors
- Geopolitical instability disrupts supply chains, prompting shifts toward near-shoring and diversified sourcing.
- Trade conflicts and sanctions necessitate adaptive strategies for resilience.
Technological Advancements
- Technologies like AI, blockchain, and IoT improve efficiency, visibility, and decision-making.
- However, the costs of adoption and cybersecurity risks remain significant barriers for many.
Economic Volatility and Resilience
- The COVID-19 pandemic and geopolitical events have underlined the importance of robust and flexible supply chains.
- Strategies like multi-sourcing and enhanced visibility are being adopted to mitigate future disruptions.
Malaysia’s Context
Malaysia has experienced notable progress in logistics but faces distinctive challenges:
- SMEs are burdened by high logistics costs, affecting profitability and competitiveness.
- Regulatory inefficiencies, limited access to skilled labour, and reliance on major trading partners such as China exacerbate vulnerabilities.
- Despite a competitive logistics sector, further investment is constrained by high existing capital inflows.
Sabah’s Context
Sabah’s logistics challenges hinder its economic potential:
Port Congestion
- Kota Kinabalu Port suffers from congestion and additional surcharges, inflating costs for businesses.
Infrastructure Gaps
- Sapangar Bay Container Port’s operational limitations cause delays and inefficiencies.
High Logistics Costs
- Logistics costs in Sabah are significantly higher than in Peninsular Malaysia, impacting business viability.
Cold Chain Deficiencies
- The absence of robust cold chain logistics limits export capabilities for perishable agricultural goods.
Limited International Connectivity
- Heavy reliance on feeder services increases transit times and costs.
SME Limitations
- Limited access to advanced logistics technologies restricts productivity and competitiveness.
Urban Transportation
- Kota Kinabalu faces challenges in public transportation integration and rising vehicle ownership, affecting mobility and logistics.
Leadership Insights
Addressing these socio-economic impacts demands:
- Strategic Investments: Prioritize infrastructure upgrades, cold chain logistics, and international connectivity.
- Policy Reforms: Streamline regulatory processes, incentivize technology adoption, and enhance skill development.
- Sustainability Initiatives: Promote green logistics, such as electric or hybrid transportation and circular supply chains.
- Public-Private Partnerships: Leverage collaborations between government entities, academia, and industry players to foster innovation and efficiency.
- Technological Integration: Facilitate access to cost-effective technologies, particularly for SMEs, to enhance competitiveness.
Conclusion
The socio-economic landscape of the logistics industry is marked by opportunities and challenges. For Malaysia and Sabah, adapting to global trends while addressing local issues is crucial for realizing the sector’s full potential. Leadership in logistics requires forward-thinking strategies that balance innovation, resilience, and inclusivity to ensure sustainable growth and regional competitiveness.
