The Myanmar freight and logistics market is estimated to be valued at more than USD 4 billion and is anticipated to grow at a CAGR of more than 7. 5% during the forecast period. - The logistics sector in the country is under transformation, driven by the increasing trade activity, improving connectivity, and entry of major international players.
New York, Feb. 09, 2021 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "MYANMAR FREIGHT AND LOGISTICS MARKET - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06020206/?utm_source=GNW
- Lack of proper transport infrastructure has hindered the growth of the logistics sector in the country for many years. However, the ongoing developments in the country present a lot of opportunities for the logistics players.
- The strategic geographical location of the country is an important factor in attracting investments. The location of the country has a special significance in the Asia-Pacific region, connecting the two major economies of China and India. The country acts like a continental bridge connecting the regions of South Asia, East Asia, and Southeast Asia.
- Most of the logistics players in the country, more than three-fourths of them are involved in provision of common services, such as unloading, loading, customs clearance, and forwarding services, while the remaining companies provide value-added services, such as labeling, shipment tracking, and cold storage. As the demand for these services is growing, more number of companies are adding these kind of services to their existing business portfolio.
Key Market Trends
Road Transport Sector is the Dominant Mode of Transportation
Road freight transportation has been emerging as a leading mode of freight transportation in the recent years along with shipping and inland water transport. Road transport is the dominant mode of domestic transportation, helping connect rural areas and support regional and international trade.
The road network in Myanmar is comparatively weak and underdeveloped among the ASEAN nations, with more than half of the road network being unpaved. The improper infrastructure coupled with the lowest motor vehicle penetration in Southeast Asia results in high transportation costs and long travel times. This makes the trucking costs in the country comparatively higher than other countries in ASEAN.
Lack of focus in the road infrastructure and underinvestment stood as the major hurdles in the road freight transport sector for a very long time in Myanmar. In recent years, the government has realized the importance of logistics infrastructure and thus, has started paying attention to the improvement of road infrastructure. This act is expected to increase the usage of the roads for logistics activities in the future.
Most of the traffic in the country occurs along the Yangon – Mandalay – Muse – Kunming corridor. Traffic volumes at the border amount to 1,000-1,500 trucks per day.
Cross-border trade has been gaining more importance across the Southeast Asian region and has become the key for increasing trade activity and economic development. All the countries in the region have joined hands and created a cooperative development to increase competitiveness altogether. In this context, the cross-border trade is expected to be a major driver of the Myanmar trucking industry.
Increasing Investments in Construction Sector to Stimulate the Growth of the Market
A combination of good economic growth forecast and location makes the country a favorable destination for investment including for the construction projects.
With the rising labor costs in China, many international companies are looking to shift their manufacturing facilities to ASEAN region. Myanmar offers a promising economic environment for construction and real estate investors.
Logistics play a vital role in the construction projects in the movement of materials and equipment. For example, movement of precast concrete structures from plant to the construction site. Efficient logistics can enhance productivity and have impact on the overall project cost and time.
The Myanmar construction industry has experienced growth rates of more than 10% in the recent years and a lot of large investments are expected to flow into Myanmar’s construction sector in the future. The construction sector of the country was valued at USD 9.5 billion in 2018, at more than 16% of the nation’s GDP.
The freight and logistics market in Myanmar is fragmented with a large number of enterprises. The major players for freight transport and logistics services are private companies, except the railway freight operation undertaken by Myanmar Rail (MR) and the inland waterway transport operation undertaken by large-sized vessels of around 1,000 DWT by the Inland Waterway Transport (IWT). Most of the companies operating in the logistics sector of the country are small and medium-sized enterprises. Yusen Logistics, DB Schenker, DHL, CEA Project Logistics, EFR Group are some of the prominent logistics players active in the market.
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