Building resilient ASEAN supply chains
VOV.VN - Significant logistics challenges remain in getting the entire ASEAN bloc fully in sync, said participants at a recent business forum in Hanoi discussing the status of the region’s supply chain.
![]() |
The marketplace for the ASEAN Economic Community (AEC) formed last year comprises the 10 nations of Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
In 2015, the AEC was collectively the third largest economy in Asia and the seventh largest in the globe, they said, noting the market has a population of 622 million people with a forecast annual GDP of more than US$2.6 trillion for 2016.
In 2015, intra-ASEAN trade and investment reached US$608.3 billion and US$24.4 billion or 24.1% and 17.9% of the total trade and foreign direct investment for the region, respectively.
In other words, roughly one out of every four dollars of trade and nearly one out of every five dollars of foreign direct investment within the region involved only members of the AEC 10 member countries.
The combined GDP of the region reached US$2.57 trillion in 2015, with average GDP per capita having nearly doubled since 2010 to US$4,135. The speakers said they expect that trade and investment within the region to remain robust during 2016.
But all Southeast Asia – including the AEC member countries – is at a logistical tipping point, with modernization and economic factors driving the need for installing a much more highly complex, modernized, sophisticated and efficient supply chain.
According to real estate analysts at the conference, the existing buildings in many of the emerging markets are old and were built to accommodate yesterday’s industries and are simply incompatible with the commercial needs and digital technologies of today.
Real estate facilities that contain key enabling technologies are crucial to the supply chain activities of the industrial landscape of tomorrow, they said, noting that Vietnam is leading the bloc in procuring the domestic distribution facilities needed.
Maritime Outlook
Ocean shipping lanes are also vital to achieving an effective supply chain network.
Most notably, they said the Mega ports in Singapore and Malaysia are already equipped to handle the new generation of supersized container vessels, which puts the region in a strong forward looking position.
The ASEAN Single Shipping Market plan signed earlier this year lays out a strategy to create an efficient ocean shipping network to facilitate the movements of goods throughout the ASEAN community and around the globe.
To achieve this vision, however, the ASEAN countries need to remove many existing barriers to logistics performance.
Ports in Thailand are also good, while the port quality in Indonesia, Philippines and Vietnam are currently lagging far behind Thailand, they said noting this is expected to change as the market adjusts to more trans-shipments in the region and the ASEAN Single Shipping Market plan given effect.
Air Cargo Outlook
The ASEAN aviation industry fills a crucial role in connecting the community and has a current combined investment schedule value of US$34 billion. The proposed development value is at varying stages of construction, with some already nearing completion and others at the planning stage and not due to be completed until 2020.
Vietnam is clearly the most proactive country in terms of investment in air transport, having attracted close to US$12 billion into seven projects.
Indonesia’s air cargo industry, meanwhile, is expected to benefit from a multilateral agreement on the opening of freight services between ASEAN countries—a move that promises to help increase air cargo volume by at least 50% in 2016 against last year.