The world's largest transportation and logistics corporations are actively seeking to acquire facilities in Asia, particularly in Vietnam, Malaysia, and India. Their aim is to assist their clients in expanding their supply chains beyond China.
Major logistics corporations are aggressively investing in facilities across countries like Vietnam, Malaysia, and India to diversify supply chains beyond China. This competition for acquiring assets is driven by the substantial cash reserves these transportation and logistics giants have accumulated during the COVID-19 pandemic. Disruptions in supply chains due to the pandemic and the rise of e-commerce spending have heightened the demand for logistics services.
Companies like Hapag-Lloyd from Germany and Møller-Maersk from Denmark are making significant investments in ports, warehouses, and other logistics infrastructure. These facilities aim to support the increasingly complex supply chains that are developing between countries such as Vietnam, India, and Malaysia.
Dheeraj Bhatia, overseeing Hapag-Lloyd's business operations in India, stated that competition to invest in these markets is intensifying as they attract more foreign manufacturers, who were previously focused on China. He emphasized that these regions are seen as essential options for diversification by companies worldwide.
The shift to reduce reliance on China and establish backup manufacturing lines has gained popularity among multinational companies from the West, the Middle East, China, and Europe. This trend stems from geopolitical disruptions and supply chain interruptions during the pandemic.
However, executives caution that alternative manufacturing centers in South and Southeast Asia require significant investment capital. While China continues to lead in transportation infrastructure capabilities, countries in South and Southeast Asia are rapidly expanding their capacity to accommodate growing cargo volumes.
The increase in growth comes from the surge in trade volumes from Asian countries outside of China. For instance, the volume of exported goods handled by Forto from Vietnam doubled from 2021 to 2022. Furthermore, there are predictions of rapid trade growth within Asian economies. UPS, an American logistics company, expects trade in Asia to more than double by 2030, reaching $13.5 trillion USD.
Logistics corporations like Kuehne+Nagel from Switzerland have shifted their regional headquarters from China to Singapore, indicating a focus on Southeast Asia's trade growth potential. Companies from China are also seeking new bases as the business environment shifts.
The push to invest in logistics infrastructure is driven by the changing dynamics of global trade, as companies aim to diversify supply chains and ensure operational resilience beyond China.
Kim Dung (FT)
Cre: vn.investing.com
