Logistics in Malaysia_s Maritime Industry

Logistics can be defined as the process of movement and distribution of goods and products between places. The scope of this movement and distribution typically spans part or all of a company’s supply chain. Through the use of logistics, an organization can maximize its efficiency and output and thus receive more profit and revenue. Logistics plays a critical role in both the domestic and international economies. Without logistics, many business activities all over the world could not possibly be conducted.


Logistics’ as a key player

One important function of logistics is that of order processing. When a buyer makes a purchase order to a supplier, the order must be processed as soon as possible. Speed is of the essence because the order has a direct relationship with performance cycle time. Performance cycle time indicates when the order is to be received as well as when the customer is to receive the relevant objects.

Warehousing is another key function of logistics. Proper warehousing procedures will ensure that warehouses are located strategically and in areas from where many customers can be efficiently reached. Once a brand or company establishes a business presence in a new region, territory, or country, it will often lease a new warehouse to make itself closer to end customers. Through the use of logistics, the burden on mother warehouses will also be reduced. This is because through warehousing operations conducted by those in logistics, the number of deliveries from mother warehouses will be reduced and thus make it more likely for customers to receive their goods promptly.


How is logistics contributes to nation’s growth

Logistics is crucial to the success of Malaysia’s maritime industry. Maritime logistics in this country has seen many changes, improvements, and developments. The high margins and increased demand levels have served to accelerate the growth of logistics in Malaysia. Malaysia is currently attempting to become a global transshipment hub. The country’s strategic location places it in an opportune position to become such a hub. When combined with the low cost for docking which exists in Malaysia today, it can clearly be seen that maritime logistics in Malaysia is ripe for further expansion and development.

The government of Malaysia has devoted much money to the growth of the transport and logistics sector. The Eleventh Malaysia Plan which was in place from 2016 to 2020 saw much government investment in the development of all logistics, including maritime logistics, in Malaysia. 

The logistics market in Malaysia is rather fragmented, which can sometimes make it difficult for key maritime logistics players to gain a foothold when competing with their land-based counterparts. Many independent logistics companies as well as logistics SMEs fill much of Malaysia’s logistics market space. However, large maritime logistics companies often make use of merger and acquisition techniques. By doing so, the market will become more consolidated; it will then be easier for the networks of maritime logistics providers all over Malaysia to expand.

Maritime logistics providers interact with other logistics providers in various ways. They often have to be closely involved with those involved in land-based logistics. This is because maritime logistics alone cannot always arrive at suitable end-to-end solutions to move, finance, and make sound decisions regarding the movement of freight. However, by working with land-based logistics providers, those in the field of maritime logistics can enhance their ability to supply customers with desired products.

There is also much collaboration between those in maritime logistics and postal logistics. Such collaboration typically exists in the form of last-mile partnerships. These interactions and collaborations often make use of technological developments to become more dynamic and consistent, exhibiting high standards of accountability while doing so. By working with postal logistics providers, those in the maritime logistics industry can ensure that matters such as containerization and packaging will be suitably resolved. In some cases, such interactions might also even make clearing customs a simpler task.

Never before has the need for maritime logistics in Malaysia been greater. Malaysia’s dependence on the maritime industry as well as the country’s ports is increasing. As evidence of this fact, Malaysia’s two largest ports, Port Klang and the Port of Tanjung Pelepas, both rank within the top 20 busiest container ports in the world. Port Klang is 12th while the Port of Tanjung Pelepas is 18th. The growth of Malaysia’s annual throughput, the expansion of the country’s domestic supply chain, and the increased role of seaports in the Malaysian government’s economic plans make maritime logistics a critical element of Malaysia’s economic strategy and growth.

In addition, the oil and gas industry plays a vital role within Malaysia’s economy. 

According to the latest statistics, this industry contributes around 20% of Malaysia’s total Gross Domestic Product (GDP). As oil and gas products are typically extracted from the sea, maritime logistics providers are needed to send Malaysian oil and gas all over the country and world. In this way, they also create awareness about the role of maritime logistics within the industry and also increase logistics standards within it. Thus, it is only to be expected that a large number of maritime logistics providers in Malaysia are closely associated with the oil and gas industry.


Explore Logistics at Ranaco

By enrolling in Ranaco Education & Training Institute’s Diploma in Logistic & Supply Chain, you will gain a quality education which will fully immerse you in every key element of logistics. Graduates will leave this program with an extensive knowledge of marine industry logistics, serving them well as they take their first steps into this challenging but rewarding industry.

Students will learn about viable strategies and methods related to logistics and supply chains. Among the subjects covered are international trade, warehousing management, procurement and supply management, supply chain performance management, and demand management and customer services. Our graduates exhibit great skill and competence in dealing with any matter related to the delivery and supply of goods within the maritime industry.

Contact Ranaco Education & Training Institute for further information. We are always ready to listen to any queries.

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