MALAYSIA WAREHOUSING MARKET

KEY FINDINGS

• The Malaysian freight and logistics market size is estimated to reach USD 38.28 billion by 2030, growing at a CAGR of 5.28% during the forecast period (2024-2030).
• The transportation and storage sector in Malaysia experienced significant growth, jumping from 2.9% YoY in 2021 to a remarkable 33% YoY in 2022.
• The rising use of advanced technologies such as ASRS, WMS, bar-coding, cross-docking, efficient consumer response, and vendor-managed inventory
  is increasing the growth of the warehousing market.
• The rapid expansion of e-commerce in Malaysia has increased demand for warehousing facilities to store and distribute products efficiently.
• Malaysia’s manufacturing sector is thriving, particularly in industries like electronics, automotive, and food processing: require ample warehousing space.
• Increasing Consumer Demands put pressure on businesses to improve their supply chain efficiency, which often requires increased warehousing capacity.
• The Malaysian government has investment in infrastructure development, improved connectivity and accessibility, making Malaysia an attractive location for businesses and logistics operations.
• The Malaysian government offers various incentives and support programs to attract foreign and domestic investments in the logistics sector.

MALAYSIA WAREHOUSING MARKET DYNAMICS

The Malaysia warehousing market is characterized by a dynamic interplay of various factors. This includes the influence of economic conditions, technological advancements, and government policies. Here are some key dynamics:

• Economic Growth: The overall economic growth of Malaysia directly impacts the demand for warehousing services. When the economy is expanding, businesses often need more storage space for inventory and raw materials.
• Consumer Spending Patterns: Changes in consumer spending habits, especially driven by factors like e-commerce, can significantly influence the demand for warehousing facilities.
• Automation and Robotics: The adoption of automation technologies, such as automated storage and retrieval systems (ASRS) and robots, is transforming the warehousing industry. These technologies improve efficiency, reduce labor costs, and increase accuracy.
• Warehouse Management Systems (WMS): Advanced WMS software helps optimize warehouse operations, improve inventory management, and enhance supply chain visibility.
• Infrastructure Development: Government initiatives to improve transportation infrastructure, such as roads, railways, and ports, can directly impact the warehousing market. Better infrastructure facilitates the movement of goods and enhances the efficiency of warehousing operations.
• Tax Incentives: Government incentives, such as tax breaks or subsidies, can encourage investment in warehousing facilities and attract new businesses.
• E-commerce Growth: The rapid growth of e-commerce in Malaysia is driving the demand for warehousing facilities to support online retail operations.
• Manufacturing Trends: Changes in manufacturing trends, such as the rise of Automation, can impact the warehousing industry. For example, the need for more flexible and responsive warehousing solutions to support just-in-time manufacturing.

INTRODUCTION TO MALAYSIA WAREHOUSING MARKET

The transportation sector in Malaysia is integral to the nation’s socio-economic progress. Transportation and storage in Malaysia experienced significant growth, jumping from 2.9% YoY in 2021 to a remarkable 33% YoY in 2022. This surge was driven by rising demand for road transportation, mainly from the manufacturing sector, fast-moving consumer goods (FMCG) companies, and automotive players, as major companies in Malaysia expanded their production capacities. In 2022, for transportation and storage, there was a deficit of about MYR 32 million (USD 7.25 million) in net foreign direct investment inflows into the transportation and storage sectors in Malaysia.

The Malaysian government intends to transform its logistics services by centralizing the planning and development of its logistics hub, accelerating digital adoption, and encouraging industry mergers and acquisitions. Moreover, the Malaysian Investment Development Authority (MIDA) has approved more than 19 projects under the cold chain investment incentive scheme throughout the years.

MALAYSIA WAREHOUSING MARKET TRENDS

The Malaysia warehousing market is experiencing several key trends that are shaping its landscape:

Increasing Automation and Technology Adoption:

• Automated Storage and Retrieval Systems (ASRS): ASRS are becoming increasingly common in Malaysian warehouses, improving efficiency, reducing labor costs, and increasing accuracy.
• Warehouse Management Systems (WMS): Advanced WMS software is being adopted to optimize warehouse operations, improve inventory management, and enhance supply chain visibility.
• Robotics: Robots are being used for tasks such as picking, packing, and transportation, further automating warehouse processes.

Growing Demand for Value-Added Services:

• Packaging and Labeling: Warehouses are offering packaging and labeling services to meet the specific requirements of different industries and products.
• Kitting: Warehouses are providing kitting services to assemble product components into kits for efficient distribution.
• Cross-Docking: Cross-docking operations are becoming more common, allowing for faster product movement and reduced storage time.

Sustainability and Green Practices:

• Energy Efficiency: Warehouses are implementing energy-efficient practices, such as LED lighting and solar panels, to reduce their environmental impact.
• Sustainable Materials: There is a growing focus on using sustainable materials in warehouse construction and operations.
• Carbon Footprint Reduction: Warehouses are adopting strategies to reduce their carbon footprint, such as optimizing transportation routes and minimizing waste.

E-commerce-Driven Growth:

• Increased Demand: The rapid growth of e-commerce in Malaysia is driving the demand for warehousing facilities to support online retail operations.
• Smaller Warehouses: E-commerce companies often require smaller, more flexible warehouses located closer to urban centers.

Focus on Cold Chain Warehousing:

• Pharmaceutical and Food Industries: The pharmaceutical and food industries are driving the growth of cold chain warehousing to ensure the safe storage and transportation of temperature-sensitive products.
• Advanced Technology: Cold chain warehouses are adopting advanced technologies, such as temperature monitoring systems and energy-efficient cooling solutions.

Outsourcing and Third-Party Logistics (3PL):

• Cost Savings: Businesses are increasingly outsourcing their warehousing operations to 3PL providers to reduce costs and improve efficiency.
• Flexibility: 3PL providers can offer greater flexibility and scalability to meet changing business needs.

NEW DEVELOPMENT IN MALAYSIA WAREHOUSING MARKET

• March 2024: Kerry Logistics Network Limited had acquired a majority stake in Business By Air SAS (‘BBA’), an upstream supply chain specialist in air freight services for diverse industrial clients in verticals including automotive, aerospace and pharmaceutical, as well as an established player in the African market, to strengthen KLN’s position in the EMEA region and international freight forwarding (‘IFF’) capabilities across the globe.
• January 2024: DHL Express has commenced services for the final Boeing 777 freighter deployed at the South Asia Hub in Singapore. With a payload capability of 102 tons, the aircraft joins the four other Boeing 777 freighters already deployed in Singapore to boost inter-continental connectivity between the Asia Pacific and the Americas. Sporting a dual DHL-Singapore Airlines (SIA) livery, these five freighters provide a total of 1,224 tons of payload capacity to meet growing customer demand for international express shipping services.
• January 2024: Kuehne + Nagel has announced its Book & Claim insetting solution for electric vehicles, to improve its decarbonization solutions. Developing Book & Claim insetting solutions for road freight was a strategic priority for Kuehne + Nagel. Customers who use Kuehne + Nagel’s road transport services can now claim the carbon reductions of electric trucks when it is not possible to physically move their goods on these vehicles.

MALAYSIA WAREHOUSING MARKET SEGMENTATION 

By Geographical Location:

• Urban Areas
• Rural Areas

By Type of Warehouse:

• Public Warehouses
• Private Warehouses
• Bonded Warehouses

By Industry Focus:

• Manufacturing
• Retail
• E-commerce
• Cold Chain

By Size and Scale:

• Small-Scale Warehouses
• Large-Scale Warehouses

By Value-Added Services:

• Basic Warehousing
• Value-Added Warehouses

By Technology Adoption:

• Traditional Warehouses
• Automated Warehouses

KEY PLAYERS IN MALAYSIA WAREHOUSING MARKET

• DB Schenker
• DHL Group
• FedEx
• J&T Express
• MMC Corporation Berhad

THIS MALAYSIA WAREHOUSING MARKET REPORT WILL ANSWER FOLLOWING QUESTIONS

1. What is the current size and growth rate of the Malaysia Warehousing Market?
2. What are the major drivers and challenges influencing the market’s growth?
3. What are the key trends shaping the market, such as sustainability and technology?
4. What are the key regulations and standards governing the Malaysia Warehousing Market?
5. What are the emerging trends in usage of Warehouse that are impacting the market?
6. What are the latest technological advancements used in Warehouse?
7. How are the technological  advancements impacting the market, in terms of cost, storage, and customization?
8. What are the environmental concerns associated with Warehouse, and how are owners addressing these concerns?
9. What are the trends in the use for sustainability aligned with Warehouse?
10. What are the key opportunities and challenges for the Malaysia Warehousing Market in the coming years?
11. How will the market evolve in response to changing usages, technological advancements, and regulatory developments?
12. What are the potential growth areas and emerging markets within the region?