Kuala Lumpur, Malaysia: Sweeping changes are already changing the face of trade, and those unprepared for even bigger changes when liberalisation and economic integration run at full pace will lose out, participants at a shippers’ conference were told.

“The need to adjust to the new dynamics arising from the looming ASEAN Free Trade Area and ASEAN Economic Community initiatives, and the liberalisation of the region’s transport and logistics sector cannot be overemphasised,” said Nazery Khalid, Senior Fellow at the Maritime Institute of Malaysia (MIMA) who spoke at the National Shippers Conference 2009 on November 19, 2009.    

Mr Khadlid said that changes emanating from globalisation, liberalisation, consumer behavior, developments in ICT, production trends, and increasing demands from society for businesses to be conducted in a socially responsible and environmentally friendly manner  were already reshaping the business, economic and trade landscape and would continue to do so in the years ahead.

It is therefore imperative that trade transport policies are aligned to suit the dynamics arising from these changes, Mr Khalid noted.

“This is especially so in a country like Malaysia whose economic growth is dependent on trade,” he said.

The importance of trade transport policies is underscored by the fact that global production and consumption patterns of goods and materials and the “global division of labor” have rendered logistics and supply chain management as key in determining business and trade competitiveness.

“Changing production trends such as just-in-time and the focus on zero inventory and agile supply chains require good trade transport policies to make them work,” continued Mr Khalid.

“With a set of business- and trade-friendly transport policies, shippers can reduce inventory, lower transportation cost, make better forecasts, increase efficiency of delivery of goods and serve their customers better.”

As production activities are increasingly outsourced, as nations expand their trade with faraway trading partners, and as markets are “flattened” and consumer preferences change, the need for speedy and efficient delivery across the supply chains have become more pronounced.  

“The focus of producers and manufacturers has shifted from merely delivering goods on a ‘port-to-port’ basis to a ‘door-to-door’ basis,” said Mr Khalid.

This, he said, would require a new approach in planning trade transport policies to enable goods to be delivered farther, in greater volumes, more safely, at greater efficiency and at more competitive costs.

“The increasingly complex and extensive supply chain demands transportation of trade and goods to be handled by expert transport operators,” said Mr Khalid. “Modern-day methods of producing materials and goods underline the emphasis given by producers and manufacturers to minimise transportation and inventory costs and to supply their ever-growing markets without let or hindrance,” he added.  

Staying competitive

According to Mr Khalid,  for Malaysia exports to be competitive and for the country to improve its position as one of the top twenty trading nations, it must “pull all the stops” to put in place a good set of trade transport policies to facilitate the smooth flow of goods in and out of the country.

“Good trade transport policies is key to attracting investors and businesses to Malaysia and is a primer for business and trade competitiveness,” he said.

The development of multimodal transport is partly fueled by this demand, as transport operators take up the challenge of their customers to deliver faster, more, further and cheaper. 

“In today’s globalised world, trade barriers are fast coming down and demand for goods come from all corners of the world. These require policymakers, shippers, logistics service providers and transport operators to step up the plate to cater to the new dynamics in trade, logistics and supply chain management,” continued Mr Khalid.

The benefits of having a good set of trade transport policies are manifold, as he said: “They enable manufacturers and producers to out source materials and parts from the cheapest sources anywhere, anytime and at favorable costs. They also allow them to be well connected with their vendors, suppliers and business partners, and to reach their markets fast.”

He added that this would enable them to produce on a just-in-time basis, minimise inventory and keep lean and agile supply chains.

“Well thought-out transport policies also help manufacturers and producers optimise inventories and transportation load. In turn, this can reduce less-than-load movements of trucks on the road, hence help reduce road congestion, fuel consumption, green house gas emissions, high costs of delivery and waste of time along the supply chain,” explained Mr Khalid.

“By attaining economies of scale, thanks to good trade transport policies, companies can free capital and resources to focus on research and development and improving products/services to customers rather than spend a disproportionate amount on transportation,” he concluded. “This is key for a trade-dependent nation like Malaysia to enhance its trade performance towards meeting its ambition of attaining global competitiveness and developed nation status by 2020,” he said.

Comments

Name *
Email (For verification & Replies)
Code   

Submit Comment