How to Choose the Best Freight Management Software in Malaysia


How to Choose the Best Freight Management Software in Malaysia

The freight and logistics industry in Malaysia is expected to grow at a CAGR of over 4% between the 2022-2027 period. The growth is led by the booming eCommerce industry, government reforms, and technologically literate middle-class consumers, among other factors. This makes the industry highly competitive, which comes as an opportunity as well as a challenge for different stakeholders.

Businesses are looking for ways to make their operations highly efficient, scalable, and flexible, which is creating a pull-based demand for smart and versatile freight management software in Malaysia. With advanced capabilities stemming from in-built smart AI/ML routines, these solutions not only help businesses manage their day-to-day operations but also in delivering across stringent SLAs and diverse customer demands. 

With the easy availability of goods and services, customers’ shopping behavior is also changing, and their expectations are also rising. Consumers are now seeking faster deliveries, even for foreign products, and expect brands to ask for zero delivery fees or shipping charges. 

Below, we discuss the various growth drivers of the freight industry in Malaysia, key challenges in the sector, and some key considerations businesses should have in mind while choosing freight management software in Malaysia.

Freight Management Software in Malaysia: Current Landscape 

Malaysia has the 29th longest coastline (4,675 km) in the world and several prominent ports accounting for the majority of traded goods. 

This offers Malaysia a strategic geographic location making it an important transshipment hub. For instance, Port Klang, a major port in Malaysia, is the most crucial transshipment hub, wherein around 70% of the volume is transshipped. Along with Malaysia’s strategic location, the availability of numerous shipyards and low docking costs act as the main drivers of the freight and logistics industry.

Moreover, the Malaysian eCommerce market is estimated to register a growth of around 19.9% to touch USD 9.2 bn in 2022, majorly led by increasing internet penetration and changing customer preferences. While this is boosting the freight and logistics sector, the customers are now demanding access to newer products and faster deliveries but don’t want to pay any extra shipping. And this is creating pressure on the Malaysian freight and logistics industry.

However, to meet the aforementioned needs, existing freight management systems that rely majorly on manual elements render ineffective, leading to demurrage, and breached SLAs, among other problems. And challenges such as high logistics costs and a fragmented market also add to the issues faced by businesses limiting their growth.

Having a smart and integrated end-to-end freight management system in Malaysia that reduces the reliance on manual elements and improves operational efficiency could help businesses meet SLAs. It could also help keep an eye on shipment movement, make accurate predictions about the delivery time, send-time updates, and plan efficient routes, eventually reducing overall logistics costs.

Next, we discuss the most important factors that are boosting the freight and logistics market and, eventually, the need for freight management software in Malaysia.

Key Drivers of Growth of the Freight Management Software Market in Malaysia

E-commerce Growth 

One of the biggest key drivers of the growth of freight management software in Malaysia is booming e-Commerce. The Malaysian e-commerce market is expected to achieve a CAGR of 9.8% within the 2022-2027 period. Thanks to the amazing mobile penetration (88.88%), the country has a large number of active internet users (29.4 million in 2022) and high e-commerce adoption rate.

Even the SMEs, which amount for most of the bulk business in Malaysia, are adopting e-Commerce because it helps expand their reach globally, eventually improving their business. The Malaysian government pushed the SMEs to opt for online means by offering them subsidies and aid through the ‘Go-eCommerce Onboarding campaign’.

Government Initiatives for Infrastructure Development

The Malaysian government is taking decent steps towards boosting the country’s GDP by solidifying the infrastructure, which is further meant to improve the freight and logistics industry.

For instance, the government announced the Malaysia Plan: a 5-year centralized plan for economic development wherein public sector companies received the funding. Also, the government has announced several financial and economic reforms, such as restoring the Malaysian currency, reducing excise duty, and abolishing GST, all of which are beneficial for the freight and logistics sector.

Technologically Literate Middle-Class Consumers 

Yet another factor that indirectly drives the growth of freight management software in Malaysia is the technologically literate middle-class consumers. Such consumers seek foreign products and heavy discounts on the items they purchase, which is both good and challenging for the freight and logistics industry.

For instance, when consumers demand more, there’s an opportunity for business. However, to be able to offer discounts and affordable prices, businesses need to resort to efficient methods such as freight management software that’ll automate the processes and save businesses money. 

East Coast Rail Link (ECRL) project

ECRL, or the East Coast Rail Link Project, will be one of the major contributing factors towards boosting the economic growth of Malaysia. This project aims to connect the port of Klang to Kota Bharu in northeast Malaysia, reducing travel time significantly and improving connectivity which is monumental for the logistics and freight industry.

Competitive Landscape

There are numerous key players in the freight logistics market in Malaysia, such as Nippon Express Co. Ltd, Kerry Logistics Network Limited, MMC Corporation Berhad, CJ Century Logistics Holdings Berhad, GD Express Carrier Berhad, KTM Berhad, etc.

Several of these players are adopting new strategies such as collaborations, capacity expansions, partnerships, and mergers to improve their market share, remove inefficiencies and meet the rising demands of their customers. This is increasing competition among these companies, forcing them to grow and thus improving the logistics sector in Malaysia.

Halal Logistics – Emerging Sector

Another key driver of the growth of freight management software in Malaysia is the rise of Halal logistics. Halal products are famous across the world, especially in the Middle East and Asia, mainly because of quality assurance and safe handling.

Companies across Malaysia have realized the importance of Halal logistics and have started producing and shipping halal products. For instance, Kontena Nasional Bhd. (KNB) offers end-to-end hall logistics services in Malaysia. This company was the first to receive Jakim certification. In addition, Nestle Malaysia has become a halal hub and is the largest producer of halal products for Nestle in Malaysia.

In a nutshell, Halal logistics is propelling the growth of Malaysia’s freight and logistics industry.

The Logistics Performance Index (LPI) of Malaysia

The World Bank created LPI, or Logistics Performance Index, to measure the friendliness of logistics across 160 countries. This index considers the quality of trade and transport infrastructure, customs clearance, logistics quality and competency, timeliness of shipment, arrangement of international shipments, and ease of tracking.

Malaysia had the highest LPI after Singapore in 2016 in Southeast Asia. Unfortunately, this score declined, and Malaysia was overtaken by Vietnam and Thailand in 2018. Malaysia’s position dropped from 32nd to 41st from 2016 to 2018, respectively. Reason?

Well, Malaysia ranked lower than Singapore and Thailand because of the poor border clearance process, quality of logistics service providers, and infrastructure. These are the challenges that need to be dealt with if Malaysia aims to score higher on the LPI ranking.

Next, we discuss the key freight management challenges that businesses need to consider when choosing freight management software in Malaysia.

Malaysia Freight Management Software: Key Considerations to Keep in Mind

Forecasting Inventory 

Over the past five decades, Malaysia’s poverty has considerably reduced, but its economic state is ever-fluctuating. This impacts the consumers’ buying patterns, leading to the volatility of demand and making it hard for supply chain managers to forecast the inventory and meet the ever-changing needs accurately.

Having predictive insights into the inventory, market demand, and upcoming rush/slumps will help overcome the challenges posed by fluctuating market demands.

Smart End-to-End Management Functionalities

While the freight and logistics industry experienced rapid development, there was a lack of emphasis on service excellence. The supply chain companies need to gain more knowledge, lay more emphasis on service quality and opt for sophisticated management to propel the growth of the Malaysian logistics industry.

This requires in-depth visibility into all the operations to identify the pockets of optimization, areas where customer service lags, and where improvements can be made in terms of costs and resource utilization.

Advanced Technological Capabilities

Smart technology-based solutions will not only help businesses manage their operations in a better and more optimized manner, but they will also streamline the working of all the system components. AI/ML-powered solutions with smart route planning and optimization can help energize more deliveries while reducing fuel consumption costs. 

Intelligent quote management systems, spot inquiries, end-to-end freight management, real-time tracking, and other such smart in-built capabilities can make freight management operations better and easier.

How Shipsy’s Custom Freight Management Software Can Help Malaysian Businesses Unlock Growth

Unlike legacy freight management software that offers limited features targeting specific industry use cases, Shipsy offers diverse product offerings for managing cross-border and domestic freight movements. 

With Shipsy’s smart freight management solution, businesses can obtain the best freight rates via the AI-driven carrier ranking and 1-click renegotiation. They can accelerate order-to-ship times and minimize their incidental costs via predictive alerts while managing compliance.

Businesses can provide stakeholders with real-time visibility of all their containers across multiple carriers. Finally, they can also reclaim productivity and prevent cost leakage with automated invoicing and settlement support.

With its smart product offerings, Shipsy has helped businesses to:

  • Reduce SLA breaches by 37%
  • Increase deliveries per driver by 14%
  • Increase savings on freight costs by 10%
  • Increase vehicle capacity utilization by 31%
  • Increase savings in optimization time and route planning by 18%
  • Reduce overall transportation costs by 12%

To know more about the AI-powered freight management system or to get started with Shipsy, please get in touch with our experts by scheduling a customized demo today!


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