Summary

The Myanmar freight and logistics market is anticipated to grow at a CAGR of more than 7% during the forecast period. The market is valued at USD 4.32 billion in 2020. The logistics sector in the country is under transformation, driven by the increasing trade activity, improving connectivity, and entry of major international players.

The covid-19 has impacted many sectors of the economy including logistics. Manufacturing, logistics, and retail sectors have witnessed the high impact primarily driven by a combination of demand and supply shocks as supply chains globally were disrupted. In addition, the military coup in the country has also impacted the logistics sector in the country with the suspension of flights and causing freight rates to increase.

Lack of proper transport infrastructure has hindered the growth of the logistics sector in the country for many years. However, the ongoing developments in the country present a lot of opportunities for the logistics players. The strategic geographical location of the country is an important factor in attracting investments. The location of the country has a special significance in the Asia-Pacific region, connecting the two major economies of China and India. The country acts like a continental bridge connecting the regions of South Asia, East Asia, and Southeast Asia.

Most of the logistics players in the country, more than three-fourths of them are involved in provision of common services, such as unloading, loading, customs clearance, and forwarding services, while the remaining companies provide value-added services, such as labeling, shipment tracking, and cold storage. As the demand for these services is growing, more number of companies are adding these kind of services to their existing business portfolio.

Key Market Trends

Road Transport Sector is the Dominant Mode of Transportation

Road freight transportation has been emerging as a leading mode of freight transportation in the recent years along with shipping and inland water transport. Road transport is the dominant mode of domestic transportation, helping connect rural areas and support regional and international trade.

The road network in Myanmar is comparatively weak and underdeveloped among the ASEAN nations, with more than half of the road network being unpaved. The improper infrastructure coupled with the lowest motor vehicle penetration in Southeast Asia results in high transportation costs and long travel times. This makes the trucking costs in the country comparatively higher than other countries in ASEAN.

As part of Myanmar’s Sustainable Development Policy 2018-30, transport infrastructure development is a prioritized area. The third goal in the report relates to creating jobs and boosting the economy with the help of the private sector.

Cross-border trade has been gaining more importance across the Southeast Asian region and has become the key for increasing trade activity and economic development. All the countries in the region have joined hands and created a cooperative development to increase competitiveness altogether. In this context, the cross-border trade is expected to be a major driver of the Myanmar trucking industry.

Developments in transport infrastructure to improve the connectivity and to drive the logistics market

Myanmar’s significant reforms include merging of the ministries related to transportation as a single Ministry of Transport, expanding transport networks to reduce transportation costs, improving water transport along the Ayeyarwady and the Chindwin rivers, and allowing private companies to manage Yangon and Mandalay international airports under the PPP (public-private partnership) scheme.

In order to increase the freight transport efficiency and maximize investments in the sector, a logistics corridor development strategy has been considered. Under this strategy, investments will be concentrated within six so-called logistics corridors, which include major transport and cargo systems, such as roads and rivers linking large industrial clusters to border gates and ports.

The establishment of six logistics corridors that run through the country, which is fundamental to the plan, includes North-South Logistics Corridor between Yangon and Southern China, South-East Logistics Corridor to Thailand, Trans-Myanmar Logistics Corridor connecting Kyaukphyu in Rakhine State with Tachileik in Shan State, Myanmar-India Logistics Corridor, Main River Logistics Corridor, and Coastal Marine Logistics Corridor.

Competitive Landscape

The freight and logistics market in Myanmar is fragmented with a large number of enterprises. The major players for freight transport and logistics services are private companies, except the railway freight operation undertaken by Myanmar Rail (MR) and the inland waterway transport operation undertaken by large-sized vessels of around 1,000 DWT by the Inland Waterway Transport (IWT).

Most of the companies operating in the logistics sector of the country are small and medium-sized enterprises. Yusen Logistics, DB Schenker, DHL, CEA Project Logistics, EFR Group are some of the prominent logistics players active in the market. Though the market has a presence of several leading players from all over the world, it is still a fragmented market without any dominant players.

The majority of the local players are offering services, such as unloading, loading, customs clearance, and forwarding services. The transforming logistics sector of the country, which is at an expansion phase, is widely driven by the rising trade activity that aims to improve connectivity.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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