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Riding the boom in demand for overland cargo routes, Geodis has expanded its South-east Asia road freight network.
The forwarder uses its own vehicles and partners’ trucks to carry FTL and LTL cargo along the Singapore, Malaysia and Thailand axis. Now it is driving into Vietnam.
Geodis said: “The addition of the service to Vietnam will serve businesses driving the manufacturing boom in that country over recent years, helping the region become a vital supply chain node for many hi-tech, retail and FMCG businesses.”
Indeed, after a long and strict Covid lockdown this month, forwarders are reporting pent-up cargo demand from South Vietnam, especially airfreight. And Lakshmanan Venkateswaran, Geodis sub-regional MD for South-east Asia, said the road network was seeing “significant growth” in volumes.
He told The Loadstar: “We are seeing a significant upward trend moving via FTL, especially from China to Singapore, Malaysia, Thailand and Vietnam, or vice versa, especially during this period of widespread port congestion.
“The road freight market also appears to have become a trend for multimodal connections like air-road and ocean-road, in supporting our customers’ door-to-door needs without heavily impacting their supply chain.”
He said the region’s road freight demand was predominantly from hi-tech, automotive and industrial shippers, with ocean freight customers increasingly making the modal switch.
“While e-commerce shipments present big potential for the road freight market, customs restrictions at Asean markets continue to pose a big challenge,” added Mr Venkateswaran.
“Our key focus is providing efficient solutions and we’re doing this by combining the dense volumes from the hi-tech and automotive sectors with the volumes from the SME segment on our road networks.”
Given the demand for LTL cargo and transhipment, as well as lingering Covid-restrictions at border crossings, he said the benefits of initiatives such as the Asean Customs Transit System (ACTS) were yet to be seen.
“ACTS is mainly for FTL,” Mr Venkateswaran explained. “Our new road network service is a scheduled LTL service that is not covered under the scope of ACTS simplified procedures.
“Although there have been improvements in cross-border customs processing in many Asean countries over the past few years, there are still complexities in handling local import/export shipments and transhipments in the same truck.
“The biggest challenge faced by road freight players is the uncertainty and unprecedented situation from Covid. For example, the China-Vietnam border is heavily congested, which can lead to a delay of four to five days in some serious traffic conditions,” he added.