News / SE Asia may fit the bill as forwarders shy away from US 'tariff silliness'

European forwarders are abandoning the US and looking for new opportunities, many seeing South-east Asia as offering increased import prospects after handling booming export volumes out of the region.

Leading the way have been Indonesia, Thailand, and Vietnam, which, having gained wealth as part of the US-led ‘China+1 shift’ are looking for imports to support not only development of their manufacturing sector, but a series of infrastructure improvements.

One European forwarder told The Loadstar: “There are three regions we believe will fill the hole made by us reducing our exposure to the US, with all the tariff silliness that has been going on.

“South east Asia may not be where we are seeing massive 30%+ spikes in volumes, but we are seeing steady growth, and we are fairly confident that this level of growth will remain consistent over the next few years.”

Another noted that they considered Malaysia to be one of the markets that would see an uptick in growth over the coming years, suggesting to The Loadstar that the region would experience an annual increase in imports of 7% to 8%.

Modally, they said, much of the work they were doing into Vietnam was time-critical goods moving by air, but for Indonesia and Malaysia the split was more heavily weighted towards ocean.

They said: “For Vietnam, we are doing 80 to 90 tonnes a month by air; for Indonesia and Malaysia, it is about 20 tonnes a month,” but stressed the current absolute volumes were not what buoyed them about the region’s prospects.

“Our present volumes are not massive – but also, 80 tonnes a month by air for a country the size of Vietnam is not to be sniffed at – what excites us is that the region’s governments are smart, they know how to maintain growth rates,” the forwarder said.

“There may be other markets that are growing more rapidly, but we’d rather know a country can post growth of 7%-8% annually for several years than see one have two years at 30% and then just stop.”

Pressed on what made them confident about the prospects for South-east Asia, the forwarders The Loadstar spoke with said it was where governments were investing, noting that while ecommerce demand had spiked volumes initially, there was infrastructural growth.

One added: “We are handling a lot of machinery and hi-tech goods. This tells us that the countries in this region are investing in themselves and are looking to the long-term, rather than cashing in on the China+1 shifts.”