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Trade war lures logistics giants deeper into Southeast Asia

Major international logistics companies, including Nippon Express and Deutsche Post DHL Group, are expanding operations in Southeast Asia as manufacturers shift production to the region to escape the deepening US-China trade war. Nippon Express is building major warehouse facilities in Malaysia and elsewhere and bolstering shipping services across the region with the aim of boosting sales there by 50 per cent over five years.

A large warehouse under construction by Nippon Express on the outskirts of Kuala Lumpur will be completed as early as January. The facility, with nearly 50,000 sq. meters of floor space, will handle auto- and electronics-related international freight as well as shipments of food and daily goods within the region. The company will also finish building a warehouse in Cambodia in December and is considering similar facilities in such countries as the Philippines and Vietnam.

Thailand, Vietnam and Malaysia already have established supply chains, making it easier for the region to take on additional production from China. Nippon Express will ramp up trucking services between these countries, aiming to boost sales in the region, including India, by about 50 per cent from the fiscal 2018 level to 135bn yen ($1.25bn) in fiscal 2023.

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