1. Overview on Roadmap for the Development of the
Freight Logistics Services Sector
Presented by
Dr. Mohamed Amin Kassim
Workshop for Malaysian Freight Logistics
Shah Alam Convention Centre (SACC)
4th August 2010
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

2. National Development Context
Third Industrial Master Plan (2006-2020) 10th Malaysia Plan (2011-2015)
Creating an efficient and competitive logistics Thrust 1: Moving the economy up the value chain
Thrust 1
industry.
Enhanced national competitiveness in the global
Developing the industry to operate in a KRA 1
Thrust 2 environment
competitive international environment
Greater contribution from “new Sources” of
Expanding and upgrading the capacity of the KRA 2
Thrust 3 growth with high valued added
industry
Pervasive adoption & diffusion of innovation &
Intensifying the application of new ICT in the KRA 3
Thrust 4 technology
industry
KRA 4 Intense private sector participation
Thrust 5 Ensuring an adequate supply of competent
KRA 5 Strengthened entrepreneurial culture & capacity
Thrust 6 Strengthening the institutional support
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

3. Targets Under RMK 10
6% GDP Growth Per Annum
61.1%
12.8%
Services
Private Investment
Contribution 37% Highly skilled
Growth Per Annum
to GDP by 2015 workers by 2015
(RM115 billion
(7.2% growth
per annum)
per annum)
Note:
1. Service contribution to GDP 2009 is 57.4%
2. Total investment 2006 to 2009 : Domestic RM185 Billion + FDI RM25.6 Billion = RM210.6 Billion
3 3. Share of total employment by services 2009 = 51%
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

4. Development Methodology
METHODOLOGY
Analysis & Research Define Freight Logistics Interviews with Stakeholders Discussions / Workshops
Review Freight Logistics &
Economy Baseline
Freight Logistics Trends &
Economic Outlook
Need for Action
Strategic Initiatives
Improve Transport Infrastructure & Services
Adopt industry Best Practices & Benchmarking
Foster Human Capital Development & Capacity-Building
Improve Institutional & Regulatory Framework
Pervasive Application of IT and Infostructure
Secure Sustainability, Security and Environment
4 Action Agenda for Malaysian Freight Logistics Industry
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

5. What is Freight Logistics
Freight Logistics defined as
o economic activities which involve in the
- sourcing, purchasing, packaging
- storage, handling and
- delivery (transporting) of freight (cargo) and
- managing the documentary and information process flows between
production and consumption points in Malaysia and around the
world.
Freight Logistics includes
o all economic activities which are outsourced to professional Third Party
Logistics Service Providers (3PLs) as well as freight logistics carried out in-
house by manufacturers and distributors
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

6. Pervasive Scope Of Freight Logistics
Information Resources Input
Raw Materials Inbound Logistics Transformation Outbound Marketing After Sales
Acquisition Logistics Services
•Network Design
•Consolidation •Inventory Decisions
•Mode Selection •Inventory •Packaging
•Purchasing •Carrier Selection Management •Consolidation •Returns Handling
•Service Level
•Vendor Selection •Materials Handling •Packaging •Mode Selection •Parts Management
•Channel Decisions
•Vendor Location •Warehousing •Kitting •Carrier Selection •Service Network
•Customs Port •Assembly •Warehousing
Clearance •Backhaul
Management
Pollutants (Negative Environmental Impact)
Information
Reverse Logistics : Reduce, Substitute, Reuse, Recycle
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

7. Components of Freight Logistics Cost
Outbound
35%
Internal
26%
Inbound
39%
Source: Adopted from the World Bank
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

8. Estimated Size Of Freight Logistics
o Freight Logistics Industry
Secondary Logistics
16 B 44 B Related Activities
20%
Passenger Freight
20% Transport
18%
Transport & Secondary Primary
Storage Logistics Related Functions
80% Activities 80%
82%
Value RM20 billion RM60 billion RM220 billion
Sector Transport & Storage Total Freight Logistics Agriculture, Mining, Quarrying,
SME Manufacturing, Construction,
Wholesale & Retail Trade, Hospitality
Outsourcing
25%
In-house
75%
Freight Logistics: Share of Outsourcing & In-house Logistics
8 Contribution to economy = 11.3% of GDP
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

9. Roadmap: Development Of Freight Logistics Strategy
To foster world-class, safe, secure, reliable, cost-efficient &
Vision environment- friendly Freight Logistics system
to support the country’s economic growth & development
To improve logistics services level throughout the global
Mission supply chain by adding value
through promoting higher customer service at lower service cost.
Ensure changes & improvements
Firm Level are customer-centric
Strategic Enhance industry competitiveness and
Industry Level
Objective foster industry linkages
To enhance the national competitive edge
Economy and support the
country’s economic growth and development
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

10. Why Freight Logistics?
o Governments have recognised freight logistics sector as a strong enabler of
trade and help the economy move up the value chain
 2 % growth in GDP
A drop of 0.5 % in
logistics cost &
 40% increase in the range of
products exported from a
county.
10 Source: World Bank Report
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

11. Impact Of Freight Logistics
Induces GDP growth
by 0.47%
Port Inefficiency
11 Source: World Bank Report
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

12. Malaysian Freight Logistics Agenda
SI 1 SI 2 SI 3 SI 4 SI 5 SI 6
Improving Adopting Fostering Improving Pervasive Sustain-
Transport Industry Best Human Institutional & Application of ability,
Infra- Practices & Capital Regulatory IT and Info- Security and
structure Bench- Development Framework structure Environment
& Services marking & Capacity
Building
6 Strategic Initiatives
+
12
30 Action Agenda
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

13. Action Agenda Template
SCOPE OF STRATEGIC INITIATIVES
1 Scope of Agenda
2 Current Situation
3 Description of Measures Proposed
4 Impact
5 Global or Regional Relevance
6 Obstacles
7 Implementing or Competent Agencies
8 Implementing Period
9 Financial implication or Budgetary Relevance
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

14. Best Practices In The Context Of National Economy
Skill Enhancement
BEST Modal Shift
PRACTICES
Performance Management/ Addressing Environmental
Lean logistics Concerns
Fuel Efficiency / Fostering System
Equipment & System
Green Logistics Connectivity
Source: Study Team
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

15. Single Window Development
National Single Window
Electronic Electronic
Permit Declaration
Messaging Module
ASEAN
Electronic Single
Customs Electronic Window
Duty Manifest Single
Payment
Window
Electronic Preferential
Certificate of Origin
National Single Window ASEAN Single Window APEC Single Window
Malaysia Malaysia, Singapore, Thailand, Australia, China, Korea,
Indonesia, Brunei, Vietnam, Philippines, United States,
Cambodia, Philippines, Laos, Canada, Japan, New Zealand,
Myanmar Singapore, Vietnam
Source: Ports World
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

16. Proposed MLC Structure
CHAIRMAN
Executive Council Executive Director/
Executive Director /
Members consist of :- Secretariat
Secretariat
• 6 from private sector
• 6 from public sector
(EPU/MOT/MITI/MIDA/ General Council
MOF/LAND
PUBLIC TRANSPORT Evaluation & Monitoring
COMMISSION (Proposed EPU to take the lead)
Focus Group Focus Group Focus Group Focus Group Focus Group on
Institutional on Human on on Industry IT &
Framework & Resource Sustainability, Best Practices Innovations
Regulatory Development Safety & Development
16
Environment Initiatives

17. Moving Forward
1. Roadmap for the Development of Freight Logistics
i. Adopt a holistic approach
“Supply-chain and integrated logistics perspective as a national agenda”
ii. Public Policy to have a clear roadmap for liberalisation
a. Identify Intra-Sectoral Linkages
b. Administrative Barriers
iii. Simplify Execution
iv. Strengthen the Malaysia Logistics Council & Services Development
Council
2. Advocate Regulatory Reforms
i. Pragmatic approach to Best Practices – 1st World Standards
ii. Practice Transparency – Rules-based vs Discretionary
iii. Review all policies after 5 years
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

18. Moving Forward
3. Conjure a blueprint for National Info-Structure
i. Re-engineer the Trade Facilitation System
ii. Intelligent Traffic Systems
iii. Uniform standards for bar-codes, etc
4. Improve Multi-Modal Connectivity
i. Upgrade rail logistics capacity
ii. Streamline logistics corridors and strategic hubs
iii. All physical developments comply with safety/security and sustainability
5. Motivate greater Private Sector role for leadership
i. Cultivate internationally competitive corporation (Create Champions)
ii. Extend incentives for re-investment for growth (2nd round)
iii. Incentives for logistics companies promoting RDC / IPC / value-added
hubs / export of services
iv. Avoid over-protectionism and entry barriers
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

19. Moving Forward
6. Institute Liability Conventions
i. Integrated Logistics Policy
7. Develop and Foster the Development of Trading Communities
i. Incentives to enhance effectiveness
ii. Promote suppliers within regional supply-chain
iii. Support virtual markets
iv. Halal Logistics & Accreditation
8. Promote logistics as an attractive platform for career progression
i. Create Centres of Excellence
ii. Training / accreditation / research
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

20. Seamless Supply Chain Management
Time Savings
Process Flow Reduce Logistics Cost
+ Innovation
Competitive Advantage
Attract New Growth
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MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)

21. Thank you
Dr. Mohd. Amin Kassim
Century Logistics Holdings Berhad (424341-A)
P. O. Box 93
42008 Port Klang
Selangor Darul Ehsan, Malaysia
Tel: (603) 3375 5888 Fax: (603) 3375 5969
info@century.com.my
www.century.com.my
MALAYSIA LOGISTICS ROADMAP – THE WAY FORWARD (4TH -5TH August 2010)