The consumer markets in Southeast Asia continue to grow. In a recent article on Online Retail in Southeast Asia, Research Institute Forrester commented that it expects the B2C online retail to reach $53 billion by 2023 from $19 billion today. Due to the growth of the consumer markets and, consequently, the household spending in Southeast Asia, more goods will need to be moved across borders. This has given a healthy boost to the cross-border trucking business in the region.
Cross-border trucking can save you money and time. Depending on the cargo and the destination, it can be faster than ocean transport and cheaper than air freight. It’s also a more flexible option as it allows for new transport routes between neighboring countries or regions and fast door to door delivery. With air freight and ocean freight you rely on fixed schedules of the airline and shipping companies. With trucking, on the contrary, you can be much more flexible about the route and departure times.
In this article, Arjun Kohli, Head of LANDbridge for the Southeast Asia Cluster, shares information on cross-border trucking and provides tips on how to make the land border crossing process for your shipments as smooth as possible.
What are the busiest border crossings?
Some of the busiest border points for cross-border trade are the Thailand and Malaysia border with Sadao (TH)/ Bukit Kayu Hitam (BKH) (Malaysia) and Sadao (TH)/ Paedang Besar (Malysia) as the two main border points.
Another busy border point is the Pingxiang (CN) / Langson (VN) border between Vietnam and China. Finally, Johor (MY) and Tuas (SIN) between Malaysia and Singapore and Aranyaprathet (TH) and Poipet are amongst the most busyies borders in the region.
Besides the four borders above, we also see increased trade between Thailand and Myanmar.
What do I need to know before organizing my first cross-border shipment?
Cross-border trucking as a transport mode in Asia has many benefits. However, to ensure a smooth process, Arjun mentions a few things you should know before organizing your first shipment.
Cargo trucks restrictions Firstly, vehicle restrictions bar entry of one country’s cargo truck into the other. Unlike in the EU, where trucks can easily cross borders, commercial vehicles in Southeast Asia, registered in one country, cannot enter the other country.
For example, Malaysian trucks cannot enter Thailand and Thai trucks cannot enter Malaysia. Likewise, Chinese trucks cannot enter Vietnam and Vietnamese trucks cannot enter China.
There are two exceptions. Firstly, in Laos, where trucks from both Vietnam and Thailand can enter. Secondly, in Singapore, where Malaysian trucks are allowed to enter Singapore.
The vehicle restrictions require additional handling because the cargo needs to change trucks at the key border points.
There is also more risk of damage because of the transfer of the cargo to another truck. To minimize this risk, logistics providers use the Lift On/Lift Off (LoLo) method. LoLo means that the company transfers the entire container with a crane from one truck to the other at the border
DB Schenker overcomes these challenges by implementing efficient crossborder security procedures. Our cargo damage rate is less than 1% and we ensure the smooth daily transport of cargo across borders for many of our high-end customers in the consumer electronics, telecom and FMCG sectors.
Customs Clearance
A second key area that makes cross-border trucking different from other transport modes like ocean and air, is the difference in customs requirements. Although the countries work on initiatives to put a coherent customs process in place, shippers have to deal with multiple customs requirements when crossing the border.
Most of the customs process is like other freight modes, such as air and ocean. However, the road borders are often far removed from the regular country entry points, like air and sea ports in the main cities.
Due to the remote locations of the road borders and the fact that most customs headquarters are located in the city, it can take a long time to resolve issues like incomplete paperwork.
To avoid delays and costs, it is important to work with a well-established, international logistics company. Unlike domestic trucking companies that operate on a small scale and do not offer integrated services like customs clearance, DB Schenker has offices at most key road border points with specialized customs teams in each of the Southeast Asian countries. This ensures that the shipment complies to all customs regulations before the truck departs for its cross-border journey.
With an established cross-border provider, the shipper can also use secure storage and parking facilities at the key borders in case of unforeseen delays.
Unseen Border Congestion/Holidays The peak seasons are a third key area that you need to be aware off. At specific times throughout the year, certain border crossings deal with exceptionally high volumes resulting in long waiting times for the shippers. This happens for example around the Chinese New Year, or at month end closing when some industries push out more cargo than usual.
Besides longer lead times, shippers may have to deal with a lack of truck availability and manpower because drivers may not always come back to work straight after the holidays.
To avoid problems during peak times, we recommend Southeast Asian companies to work with an experienced partner. International logistics providers, like DB Schenker, know the local market conditions and are better at forecasting traffic flows. They also partner with other trucking companies to efficiently manage demand fluctuations.
Cargo Safety & Security A last key area is cargo security. Cargo security is essential for all transport modes. However, the road conditions in Southeast Asia are especially challenging. Luckily there are steps you can take to make sure your cargo stays safe. To avoid damage to the cargo, make sure the cargo is properly secured with lashing or floor stoppers or install special air bags. Also verify if the driver is thoroughly trained to deal with tougher road conditions.
Multimodal Solutions
Trucking is not only an efficient transport solution across Southeast Asia. Increasingly, shippers discover the benefits of multimodal solutions for export or import to and from other regions in the world. For instance, at DB Schenker, cargo is transported from Vietnam to Bangkok via road for various customers, and once it arrives in Bangkok, the cargo is shipped by air to East Asia, Europe and Latin America. This multimodal solution is also attractive for cargo from other countries, such as Cambodia, Laos and Myanmar.
Another attractive multimodal transport solution is by road/rail between China and Europe. With the increased frequency of rail between various cities in Europe and China, rail is quickly becoming a more attractive option for shipments between Asia and Europe. For several of our Southeast Asian customers, especially in Thailand and Malaysia, we now move cargo by truck to cities like Chongqing in Southwest China. From Chongqing, we transport the cargo by train to the various cities in Europe. This trucking-rail solution can save you time and costs, and it also reduces carbon emissions.
What makes a shipment successful?
Finally, we asked Arjun what makes a cross-border shipment successful.
In his experience, heading the LANDbridge team for Southeast Asia, the key success factor is timely planning, effective communications and strong implementation.
“For every new customer, we prepare a standard process document with the lead time performance expectations. We also specify the required documents and explain how we communicate about specific milestones. This process gives our customers total visibility and predictability of the supply chain.” - Arjun Kohli, Head of LANDbridge for the Southeast Asia Cluster
Timely planning becomes even more important around public holidays or during peak season. In these circumstances, careful planning is crucial to avoid last minute surprises.
A final success factor, says Arjun, is to work with experienced and committed staff. Cross-border shipments involve a lot of coordination amongst the teams in the different countries. The local teams need to communicate well, have the same goals and show the same level of commitment towards the customer. The Schenker transportation and customs brokerage teams in Southeast Asia know each other well. We have regular meetings to exchange ideas and discuss ways to further improve our services.
More information With Asia LANDbridge, DB Schenker has one of the most extensive cross-border road transportation services available in Southeast Asia, with access throughout Singapore, Malaysia, Thailand, Cambodia, Laos, Vietnam and Myanmar and we offer an excellent connection to China. More information is available on our website.
To learn more about DB Schenker’s cross-border trucking solution in Southeast Asia or to book your next shipment, please contact Arjun Kohli (email: arjun.kohli@dbschenker.com) or your local DB Schenker office.
Tet is celebrated on the first day of the first month in the Lunar Calendar. The weeks before and after the Tet festival, are challenging for shippers as it puts high pressure on the supply chains. It’s peak season and more goods need to be supplied to the shops. The demand for products, like food items but also clothing, rises dramatically. Vendors work hard to keep up with the demand and stock-up extra supplies in the warehouses.
This is what you can expect:
Everyone is working at full capacity Each partner company in the supply chain (from the manufacturer, to the warehouse, trucking company and store owner) is working at full capacity. As a consequence, a small problem in the supply chain (for example because a customer did not book a truck in time) can quickly lead to major stock shortages in stores. At the same time it becomes more difficult to fix problems and mistakes the closer you get to Tet because people are on annual leave. On top of that, getting goods from the warehouses to the consumer is likely to be more expensive because local trucking companies face capacity problems and sometimes charge higher rates. Planning ahead for Tet is therefore essential.
Local trucking companies close early Customers need to be aware that local trucking companies will be starting to close for Tet about a week before the start of the holiday. They use these additional days to do maintenance on their trucks and allow the drivers more time to travel back to their home towns to enjoy the Tet holiday. To avoid any surprises, like having to pay double trucking fees, it is therefore essential for customers to have a trucking plan in place.
Shelves at the warehouses are full Prior to Tet, the warehouses operate at full capacity. The shelves are packed and the warehouse staff puts in a lot of overtime to handle and transport the goods to the consumer in a very short period of time. As can be expected, the period right after Tet is usually a quiet time for the consumer goods business and activity at the warehouse is scaled back to the usual routine.
Airfreight is in the middle of its peak season to deal with the Tet rush Before the long holiday export demand is surging resulting in a lack of flight capacity, higher rates and longer transit times than usual. To avoid delays our air freight team recommends to book in advance and at least 10 days prior to uplift days. Customers must be aware that the airport terminal, airport customs and the airlines have very limited staff on duty during the Tet holidays. Right after Tet the airfreight operations will be back to normal again. However, because the factories need about a week to get back to operations, there is not much export demand the first week.
Expect delays after Tet at the ports The Vietnamese ports and the CFS port warehouses follow the government announcement to close for the Tet holiday during specific dates. The terminals however will continue to work 24/24 hours and are open for incoming vessels. The days before Tet, the ports work overtime and try to load all export cargo to meet the Container Yard (CY) cut off time and unload all import shipments in time for Tet. After Tet, the ports will be back to full capacity when they resume work. However, they have to deal with heavy congestion at the terminals. Customers therefore need to expect delays created by the week-long closure. It usually takes a bit longer in the North than the South for the timelines to get back to normal.
Tips to prepare for Tet:
Plan ahead and make sure to add some additional days into the delivery timeline
Always schedule enough time to get products shipped as booked
Make sure you have a good trucking plan in place
Try to book your shipments at least a week in advance
Make sure your customs documentation, such as the customs sheet, is in order
Be patient and communicate continuously with vendors/forwarders/carriers to make sure all shipping information is available to you and potential problems are quickly identified
Holiday Schedule 2019: Vietnam Tet Holiday DB Schenker: Monday, February 4 to Friday, February 8, 2019
DB Schenker opens new office in Lang Son at the Huu Nghi border gate connecting Vietnam and China
News, Sep 30, 2018
With the opening of a new office in Lang Son Province at the Huu Nghi border gate connecting Vietnam and China, DB Schenker is now present at all key borders connecting China to Southeast Asia.
DB Schenker launches first direct LCL service between Italy and Vietnam
News, Sep 9, 2018
On September 6, DB Schenker launched its first direct "less than container load" or LCL service from Italy to Vietnam connecting the ports of Genoa and Cat Lai in South Vietnam on a regular weekly basis.
Cross border trucking service connects Vietnam and Thailand
News, Jun 18, 2017
Our cross border service from Vietnam to Thailand offers a cost efficient and reliable solution to meet the growing transportation needs in the region.
DB Schenker in Vietnam celebrates its 25th anniversary
Sep 27, 2016
25 Years ago the company received the official business license for a representative office in Vietnam
(HCMC, 27 September, 2016) DB Schenker, the world's leading global logistics provider, celebrates its 25th anniversary in Vietnam today. Exactly 25 years ago, on 27 September 2016, the company received the official business license to establish a representative office of Schenker CO – GmbH in Ho Chi Minh City.
25 years ago, DB Schenker in Vietnam only had a small office with three employees. The company only offered basic freight forwarding services to a few customers.
Over the past 25 years, the company has grown to become one of the market leaders in Vietnam, with over 650 employees and a wide network of offices and warehouses across the country.
In today’s fast changing business environment, DB Schenker in Vietnam takes pride in providing customers with specialized supply chain solutions across the entire spectrum of industries, working closely with Schenker colleagues in other countries to offer a global product.
“We’ve achieved a lot in 25 years and our journey has just begun. We can all be very proud of our achievements as DB Schenker in Vietnam. I’m confident that in the coming years, our successful journey will continue. We will explore new ways and to rise to the challenges of a competitive logistics market, locally, nationally and globally. We are all very proud of what we’ve accomplished in Vietnam and grateful to our many customers and employees who helped us get here”, said Christoph Matthes, Managing Director of DB Schenker in Vietnam.
To celebrate this special milestone, DB Schenker will organize events for customers and employees in the coming months.
Schenker Vietnam Co., Ltd., DB Schenker’s business entity in Vietnam, was established in 1991 and is one of the leading and earliest established logistics companies in the country. We offer a full range of logistics and transportation services which includes Contract Logistics and Supply Chain Management, Air and Ocean Freight, National Transportation, Landbridge Asia, and Special Services.
For more information, see the contact details of the Marketing and Communications team on the right.
New SOLAS regulations will become effective on July 1, 2016
Jul 1, 2016
New regulations will improve safety in Ocean Freight Industry
The SOLAS amendments are effective as of 1st July 2016 for packed containers received for transportation (gate-in or off-rail). They place a requirement on the shipper of a packed container (or their dedicated agents), to verify and provide the container’s gross verified weight to the Ocean carrier and port terminal - and/ or their representative - prior to it being loaded onto a vessel.
What are the objectives of this initiative?
Elimination of accidents caused by misdeclared container weights
Provision of assurance to other parties within a supply chain
Improvement of security of the stevedores, vessel crews and vessel itself
Maintenance of equipment and terminals in good condition
IMPORTANT: Estimating the weight is not at all permitted under this new regulation.
As per today, the liability and legal consequences on SOLAS VGM requirements are not clearly defined and ratified. Penalties, fines and/ or prosecution are subject to national laws which are yet to come.
The DB Schenker Ocean Freight team in Vietnam will keep a close eye on the developments. We will provide further operational guidelines as soon as they become available.
DB Schenker in Vietnam receives Corporate Social Responsibility Award
Apr 6, 2016
Hanoi, 6 April 2014
DB Schenker recently received the prestigious award for Good Performance on Social Security & Community Development given by the Vietnam Ministry of Planning and Investment Affairs.
The award aims to recognize corporations who have exemplified commitment to improving social security and community development in the country. The criteria for choosing the honorees include ratings on taxpayer responsibility, implementation of customs procedures, environmental consciousness, social insurance for workers, and certified quality management according to international standards.
Corporate Social Responsibility Award 2014
“Our global Schenker 2020 strategy - for people, for markets, for tomorrow, drives our organization towards this continued social commitment,” says Juergen Braunbach, managing director of Schenker Vietnam Co., Ltd. “This award is a testament to DB Schenker’s commitment in becoming a leader not only in shaping our industry but also in assuming responsibility for our employees, the environment and the communities we operate in,” adds Melissa Hanh, heading Human Resources at Schenker Vietnam Co., Ltd.
The award was presented to DB Schenker during a prestigious ceremony held at the premier Hanoi Opera House attended by dignitaries from Vietnamese ministers and top government officials last 6 April 2014. 56 corporations were chosen this year from various industries. DB Schenker is the first and only global logistics provider chosen to receive this prestige.
Schenker Vietnam Co., Ltd., DB Schenker’s business entity in Vietnam, was established in 1991 and is one of the leading and earliest established logistics companies in the country offering a full range of logistics and transportation services which includes Contract Logistics and Supply Chain Management, Air and Ocean Freight, National Transportation, Landbridge Asia, and Special Services.
DB Schenker stands for the transportation and logistics activities of Deutsche Bahn (DB). The logistics division of DB is the world’s second largest transportation and logistics service provider based on sales and performance. In financial year 2011, DB Schenker generated revenues of around 19.8 billion euros. Through its Transportation and Logistics Division, DB holds top positions in global air and ocean freight and has Europe’s densest land transport network and the rail expertise of Europe’s largest rail freight company
We have received many entries but there can only be three winners. They provided the best logistics solution for a cargo delivery project.
The winners are:
Do Thanh Dung
Doan Minh Tuan Kiet
Duong Phuc Tam
Our three winners will be offered a six months internship position at DB Schenker in Vietnam. During the internship, they will have the opportunity to develop their international logistics and supply chain management skills which will prepare them in the best possible way for their future working life.
The growth of the logistics sector in Vietnam is essential for the continuous economic development of the country. As one of the leading logistics companies in Vietnam we see it as our responsibility to train students and to help them to build a solid base for a logistics career.
DB Schenker in Vietnam thanks all the participants for their interest, time and efforts.
About DB Schenker in Vietnam: DB Schenker stands for the transportation and logistics activities of Deutsche Bahn (DB). DB Schenker has been operating in Vietnam since 1991 and has built a strong reputation as one of Vietnam’s preferred logistics providers. Combining global expertise and local strengths, DB Schenker in Vietnam serves the top global brands with operations in Vietnam as well as local companies in various industries such as electronics, semiconductors, fashion, FMCG and pharmaceuticals, to name a few.
