Overall Logistics in Myanmar25 ตุลาคม 2559
The logistics industry in Myanmar has undergone significant development in the past few years, spurred by increasing trade flow, better connectivity, and the influx of big international players.
- Sea trade has played a vital role in driving Myanmar’s logistics sector: approximately 70%
- Approximately 20% of trade is handled via border trade with air freight and railroad trade accounting for the rest.
- However, as a growing economy, Myanmar has experienced a surge in demand for roads.
- The total number of registered motor vehicles rose beyond five million in 2014 from less than one million in 2004.
- However, only 40% of Myanmar’s road network is paved and at least 60% of its highways need maintenance (ADB, “Asian Development Outlook 2016”).
The government implemented Individual Trade Certificates (ITC) to boost legal border trade. This includes approval of new trade licenses and establishment of additional border trade centres to facilitate legal trading with neighboring countries – China, Thailand, India and Bangladesh.
To improve land connectivity and to foster national and regional integration, major highways in Myanmar are being extended or upgraded. For example, the Mandalay-Muse Highway is the main route for border trade through Myanmar’s Shan State to China. An increase in border trade activities between the two countries since 2012 has led to regular traffic jams and frequent road accidents, with an estimate of about 1,500 trucks using this road every day.
- Hantharwaddy International Airport Construction Airport construction in Bago is scheduled to finish in 2022
- A site of approximately 9,000 acres, 80 km northeast of Yangon near Bago
- Expected to have an initial capacity of 12 million passenger per annum, making it the largest airport in Myanmar
- Yangon International Airport upgrade is complete and is in operation
- The new building will be able to handle 6 million passengers per year, more than double the airport’s current capacity of 2.7 million
- Mandalay International Airport
- Capacity to handle 3 million passengers per year
Yangon-Mandalay railroad upgrade
- The Myanmar government will upgrade the Yangon-Mandalay railroad with help from the Japan International Corporation Agency (JICA). The project is being undertaken with a 2 billion USD loan from Japan (Global New Light of Myanmar – 24 August 2016)
- The project is scheduled to begin in 2017, and is expected to be complete by 2023.
- Plan for implementation in three phases 1) first phase will be between Yangon and Taungo, 2) second phase is between Toungoo and Yamaethin and 3) the third phase will be between Yamaethin and Mandalay
- Upon completion, the travel time between two cities will be 8 hours – the trip currently takes 14 hours.
- The new government of Myanmar is planning to buy 200 new coaches from Korea.
The port of Yangon, a downtown river port situated some 23-30 km from Yangon’s industrial zones, now handles about 90% of Myanmar’s external trade. Frequent cargo ship congestion around the port areas is reported as a result of ongoing growth in trade volumes, poor port infrastructure and inefficient cargo handling processes.
However, major new special economic zones (SEZs) are emerging to serve as new development nodes to attract large-scale investment from overseas.
- The Thilawa SEZ
- Phase 1 of the 400 hectare launched in September 2015. Phase 2 of Zone A is expected to be finished by 2016.
- The construction of Zone B (between 500-700 hectares) is expected to be completed in 2022, and is due to start at the end of 2016.
- River ports in Yangon have limited capacity to handle large shipments
- The Dawei SEZ
- 7-year project lasting from 2015-2022. Initial phase development launched in 2015, with 2018 targeted for completion
- Proximity to Thailand, deep sea port planned - able to accommodate up to 300,000 DWT (deadweight tonne) vessel is being revived.
- Kyaukphyu SEZ
- Implementation scheduled in three phases, with completion expected by 2038.
- Construction of first phase expected to start within 2016.
- Proximity to oil and gas resources, deep sea port planned
Key drivers of logistics sector
Construction, automobile, industrial and garment sectors account for majority of the logistics spending in Myanmar in recent years.
- Cement import value increased by 29.7%: from 157.5 million USD in FY 2012-2013 to 204.2 million USD in FY 2013-2014 (Customs Department).
- The growth is expected to sustain the near future with Myanmar construction sector expected to grow at a compound annual growth rate (CAGR) of 11% between 2014-2018, driven by real estate sector boom and government infrastructure projects (Solidiance)
- Automobile sector
- Myanmar car importers are fretting that auto sales will continue to drop until the end of 2017 if the government does not come up with a clear and comprehensive auto policy (Consult Myanmar - 12 September 2016).
- As of June 2016, 476,679 private cars and 28,970 passenger cars were registered with the Road Transport Administration Department (RTAD). Among them, 329,793 private cars and 15,524 passenger cars are running in Yangon.
- Private companies in Myanmar have been allowed automobile imports since 2010. Myanmar imported around 600,000 autos over the last five years, and more than 200,000 old cars have been impounded so far.
- Import of brand-new cars has been allowed since 2014. More than 5,000 new cars were imported last year, of which 2,000 are still unsold.
- Garment sector
- According to World Trade Organization (WTO) data, Myanmar’s total export value of garments reached 986 million USD (8.9% of the country’s merchandise exports) in 2014, nearly triple that of the 2010 level of 337 million USD, or 3.9% of the country’s total merchandise exports.
- Myanmar’s garment exports jumped to 1.46 billion USD in 2015 and accounted for 10% of the country’s export (Myanmar Garment Manufacturing Association - MGMA).