Posted on 22/06/2016 by Simon Bruce
It has now been over 15 years since some of the 3PL (third party logistics) companies from Asia, and indeed from across the world, have been operating in Myanmar. Well known names such as DB Schenker and the Phee Group have been slowly growing by partnering with international and local brands and improving the distribution of goods to all areas within Myanmar.
For a long time logistics was said to be the key to success for any consumer brand in Myanmar. I was once told by a senior member of DKSH that if you can get a product to a remote area of the country, it was as good as sold.
In recent years this has changed. As more and more consumer products have entered Myanmar, we have seen improvements in road and transport systems. Competition for sales has increased. Marketing and promotions have become the key elements.
However, logistics is once again going to play a key part. We have seen rapid improvements in the quality of the Internet, plus improved stability of electricity supplies. 3PLs, as well as in house warehouse operations, have begun to implement WMS and TMS systems to improve inventory control and tracking of deliveries. This has all led to improved efficiencies and accuracy, reducing labour costs and allowing more competitive pricing options in the country.
These improvements are not only visible within international companies. Local company J.D.S. Co., Ltd. (part of the Capital Diamond Star Group), who are one of the 4 major pharmaceutical distribution companies in Myanmar, are currently going through a major consolidation and improvement process with the technology of their operations.
All of this has changed the logistics environment. There have been very rapid improvements of logistics services and their quality in Myanmar. Not only have existing 3PLs expanded and improved their technology and their available services, but now we also see a number of global players making a big play for the Myanmar market.
Companies like the Phee Group and KOSPA (a joint venture between local company Yoma Strategic Holdings Ltd and Kokubu & Co from Japan) are improving the storage and transport of Food & Beverage and bringing to Myanmar international standards in Cold Chain. This will further improve the quality and range of products available for supermarkets and restaurants across the country.
DHL, who already have a presence in Myanmar with their Express and Freight Forwarding businesses, will be bringing their supply chain solution business to Myanmar in the near future.
Although many companies will maintain their warehouse operations in-house, companies with foresight will see the flexibility offered by 3PL and realise that this will be the best option for such a dynamic and ever changing market. At least, this will be the case for the next several years in Myanmar.
The expansion I foresee in the 3PL market over the next 2 years will bring Myanmar's logistics capabilities into the top class level for South East Asia. It will provide amazing opportunities for businesses and deliver huge benefits to them and their customers. Many industries are expanding in Myanmar. We are convinced that the 3PL industry will be one of the fastest growing.