Overall Logistics in Myanmar
The logistics industry in Myanmar has undergone significant development in the past few years, spurred by enhancing 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 treated via border trade with air freight and railroad trade accounting for the rest.
- However, as a growing economy, Myanmar has experienced a surge in request for roads.
- The total number of registered motor vehicles rose beyond five million in two thousand fourteen 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»).
Facilitation
The government implemented Individual Trade Certificates (ITC) to boost legal border trade. This includes approval of fresh trade licenses and establishment of extra 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 inbetween the two countries since two thousand twelve 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, eighty km northeast of Yangon near Bago
- Expected to have an initial capacity of twelve million passenger per annum, making it the largest airport in Myanmar
- 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 two billion USD loan from Japan (Global Fresh Light of Myanmar – twenty four August 2016)
- The project is scheduled to begin in 2017, and is expected to be accomplish by 2023.
- Plan for implementation in three phases 1) very first phase will be inbetween Yangon and Taungo, Two) 2nd phase is inbetween Toungoo and Yamaethin and Three) the third phase will be inbetween Yamaethin and Mandalay
- Upon completion, the travel time inbetween two cities will be eight hours – the journey presently takes fourteen hours.
- The fresh government of Myanmar is planning to buy two hundred fresh coaches from Korea.
The port of Yangon, a downtown sea port situated some 23-30 km from Yangon’s industrial zones, now treats about 90% of Myanmar’s outward 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 treating processes.
However, major fresh special economic zones (SEZs) are emerging to serve as fresh development knots to attract large-scale investment from overseas.
- The Thilawa SEZ
- Phase one of the four hundred hectare launched in September 2015. Phase two of Zone A is expected to be finished by 2016.
- The construction of Zone B (inbetween 500-700 hectares) is expected to be ended in 2022, and is due to embark at the end of 2016.
- Sea ports in Yangon have limited capacity to treat large shipments
- The Dawei SEZ
- 7-year project lasting from 2015-2022. Initial phase development launched in 2015, with two thousand eighteen 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 very first phase expected to begin 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 latest years.
- Construction
- Cement import value enlargened by 29.7%: from 157.Five million USD in FY 2012-2013 to 204.Two 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% inbetween 2014-2018, driven by real estate sector boom and government infrastructure projects (Solidiance)
- Automobile sector
- Myanmar car importers are fretting that auto sales will proceed to drop until the end of two thousand seventeen if the government does not come up with a clear and comprehensive auto policy (Consult Myanmar – twelve 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 permitted 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 permitted since 2014. More than Five,000 fresh cars were imported last year, of which Two,000 are still unsold.
- Garment sector
- According to World Trade Organization (WTO) data, Myanmar’s total export value of garments reached nine hundred eighty six million USD (8.9% of the country’s merchandise exports) in 2014, almost triple that of the two thousand ten level of three hundred thirty seven million USD, or Three.9% of the country’s total merchandise exports.
- Myanmar’s garment exports leaped to 1.46 billion USD in two thousand fifteen and accounted for 10% of the country’s export (Myanmar Garment Manufacturing Association – MGMA).