The logistics challenges facing markets in Asia Pacific (APAC)


By Komal Puri | October 13, 2022

Logistics in Asia

Sun Tzu, the Chinese military strategist and philosopher once famously said, “the line between order and disorder lies in logistics.” Over 2,500 years later this idea still holds true in the Asia-Pacific (APAC) region, as it does worldwide. The logistics market in APAC was worth $3.9T USD in 2020, the highest region by logistics market volume in the world - by a long shot (coming in at #2, the North American logistics market was worth $2.0T USD in 2020). This leading logistics position for APAC can be attributed to the region’s relative importance in manufacturing and supplying most of the world’s trade goods.

But APAC isn’t just the factory of the world and its logistics heft isn’t due solely to the export reputation the region has. Logistics growth within the region is driven by consumer growth and increased consumption. By 2025, 30% of world consumption will be in Asia and the region is expected to account for 57% of the growth of the global e-commerce logistics market between 2020 and 2025. While China, Japan and India will remain the largest logistics markets in Asia; Indonesia,Vietnam and Thailand are likely to grow most quickly. APAC as a whole is a key growth engine for global logistics.

For logistics companies to capitalize on this growth they will need to overcome a specific set of challenges unique to the industry and to the APAC region. To do so, logistics executives will need to harness the capabilities offered by new supply chain technologies before their competitors can. Newer, more flexible tech-enabled logistics platforms that can provide a more customized fit are likely to gain the attention of lucrative logistics customers.

CEP industry trends: Royal Mail's drones, FedEx's EVs and more

The Challenges

Diversity & Fragmentation

The APAC region is immensely diverse across cultures, languages, political systems and legal frameworks. Countries like Japan and Australia are leaders in digital commerce and transport infrastructure, while countries like Thailand and Vietnam are quickly following in their footsteps.

For logistics companies operating across multiple markets, it is important to employ standardized solutions that can be tailored to local needs. Strong local talent and skilled regional resources can enable both localized expertise and regional cooperation across many markets in parallel. Furthermore, there is great disparity within countries themselves as economic growth has been uneven between urban and rural areas. Countries should not be treated as a single market (as they are in the West) but as diverse markets nuanced by emerging second and third-tier cities. The lack of logistics standardization in APAC further complicates matters. Invoices written in different formats, currencies and languages can be a challenge. Confirming accuracy and gaining region-wide visibility over freight spend can be nearly impossible without a strong and reliable process in place.

Predictable, configurable technology platforms enable logistics companies to overcome the diverse landscapes within the APAC region by allowing for more agile, adaptable supply chains and logistics operations.

Bain, a consultancy, has mapped out the diverse APAC logistics and delivery landscape, measuring key components such as population density, last-mile delivery costs and congestion indices.


Underdeveloped civic infrastructures make it almost impossible to predict delivery times, and cause logistical breakdowns that often lead to failed deliveries. Poor infrastructure is a leading cause for inefficiencies in APAC supply chains and last mile delivery. Strong urbanization in the region as the population migrates quickly from rural areas to cities has been a challenge for city planners and infrastructure improvements oftentimes have been unable to keep up with urbanization. Metropolitan traffic and inefficient routing have resulted. To combat this, in many APAC countries, motorbikes are the most common vehicle used for delivery, but their small size and design are not ideal for delivering and handling all items. Rural areas, on the other hand, lack quality infrastructure outright, which makes it difficult for deliverers to access certain regions in developing countries. This results in higher capital and operation costs for shippers and carriers.

Infrastructure quality does differ between countries and even within them, however. China boasts the world’s largest high-speed rail network and some of the largest container ports in the world, making it a leader in first-rate infrastructure. Take a trip to a third-tier Chinese city such as Guilin, however, and you may think otherwise. APAC citizens have their own opinions about their country’s infrastructure quality. Chinese citizens are most satisfied with their country’s infrastructure quality while Malaysian citizens are least satisfied.

Retailer infrastructure is important in APAC as well, as the brick & mortar landscape is a bit different than in other parts of the world. APAC countries, aside from Australia and Japan, do not have a lot of brick & mortar selling space when compared to the West (see chart on right). Growth in APAC is largely being found online and retailer strategies are taking this into account. With reduced store space, however, omnichannel fulfillment can become challenged because stores, which are typically located near a retailer's consumer base, are no longer a possible fulfillment method.

Network planning, vehicle scheduling and route planning, enabled by tech-driven supply chain platforms, can allow logistics managers to handle even the most difficult infrastructure in the region.

Evolving Consumer Expectations

Fast moving e-commerce and digital retail platforms in APAC are creating heightened expectations from consumers when it comes to product availability and delivery. This in turn is putting consumer expectations and their experiences at the forefront of retailer concerns, so much so that when asked what the leading factor is when deciding where to locate logistics facilities, 67% of supply chain managers cited locations that were in close proximity to consumers. Retailers are looking for ways to improve their supply chains to gain advantages over their competition and they are not afraid to ditch existing logistics partnerships in favor of newer, more digital supply chain partners. Some of these new players include asset-light outfits such as Sendle and Instatruck, start-ups that offer low-cost deliveries by buying untapped capacity in other courier networks at a discount. Other logistics partners utilize machine learning and artificial intelligence tools to alert consumers half an hour before the parcel arrives.

Only 22% of APAC consumers report having product delivery experiences that meet their expectations every time. Delayed deliveries, long wait times and a lack of proactive communications are preventing positive consumer delivery experiences. Logistics companies and retailers alike are already improving the consumer experience with critical technology tools to become faster, cheaper, more flexible and more sustainable. Those that fail to adapt may lose out.


The trend towards sustainability initiatives and eco-friendly practices is global. In APAC, a region that is more heavily polluted than others (see right), consumers are becoming more vocal about their desire for products and services that have minimal environmental impact. And they want companies to help in this effort and be transparent about their sustainability initiatives and impacts on the environment. 82% of APAC consumers want companies to be transparent about their environmental impact.

Logistics companies today are now able to measure and minimize their CO2 emissions throughout their operations, addressing end consumers’ desire to have their orders delivered on time and with minimal or zero carbon emissions. With sustainable delivery fleets, optimized route orchestration and carrier allocation systems, logistics companies and their customers can reduce their carbon footprints. And with visibility and tracking technologies, companies can now calculate their carbon footprints and communicate results to supply chain managers and end consumers alike.

Technology Solutions

Logistics companies in the APAC region have been slower to adopt supply chain technologies when compared to other regions in the world. This creates tremendous competitive advantage opportunities for those that adopt tech-enabled solutions before their competitors do. One APAC transportation and logistics company logged a 13% increase in pickup and delivery productivity soon after piloting it. With the right technology platforms, tools and partnerships in place, here are a few things APAC logistics companies can unlock to get their deliveries right, gain competitive advantages, increase pricing power, and bring in new and repeat customers:

Flexible Customer Solutions

Adapt to customer requirements with flexible, digital solutions that enable more agile, adaptable supply chains across nuanced APAC environments

Network Management

Manage a network of logistics & 3PL customers with predictive intelligence through a single pane of glass

Dynamic Fleet Type Management

Minimize transportation costs by dynamically managing across internal, external and gig fleets, and find the right fleet type whether in rural, urban or weak-infrastructure locations

Supply Chain Visibility

Maximize visibility of your supply chain to make proactive decisions in any market environment

FarEye, the first choice for last mile

Komal puri

Komal Puri is a seasoned professional in the logistics and supply chain industry. As the Senior Director of Marketing and a subject matter expert at FarEye, she has been instrumental in shaping the industry narrative for the past decade. Her expertise and insights have earned her numerous awards and recognition. Komal’s writings reflect her deep understanding of the industry, offering valuable insights and thought leadership.

Komal Puri
Sr. Director of Marketing | FarEye

Share this article

Open Twitter Share on Linkedin

Related resources

Last mile management
What is Last Mile Management? What are its Benefits?
Read more
Vehicle route optimization
Route Optimization
Vehicle Route Optimization: Modern-day Challenges & Solutions
Read more
3pl last mile delivery
3PL Last Mile Delivery: A Guide to Solve 3PL Last Mile Challenges
Read more