Southeast Asian states join world logistics 'club' to enhance trade

16, Jun. 2021

Enabled by key logistics partners such as airports, ports, and customs, the World Logistics Passport offers financial and non-financial benefits to traders and freight forwarders in rewards for increasing their trade. (Photo: WLP)
Enabled by key logistics partners such as airports, ports, and customs, the World Logistics Passport offers financial and non-financial benefits to traders and freight forwarders in rewards for increasing their trade. (Photo: WLP)

By Celine Chen

SINGAPORE, NNA - More Asian countries such as the emerging economies in Southeast Asia have joined the new World Logistics Passport (WLP), a freight-support loyalty initiative designed to facilitate a trouble-free flow of international trade and unlock market access for nations and corporations.

Malaysia, Indonesia, Thailand and Vietnam have joined as members and partners of the freight loyalty program established by the Dubai government to enhance trading opportunities between emerging markets across the southern hemisphere.

The WLP creates opportunities for traders and freight forwarders across Africa, Asia, Central and South America to improve existing trading routes as well as develop new ones while reducing cost and time.

It overcomes non-tariff trade barriers by fast-tracking cargo movement, reducing administrative costs, providing latest cargo information and facilitating movement between ports and air.

Launched at the World Economic Forum in January 2020, the private sector-led WLP has grown its network to 23 countries across Asia, Africa and Latin America within a year of operation.

With a mission to build an inclusive trading ecosystem, members also see the WLP as an integral part of the global economic response to boost international trade in the face of the COVID-19 crisis.

Apart from mega trading hubs like India, Brazil and South Africa, the program has also attracted the participation of global multinational corporations dealing in shipping, logistics, electronics and pharmaceuticals such as UPS, Pfizer, Sony, Johnson & Johnson, and LG.

The program has broadened its presence in Asia recently with the addition of new partners in India and the creation of a WLP Hub in Malaysia, said the World Logistics Passport last week when welcoming 10 new member countries.

The participation of Delhi International Airport, India's leading air freight destination, will enable traders in India to accelerate exports to various parts of the world.

New Delhi is a key station along major trans-Asia air cargo routes with over one million metric tons of goods transported to over 77 international destinations, noted WLP in its recent press statement.

The addition of Johor Port as a partner, makes Malaysia one of the latest hubs to join the WLP. The port in the south of West Malaysia is a core part of the flourishing Johor Strait shipping infrastructure.

With a distance-to-air of 45km to the nearest cargo airport, Johor Port has the potential to grow into a hub for global logistics, said WLP.

The participation of India and Malaysia within the network will enable increased access to trade routes in Latin America, Africa and Asia, said WLP.

It will also "shape resilient and substantial trade flows, while driving the shift toward high-value manufactured goods and seamless multi-modal trade," added WLP which held its inaugural global summit on June 8.

The virtual event saw the participation of CEOs, government ministers and representatives of leading international trade bodies.

Speaking at the event, Sultan Ahmed bin Sulayem, group chairman and CEO of DP World, an Emirati multinational logistics company, said: "The WLP is helping countries grow their economies and create jobs, facilitating access to new markets and increasing the resilience of the global supply chain in the process."

DP World, a global provider of smart end-to-end supply chain and logistics, was instrumental in setting up WLP after a pilot project saw trade between participants increase by more than 10 percent.

In April, Vietnam became the fifth country in Asia to commit to the WLP, after Thailand, Indonesia, Kazakhstan and India.

Vietnam Logistics Business Association (VLA), a leading trade body, registered as a partner and signed a framework agreement on developing Vietnam as a WLP Hub.

The move built on the signing of a multimodal trade cooperation agreement between Dubai’s Ports, Customs and Free Zone Corporation and the VLA in 2019.

VLA chairman Le Duy Hiep said, “Trade is critical to our country’s continued economic prosperity, with total trade amounting to 210 percent of GDP in 2019, according to the World Bank. It’s also vital in helping the government achieve macroeconomic targets put forward in its latest five-year plan.

Indonesia's participation in WLP is part of a wider collaboration between the UAE and Indonesia to strengthen bilateral relations, and create opportunities for private and public entities to improve existing trading routes and develop new ones to boost trade revenue.

Toto Dirgantoro, chairman of Indonesia National Shippers’ Council (INSC), said: “With the collaboration between INSC and WLP, it is hoped that Indonesian exporters can reduce logistics costs and improve the nation's economy with greater export opportunities globally specially to Middle East, South America, Africa, Eastern Europe and others."

At last week's WLP summit, participants highlighted the need for global freight resilience after countries across the world faced disruptions arising from pandemic lockdowns.

Policy makers were urged to strengthen the supply chain by investing in technological innovation, implementing sustainable policies and promoting quality engagement with the private sector.

The Global Freight Resilience Index saw Singapore, a bustling maritime hub in Southeast Asia, topping the 2021 rankings, as it has done so over the last five years. The Netherlands and Denmark came in second and third place respectively.

As European countries have continued to dominate the top 10 positions, there is a need for Latin America, Africa and Asia to up their game with programs such as the WLP to upgrade capabilities in logistics and trading.

Members and partners are expected to reap benefits such as better business revenue, increased fee generation for state trade authorities, tax revenue, easy connection of customs departments and global knowledge sharing networks.

WLP offers members access to three status levels, namely silver, gold and platinum, with benefits provided by WLP partners such as airport authorities, port operators, customs services and others that help to make supply chains more efficient.

Once a WLP program is fully operational in a country, members like traders and freight forwarders can anticipate an annual increase in trade of up to 5-10 percent on the average, said WLP.

Besides DP World, other pioneering members are Dubai Customs, Emirates airline and Dubai airport services provider Dnata. Joining them subsequently were leading UAE institutions like Etihad Credit Insurance, Dubai Multi Commodities Centre and flydubai airline.

WLP members are also committed to support businesses globally through complementary efforts already undertaken by other international organizations such as World Customs Organization and FIATA International Federation of Freight Forwarders Associations.

WLP membership is free and open to all countries that meet certain requirements.