Cambodia: A country in consolidation Riding on robust economic growth and big investments, Cambodia is scaling up to emerge as a major logistics hub in the ASEAN region
Cambodia clearly means business. With an economy growing at a smart 6.9 per cent, a government committed to development, investments pouring into infrastructure projects and trade touching new heights, Cambodia is all set to become the ASEAN region’s nodal nation – which is why it has all the ingredients of an attractive market for the logistics industry. ”Cambodia has the potential to become a logistics and production hub, and an innovation centre in the region,” said Sun Chantol, Cambodia’s Minister for Public Works & Transport, while addressing the country’s top logistics professionals at a recent industry forum, adding that the kingdom will do what it takes to clear the roadblocks and pave the way for future growth. ”Besides reducing the cost of transportation, we want to make Cambodia a centre for production and warehousing to serve neighbouring nations. With the proper infrastructure in place, particularly connecting production centres with ports and airports, we expect to triple imports and exports by 2025,” said an optimistic Mr Chantol.
With Cambodia poised to scale up its logistics infrastructure in a significant way, ECU Cambodia has timed its entry into the high-potential market to perfection. Commencing operations two years ago, ECU Cambodia is among the youngest operations of ECU Worldwide.
The enterprise is already a name to reckon with in the Cambodian market. ”We have successful and profitable operations in Cambodia now. ECU journey started off with a single trade-lane service in 2016 — Phnom Penh (PNH) to Singapore (SIN) and back — and we now have a regular consolidation service between the two key ports. In the past six months, we have successfully launched a new trade lane — from PNH to Busan (PUS) — and this service is also a success with our global and local accounts,” says Venu Rao, country manager, ECU Cambodia. He adds that ECU Cambodia is the pioneer with the new trade lane in the market being the only consol player offering this service.
With capability to offer LCL and FCL services for exports as well as imports, ECU Cambodia, with its expansive global muscle, is enjoying huge equity in the Cambodian market. ”As value addition, we also offer customs clearance, trucking and other services such as palletisation and repacking, giving our clients a complete logistics package,” says Mr Rao.
Cambodia has significantly benefited with the rising manufacturing cost in China, and it has emerged as a competitive alternate manufacturing base for relocation of light manufacturing within Southeast Asia vis-a-vis other countries in the region like Vietnam and Thailand. The garments and footwear industry alone accounts for 70 per cent of the country exports. Cambodia’s trade growth has been remarkable in the past five years, with exports and imports growing at a robust 16 per cent and 11 per cent, respectively year on year. ”The country’s top trading partners are Europe and USA, precisely the markets where ECU has a strong presence,” says Mr Rao.
Majority of the export shipments are nominated by the buyers in Europe and USA, and the freight forwarding companies carry chunk of volumes. ”With revival in Europe and USA markets, it is anticipated that the volumes from Cambodia to these markets will grow strongly in the years to come, offering us a good opportunity to secure the over and underflows from the buyer’s consol shipments,” Mr Rao adds.
With Cambodia EXIM growing at a phenomenal phase, it translates into big opportunities for the logistics sector and ECU Cambodia. Lack of infrastructure is a challenge for the trade and the existing ports at PNH and Sihnoukville are not sufficiently equipped to meet the increasing market requirements. The Cambodian government has roped in Chinese majors to build new road infrastructure and also cross-border road links from PNH to Bangkok in Thailand and Ho Chi Minh in Vietnam, which will go a long way in easing the woes of the logistics sector. ”With this back drop, we have planned the expansion of our trade lanes, in addition to our existing LCL consol services. Additionally, we would be exploring the opportunity of direct box from PNH HKG, and also to Dubai, which will complement the sea-air service offerings of major freight forwarding clients,” says Mr Rao.
The Cambodian market offers huge opportunity for buyers’ consolidation, and ECU Cambodia is working with group offices in Europe and USA to target such business opportunities.”We are the top consol player in the market, and we would be retaining our position with our service expansions to meet the emerging demand in the future,” Mr Rao says.
With its increased service options for export as well as import — from direct export service to SIN/PUS and HKG to and import service from PUS, SIN, HKG and SHA — ECU Cambodia provides more options to customers than any other consolidator. ”These value-adds make us very unique in the market and also competitive, as our costing is aggressive while reducing the multiple handling of cargo, given the direct service to multiple ports,” adds Mr Rao.
Retail product shipments being time sensitive and also prone to pilferage, tight transit times, visibility (through track & trace) and zero pilferage are the key requirements of the clients, and also for the success of consol product in Cambodia.
Ready for this, ECU Cambodia operates from a container freight station whose processes and practices meet the C-TPAT requirement, thus ensuring that the pilferages are zero and that the cargo is handled carefully to avoid any damages to the shipments.”In our sales visits and campaigns, we emphasize the advantages of our single network, online features of track & trace, sailing schedule and contact details of our worldwide offices on our website. We also promote the direct sailings to APAC hubs such as Singapore and Busan, from where we service global destinations directly,” says Mr Rao.
With a dedicated team of ten professionals and a vast network of associates, ECU Cambodia is well-equipped to meet the demands of the customer. The focus is split equally between exports and imports, and accordingly the team is assigned for the departments. Given the special requirements of the CFS in terms of following the order sequence and the need to monitor the loadings to ensure zero damage or pilferage, dedicated resources are posted at the CFS. ”Our teams ensure that the customers can see their cargo from the time it is loaded until it is released to the consignee, which is something that the Cambodia market has not experienced before with other providers,” says Mr Rao.
The upcoming planned services to Hong Kong and Dubai will further support ECU Cambodia’s endeavour to offer faster transit times to global destinations via these hubs. To service the Cambodian market, ECU Cambodia has a strong base in Phnom Penh, besides tie-ups with leading CFS to ensure the complete package of logistics services to the customers.
As a growing economy in the Asian region, Cambodia is increasingly becoming an important hub on trade routes. And ECU Cambodia is well placed to open up this market to customers.