Ramadan & Raya 2020: eCommerce Logistics and Last Mile Challenges in Malaysia
While eCommerce merchants can benefit from increased orders during Ramadan & Raya in Malaysia, it helps to be prepared operationally to address logistics challenges during this peak period.
March 25, 2020
This is part of our Southeast Asia Ramadan series, where we look into overcoming potential last-mile issues that could arise during Ramadan. Our earlier articles covered eCommerce insights for Indonesia, Malaysia, and Singapore, too. For all of these in one convenient package, check out our SEA Ramadan Guide 2020!
During the Ramadan-Raya season, eCommerce merchants who sell products such as modest fashion, home & living, travel items and more can look forward to an increased number of orders in Malaysia. However, to keep up with the increased demand, your operational capabilities must also be ready to take on the increased orders and changes in consumer behaviour.
To make your eCommerce experience smooth for your consumers in Malaysia, it is important to prepare for these additional orders by managing your products’ inventory and working closely with your logistics service provider. Since logistics service providers will also be experiencing challenges due to the change in behaviour such as balik kampung traffic jams (returning to one’s hometown), it helps to coordinate with your logistics service provider to address logistics challenges during Ramadan as they come.
However, in light of the COVID-19 pandemic, there is a lot of uncertainty on whether the Ramadan and Raya celebrations would be as grand as they were in the previous years. Nuclear families could still stay put in their respective home bases to celebrate, and eCommerce merchants could benefit from the increased online orders as consumers would avoid brick-and mortar stores to do their Ramadan-Raya shopping.1
But first, it helps to know how parcels enter Malaysia when your consumers are buying international products online.
The Klang Valley region, which includes Kuala Lumpur, is the industrial heart of Malaysia. This region has the highest eCommerce adoption rates in Malaysia.2 Since most eCommerce orders would take place there, cross-border eCommerce orders sent via air or sea freight would also enter Malaysia via that region through Kuala Lumpur International Airport (KLIA) and Port Klang (MYPKG) respectively. After that, it gets sorted at a warehouse to be placed on the right vehicle for last-mile delivery to your customers.
If the customer lives outside of the Klang Valley, getting the parcels to them after they land in Malaysia will differ depending on where the parcel enters and where customers live. If the parcel enters West Malaysia but the customer lives in East Malaysia, the parcel will be transferred via a domestic flight before it can be sent for last-mile delivery. Otherwise, last-mile delivery can take place if the shipment and the customer are on the same side of Malaysia. If you’d like a deeper breakdown of how the different stages of the shipping process, check out our B2C guide to shipping to Southeast Asia.
Looking to ship your products and ride on the Ramadan & Raya festivities? Janio can get your eCommerce products into Malaysia fuss free! Contact us to get started.
Now that you know how parcels generally enter Malaysia, we can now get to know how to solve logistics challenges that arise during Rama
Challenges Faced During the Ramadan Period
The Ramadan period will see many Malaysian Muslims fasting before dawn and after sunset. Muslims will be up around 4 am to 5 am to have their pre-dawn meal called Sahur before they begin the day’s fasting. While there isn’t a law in place to regulate working hours during Ramadan, Malaysian companies will typically have shorter working hours to cater to this change of lifestyle, and workdays will typically end at 3:30 or 4 pm during this time.3
These shorter working hours will also affect customs officers and delivery staff in logistics companies. This change in lifestyle also means that heavy traffic during Ramadan tends to occur between 4 pm to 8 pm.
To solve these challenges, it helps to know what measures your logistics provider would put in place in order to address decreased productivity and ensure that service levels are met.
Logistics providers in Malaysia would typically add more manpower and shifts to offset the shorter hours, and you can check with your provider if they do this too. Some companies may also outsource their manpower to subcontractors in order to meet the demand for logistics services during this time period. Ensuring sufficient manpower during the Ramadan period is what Janio practices as well.
Syed Faisal Alkaff, General Manager and Malaysia Country Head of Malaysia, shared, “While there will be shorter working hours during Ramadan, this doesn’t affect our deliveries to consumers as we will be ready to address the peak period by adding manpower. But this is done on a case by case basis depending on how much volume there is.”
With that said, the traffic jams from 4 pm to 8 pm could still lead to delays in deliveries. So it helps to pre-empt your customers about shipping delays that would happen from the traffic jams. Shipping companies in Malaysia would typically have 1-3 days of a delivery buffer from their usual service levels during this period, but it is always best to confirm this with your shipping partner.
Challenges faced During the Raya Period
With Hari Raya Aidilfitri being a major holiday in Malaysia, many Malaysian Muslims will be celebrating with their families back at their hometowns, causing a mass exodus from city centres like the Klang Valley.
With the balik kampung phenomenon in full swing during the days leading up to Raya, the roads within Klang Valley will clear up between 3 to 5 days before Raya. However, this means that major highways such as the North-South highway will experience congestion, causing deliveries to slow down during the week before Raya. To add to this, heavy vehicles will also be banned from highways in order to minimise car accidents during the holidays. These bans typically kick in 3 days before Hari Raya and will be in place until 3 days after Hari Raya. To check for when the road bans take place, you may refer to the announcements from Malaysia’s Road Safety Department.4
Logistics companies will also close during the public holiday period in Hari Raya, meaning deliveries won’t be taking place during the first two days of Hari Raya. To top it off, East Malaysia will also have specific regional holidays that follow closely after Hari Raya Aidilfitri, which includes the Gawai Dayak for Sarawak and the Harvest Festival for Sabah and Labuan. This would lead to a low turn out of workers on the days following the Raya celebrations as many Malaysians may still be celebrating with their families.
Now that you know about the logistics challenges that tend to occur during Raya, these are the ways you and your shipping providers can address them.
For one, the heavy vehicles restrictions do not necessarily apply to all delivery vehicles. Lighter trucks like 1 tonne and 3 tonne trucks typically have no issues passing through the highway, so it’s best to check with your shipping provider on whether the vehicle restrictions apply to them. It also helps to check with your logistics provider on when deliveries will stop taking place so that you can plan your fulfilment and manage expectations with your customers accordingly.
On this topic, Jaafar Al-Mashoor, a business support manager at Janio says, “It helps to set expectations with your customers during the Raya period, as last minute shopping tends to happen and logistics companies would face a low turnout of manpower at this time. Service levels should return to normal the second week after Raya at the latest.”
However, with COVID-19 looming large, domestic cargo flights may be suspended for some time in light of the Restricted Movement Order. This would cause logistics companies in Malaysia to possibly suspend their service when shipping from Kuala Lumpur to East Malaysia. To see how your deliveries are affected, check with your logistics provider to see how they’re handling your deliveries.
With regulations on COVID-19 changing quickly, it helps to stay tuned to government updates to alert your customers on these restrictions as they happen. Your logistics partner should also be providing you with service updates so that you’ll know how to manage the expectations of your customers on their deliveries.
Outside of these sudden changes due to COVID-19, experienced logistics service providers would know how to deal with these challenges during the Ramadan and Raya period in Malaysia. Considering the rise of eCommerce orders in Malaysia during Ramadan, having an eCommerce shipping partner who is experienced in dealing with these challenges while providing a smooth international delivery experience is key to winning over your Malaysian consumers during the Ramadan-Raya period.
Aside from ensuring that deliveries arrive on time, some shipping providers are able to facilitate cash-on-delivery payments. This allows you to win over older, sceptical eCommerce customers in Malaysia, as 34% of 45-54 year old shoppers prefer this method over cashless methods. By ensuring that you have your fulfilment capabilities covered, you’ll be able to delight your customers that are celebrating Ramadan this 2020.
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Want to learn more about Southeast Asia's Ramadan opportunities? Check out our series below: