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With developed transport and internet infrastructure, and the fact it shares a border with Singapore, Malaysia is a great country for Singapore’s online merchants to expand their reach to.
Malaysia has at least 62.3 percent eCommerce adoption in 2019, where almost one in four Malaysians increased their basket size in 2020 thanks to lifestyle changes due to the pandemic.
Like most online shoppers, Malaysians can be price-conscious, hunting for promotions and discounts. During Ramadan for example, some Malay shoppers love colour coordinating their families’ outfits for attending open houses, prompting the need to shop online for matching clothes. To find out more details about what makes Malaysian online shoppers tick, check out our eCommerce Guide to Malaysia along with our Google collaboration article for updates on their shopping habits.
In Malaysia, the Klang Valley region is a highly developed metropolitan area that is responsible for most of Malaysia’s GDP and business activity. It also has the highest adoption rate for eCommerce in the country with one of the highest online sales occurring in the region.
If you’re planning to ship from Singapore to Malaysia, it is important to stay updated with any regulatory changes between these countries to plan for your logistics requirements accordingly. For example, during the recent pandemic, air travel and air freight have been affected causing constrained capacity, disruption to services, and destabilized freight rates.
Looking to test the demand for your products in Malaysia’s eCommerce market? Janio's modular and flexible B2C and B2B logistics solutions provide tailored solutions for you to get your online product orders into Malaysia without a hitch! Reach out to us now to find out more!
Your logistics needs will vary depending on what you’re planning to ship and how much will be delivered. However, most of the eCommerce stores that will ship a parcel from Singapore to Malaysia would usually follow these steps.
The first-mile stage in international shipping refers to the first stage of the shipping supply chain, where it either leaves the merchant’s address, be it a storefront, office, or warehouse. Prior to your goods leaving your storage facility, the product has to be packaged and labelled appropriately to facilitate smooth cross border shipping.
Packages may be subjected to rough handling during the shipping process. Having extra paddings for fragile items, like bubble wrap and packing peanuts, are recommended to prevent your products from bouncing around or damaged during shipping. To learn more about the best practices in packaging your goods, we’ve covered this topic in a previous article.
Additionally, shipping labels and the appropriate customs documentation must be made accessible for customs officers to facilitate their inspections. We have a guide on labeling your shipments which you can also find in our resources for B2C shipping to Southeast Asia.
Some warehouses that you can consider are the ones that possess transportation hub capabilities, and are able to prepare your parcels and have it ready for customs clearance in the same location such as those within Singapore’s Free Trade Zones.
Free Trade Zone warehouses' primary advantage is helping you defer tax charges on non-dutiable goods until they enter a country’s official borders, which helps with both your cash flow and can also act as a regional hub for your Southeast Asian operations.
As your shipment arrives at the port or airport, it would need to be cleared by Singapore’s customs for export. Here, the customs officers will inspect the parcel’s contents and shipping documents to determine if it’s exportable from Singapore. If you’re planning to ship B2B orders, you may want to check if you need to produce specific customs documentation for export in Singapore’s Customs website.2
After that, your goods need to be cleared for export by Singapore Customs at Changi Airport. In Singapore, exported goods are not subject to customs duties and Goods and Services Tax (GST) but all goods must be declared.3
If you’re shipping parcels directly to your online shoppers in Malaysia, your shipment usually needs to have the following documents ready in order to be cleared for export:
If the goods are dutiable or subject to control, you must obtain an export permit. Goods that are exempted from needing an export permit can be found on Singapore’s Customs website. This permit can be applied for via Singapore’s Trade.net portal.4 You must declare the FOB value of your shipment in the export permit.5
Be sure to work out with your shipping partner what kind of customs documentation is needed for your different shipments to Malaysia before the shipment starts to minimise problems at customs.
After checking these documents and clearing your shipment for export, your shipment is ready for uplifting onto a plane if you are using air freight, loading onto a ship for sea freight or continuing its truck journey.
For merchants shipping B2C parcels, air freight is the faster option, especially if you don’t have a consistent order volume and need your parcels to reach the destination country quickly.
To ship into the Klang Valley, your shipment will leave via Changi International Airport (SIN) and then enter Kuala Lumpur International Airport (KUL). Usually, airfreight’s speed makes it the preferred option for eCommerce merchants who want to test the market, as inventory will mostly be held in Singapore.
On the other hand, sea freight is generally more cost-effective for shipping in bulk at the expense of being slower than air freight. When managing your inventory, you’ll need to take into account the estimated delivery date so that you can plan out your supply chain accordingly.
The Klang Valley’s main port is Port Klang (MYPKG), with your goods leaving the Port of Singapore (SGSIN) if you’re shipping via sea freight. This mode of transport is usually preferred if you already have a reliable forecast of demand for your products in Malaysia, as sea freight is suited for stocking up large amounts of inventory at once. This forecast will allow you to make use of a local distribution centre within Malaysia for faster last-mile fulfilment.
With the causeway that is connected between Malaysia and Singapore, cross-border trucking is another viable option when delivering your eCommerce sales into Malaysia. The cost of cross-border trucking tends to fall between sea freight and air freight, and its delivery speed is also in between the two options as well. Depending on your needs, this option serves as either a cross-border delivery strategy or a local distribution strategy.
Once your item arrives at Malaysia’s airport or port, your shipment will be transported into a customs warehouse for clearance. This is where the customs officers will inspect your parcel and shipping documents to determine if your product is allowed to enter Malaysia.
To clear customs for importing into Malaysia, you or your shipping partner would generally need to provide the following documents:
If your item is below Malaysia’s de minimis rate of MYR 500, then there is no need to pay import duties and taxes to the customs office. The de minimis rate refers to a value threshold where no duties and taxes are charged if the shipment’s CIF value, which includes your good’s price, shipping fee, and insurance costs if any, is below that point. However, this only applies to goods that are delivered via air freight.
On the other hand, if your goods exceed the de minimis threshold, import duties and taxes will be levied on your shipment. You would have to pay a sales and services tax (SST) of between 5 to 10 per cent and import duties depending on the product category as declared by the harmonised systems code (HS code). You may find out the percentage of your import duties paid through the Royal Malaysian Customs Department’s website.3
If you’re shipping a B2C parcel, you can choose to either pay for the import duties and taxes yourself or let your customers pay for the import duties and taxes. This is determined by the incoterms Delivered Duties Unpaid (DDU) and Delivered Duties Paid (DDP). While we strongly encourage you to opt for DDP to keep your shipping experience smooth for your B2C customer, it helps to familiarise with what these arrangements mean.
Once your shipment has cleared customs, it will enter the distribution stage of the shipping journey. If the consignee’s address is within West Malaysia, your B2B shipments can be delivered directly to the address.
However, B2C parcels need to be at a transport hub to sort them out before the last mile journey can begin. However, if the address is in East Malaysia such as Sabah or Sarawak, an additional domestic flight will be needed before your shipments, be they B2C or B2B, can be sorted and delivered.
The last mile delivery stage is where your parcel will be sent from the destination warehouse to your consignee’s address. In Malaysia, this stage of the delivery is done via road vehicles. During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee.
Rates and charges for international shipping can vary greatly especially in the international shipping segment due to many foreseen as well as unforeseen factors.
Case in point, during the pandemic, the lack of international air travel affects international deliveries. This is because a large proportion of air freight deliveries are shipped in the belly hold of passenger planes. For ground logistics, the Movement Control Order or similar rule has significantly affected ground-based deliveries as well. Such incidents affect the speed as well as the costs of making such deliveries where not a single logistics company will be spared from such a situation.
Delivery rates are calculated based on the chosen transportation method, origin and destination of the delivery as well as the volume or actual weight of the shipment whichever is higher. Below is a formula for calculating volumetric weight:
Length (in cm) x height (in cm) x width (in cm)/ 5000 = Volumetric weight in kgs rounded up to nearest 0.5kg
Sea freight saves you money compared to air freight if your order is larger than 2 cbm. However, you don’t get those economies of scale for items that aren’t that big like small cartons that take up between 0.5 to 0.9 cbm as you’ll end up paying for unused space. This is where air freight can be more economical than sea freight.
A trusted and reliable logistics provider will be your best business partner to solve all your logistics issues, providing you sensible solutions for reliably shipping your goods locally and/or worldwide at the best price possible.
Now that you know the full process of international shipping from Singapore to Malaysia, you’re in a better position to choose a suitable shipping partner who can cover the entire logistics supply chain from first mile to last mile. When choosing a logistics service provider, it helps to consider the speed, delivery experience, reliability and all your whole supply chain before requirements before choosing a shipping solution.
If you'd like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, talk to us now.
We have other guides on how to ship from Singapore to Southeast Asian destinations here:
For more information on Singapore as a destination, we also have these guide here:
References:
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