MALAYSIA has the potential to become the next Asean logistics hub, but the vision can only be realised with a strong pool of local talents to support a collective move among industry players to create a robust logistics ecosystem.

According to the World Shipping Council, Port Klang is ranked 12th in the top 50 world container ports list, handling 12.32mil twenty-foot equivalent units (TEU) of containers in 2018. Tanjung Pelepas, on the other hand, ranked 18th with 8.96mil TEUs.

With the rapid rise of e-commerce and increasing interest in the Asean region – paired with the country’s strategic location along the shipping route – these numbers are set to rise. This means that more logistics professionals are needed to support the industry as it grows, said PKT Logistics Group Sdn Bhd group chief executive and managing director Datuk Michael Tio.

“Malaysia is at the most strategic part of the route for the shipping line. The Straits of Malacca has the busiest route in the world. Every single vessel that connects East to West needs to pass through here, so it is very obvious that we are next in line to be the Asean logistics hub, ” he shared.

That said, he pointed out that to become an Asean logistics hub like Singapore, domestic logistics companies need to move up the value chain to become seventh-party logistics (7PL) companies that provide turnkey solutions for clients.

A combination of 3PL and 4PL and covers managing the warehousing, freight, distributor and agents, while 4PL acts as an integrator that designs, builds and runs comprehensive supply chain processes.

He opined, “Singapore is the Asean logistics and transshipment hub because it is not merely doing customs clearance and trucking; it can also do procurement, assembly, repackaging services and re-export, marketing and everything else for their clients.”

Charting the path

According to Tio, Singapore employs around 200,000 logisticians in Singapore, but Malaysia is far behind the curve as the number of logistics graduates produced is insufficient to meet the demand.

As such, the key to unlocking the country’s potential lies in logistics professionals.

Tio believes education in logistics is the only way the nation can move closer towards becoming the next Asean logistics hub. More than a decade ago during PKT Logistics Group’s first transformation, they were looking into the future of the logistics business here. After doing research, Tio discovered that for a Malaysian logistics company to compete effectively with large multinational logistics providers that dominated the market, it would need expertise and know-how to scale.

He added, “We found out that there were no logistics graduates on the market at that point, so how did the MNC logistics providers manage to get their talents? The reason they can scale is because they already have a structured training programme to train logisticians.”

“With that crystal ball in front of us, being able to foresee what is going to happen in Asean and Malaysia in the next 20 years, we took up the initiative to educate our future human capital.”

PKT Logistics Group took up the challenge of championing logistics education through its subsidiary Peninsula College.

The college offers tertiary education courses ranging from certificates to Masters’ programmes in areas of study such as business administration and accounting. Currently, over 50% of its students undertaking its diplomas are in logistics management.

Melding industry with academia

PKT Logistics Group’s approach towards grooming future logisticians is markedly different as it believes in the ‘teaching in a working environment’ philosophy by having a college inside a corporate setting.

Highlighting the common concern on employability, Tio said that Peninsula College aims to address the missing link between academia, graduate availability and industry needs. It was not an easy task, however, as the public was not aware about logistics education in its earlier days.

“A logistician was not considered a sexy title to hold at the time, so we undertook a lot of initiatives for recruitment by telling them that if they studied logistics, their employment is guaranteed. That attracted people and they took up the risk of studying a logistics diploma, ” he said.

Scholarships worth RM1mil annually are also given out to deserving students seeking quality education with Peninsula College.

“Our philosophy for corporate social responsibility (CSR) is to give back to the community without expecting anything in return, but to bring it to a point where it can make bigger impact requires a more structured, focused and sustainable approach, ” said Tio.

Combining CSR and business

In addition, PKT Logistics Group created schemes such as Jom Bekerja Sambil Belajar (JBSB) as a way of giving back to society by alleviating the financial burden on parents and providing supplementary income or pocket money for students.

The programme gives students the opportunity to work part-time at PKT Logistics Group’s warehouse, finance and human resources departments.

By placing students across various departments, it enables students to acclimatise to the working world and earn while they learn to better understand and apply the theories they learn in class.

It also makes business sense, as the group now hires a completely local workforce, which has also boosted savings and the efficiency of its logistics processes.

Moreover, as most students opt to take advantage of the opportunity to work in the industry while studying, they become industry-ready graduates. The certificates they receive at the end of their diploma can also act as a part of their curriculum vitae.

“The certificates are meant to tell future employers that this graduate has work experience – not practical training – with PKT Logistics for two years. Imagine if you’re a diploma graduate. You graduate at the same time with other graduates, but you already have two years’ working experience and are able to fetch a higher salary.”

At the moment, PKT Logistics Group collaborates with public universities and polytechnics such as Politeknik Sultan Haji Ahmad Shah, Politeknik Seberang Perai and Universiti Utara Malaysia on various levels of knowledge sharing between academia and industry. Beyond that, the group is investing further into education and setting up its major campus called The Ship Campus in Batu Kawan Penang. Once completed, The Ship Campus will be able to accommodate over 4,000 students.