Malaysia Logistics Sector Poised for Steady Growth Amid E-Commerce Boom and US-China Trade Shifts: Kenanga Research

Malaysia's domestic logistics sector is expected to maintain steady growth into 2026, driven by a surging e-commerce market and beneficial trade diversions.

Kenanga Research highlights that the sector's resilience stems from its domestic focus, shielding it from global trade slowdowns caused by Middle East tensions and port congestions.

E-Commerce Boom Fuels Warehouse and Distribution Demand

Historically, Malaysia's total trade grew 9.2% in 2024, but moderated to 5.4% from January to October 2025, with a trade surplus of MYR 125 billion.

The booming local e-commerce gross merchandise volume, projected to expand at a 5% CAGR from MYR 1.2 trillion in 2024 to MYR 1.5 trillion by 2027, is spurring demand for distribution hubs and just-in-time delivery systems.

Key impacts include the need for warehouse decentralization, efficient automation, and interconnectivity with customer systems to cut transportation costs and de-risk supply chains.

Strong demand for cold-storage warehouses is emerging due to the rise of online grocery startups, further boosting the third-party logistics (3PL) segment.

Trade Shifts and Competition Challenges

US-China trade tensions are diverting flows to connector economies like Malaysia, with exports to the US surging 33.9% year-on-year in January despite tariffs.

However, intense competition from Chinese logistics players, entering via FDI with aggressive pricing amid rising costs, constrains local firms' gains.

Teleport reported a 10% year-on-year revenue increase in Q4 2025, exemplifying the sector's domestic strength.

Looking ahead, Kenanga Research anticipates continued support from a global tech up-cycle led by AI demand, a resilient US economy, and ongoing trade realignments.

This positions Malaysia's logistics industry for sustained expansion, balancing opportunities from e-commerce and trade shifts with strategic adaptations to competition.