As one of the Tiger Cub economies, Malaysia has always been an economic powerhouse in Southeast Asia. With developed transport and internet infrastructure, and the fact it shares a border with Singapore, Malaysia is a great country for Singaporean online merchants to expand their reach to.
In 2019, eCommerce adoption in Malaysia stood at 62.3 per cent. Malaysians also tend to be price conscious, love promos and discounts, and during Ramadan, some Malaysian shoppers also love colour coordinating their families’ outfits for attending open houses. To find out more details about what makes Malaysian online shoppers tick, check out our eCommerce Guide to Malaysia, updated for 2020.
In Malaysia, the Klang Valley region is a highly developed metropolitan area responsible for most of Malaysia’s GDP and business activity. It also has the highest adoption rate for eCommerce and is likely where most of your online store sales will be delivered to in the country.
However, with the recent COVID-19 situation, air travel and air freight have been affected, which in turn affects deliveries via air freight. At the time of this writing, Malaysia has slated for its Movement Control Order to around May1. During this period, only selected services are allowed to run, which fortunately also includes eCommerce. If you’re planning to ship from Singapore to Malaysia, it helps to stay updated with any regulatory changes between these countries to adjust your logistics planning accordingly.
Looking to test demand for your products in the Singaporean eCommerce market? Janio’s modular and flexible B2C and B2B logistics solutions provide tailored solutions for you to get your online product orders into Singapore without a hitch! Reach out to us to find out more!
Your logistics needs will vary depending on what you’re planning to ship and how much will be delivered, but most deliveries 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 padding for fragile items, like bubble wrap and packing peanuts, is recommended to prevent your products from bouncing around or getting deformed 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 accessible for customs officers to inspect the shipment. We have a guide on labeling your shipments which you can also find in our resources for B2C shipping to Southeast Asia.
Some warehouses you could also consider have 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 and 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
When it comes to freight, shipping your goods from Singapore to Malaysia can be done via airfreight, sea freight or cross-border trucking across the causeway.
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.
However, due to the limited number of flights due to the COVID-19 pandemic, prices for air freight have increased from the lack of cargo space. The limited number of flights may also cause delays and affect the delivery timing for shipments.
On the other hand, sea freight is generally more cost-effective for shipping in bulk. However, it is slightly 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 Singapore and Malaysia being connected by the causeway, cross-border trucking is another option to consider 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 roughly between the two as well. Depending on your needs, this option serves either a cross-border delivery strategy or a local distribution strategy well.
With the COVID-19 pandemic around, sea freight and cross-border trucking could be good alternatives to air freight considering the shortage of available international flights. While slightly slower compared to pre-COVID air freight timings, they are still preferable to facing possible air freight delays during this period.
Once your item arrives in 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 and determine if your product is allowed to enter Malaysia.
To clear customs for import 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 and 10 per cent and import duties depend 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 vans. During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee.
Now that you know the full process of shipping your items 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 cost, speed, delivery experience, and your whole supply chain before committing to a shipping solution.
To impress your potential customers in Malaysia, it helps to have a reliable shipping partner that can deliver on time. That way you can impress your customers with your hottest items in stock while wowing them with efficient eCommerce delivery speeds.
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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:
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Find out what a freight forwarder does, the advantages of using a freight forwarder and how to maximise your bookings with one here!
Which mode works best when budgets are tight? How about when timing is everything? Find out how air freight and sea freight stack up within Southeast Asia