SINGAPORE (May 14): Fresh out of university, Alvin Ea, whose family runs logistics company HUB Distributors Services, decided to start his own haulage business. But the finance graduate very quickly hit a roadblock. With just 15 trucks, Ea found he did not have the scale he needed to succeed.

The shipping industry was going through a downturn and shipping lines were consolidating in favour of mega vessels. When one vessel came in, truckers would have to transport so much goods that they would even need to rope in other truckers. But when a job was finished and the truck companies were waiting for another shipment to arrive, they found themselves stuck with too many trucks.

Business was made even more difficult by the stiff competition. “It takes more than five years to break even [as the] barrier to entry is very low,” Ea tells The Edge Singapore. “Container trucking is very commoditised. All trucks are almost the same [and may even] come from the same supplier.” The local haulage market is highly fragmented — logistics majors such as Poh Tiong Choon Logistics make up about 25% of the market, while the remaining 75% of the work is done by some 170 small trucking enterprises.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook