Cellcard Sponsor Banner
Home Industries Transportation & Logistics

Transportation & Logistics

This section provides an overview of the transportation and logistics sector in Cambodia, and the range of freight services and equipment currently available.

Cambodia may not yet have a highway rivalling the Autobahn or docks rivalling the Port of Shanghai, but the “Little Kingdom that Could” is quickly bringing its transport and logistics infrastructure up to international standards. With major roadworks and infrastructural projects underway, and international-standard transport and logistics companies bringing world-class services to the country, there’s no shortage of options to get you, your things or your products from A to B. In this issue, we speak to our panel of industry experts about the industry as it stands today, we look at the best ways to ship goods in, out and around the country, and we gaze ahead at developments in the pipeline and the future of the industry in Cambodia.

If you can’t find you’re answer here, just ask us at B2B and we’ll point you in the right direction.

  • Cambodia is served by most major forms of transportation, with the internal rail network and domestic flights currently being the weakness links in the Kingdom’s connections.
  • Roads and rivers, ports and border crossings have all been expanding in recent years to accommodate the growing need of Cambodia’s economy and its increasing population.
  • The most popular way to travel domestically is by bus or minivan, with internal flights connecting the capital, Sihanoukville and Siem Reap.
  • The introduction of new domestic airlines will inevitably drive down air freight prices and increase flight frequency.
  • Logistically, air freight is a better service, as it is faster than sea and generally safer.
  • However, air freight is still considerably more expensive and has far less capacity so currently it’s really only useful for certain kinds of products going to specific destinations.
  • Sihanoukville and Phnom Penh are Cambodia’s two largest international ports, covering general import and export requirements, along with all the necessary services, including full customs and warehousing services.
  • Sihanoukville Autonomous Port (SAP) has the greatest capacity due to its deep-sea port and direct feeder capacity to Singapore and other larger ports.
  • “Feeder vessels” loaded at Sihanoukville then travel to regional hubs where cargo is loaded onto a larger ship, known as the “mother vessel”, and transported to its final destination.
  • However, the Port Authority announced in 2016 that SAP will undergo vast modifications, making it deep enough to host mother vessels as soon as 2020.
  • This expansion will lower costs of international freight to and from Cambodia, and increase efficiencies significantly.  In June 2017, SAP launched itself on the Cambodia Securities Exchange (CSX), using its IPO as a means to fund these expansion plans.
  • Phnom Penh Autonomous Port (PPAP) and its subsidiary dry port have emerged as a valid alternative to Sihanoukville.
  •     As Phnom Penh is a river port, freight must go to Vietnam via barge before being transported to another deep sea port for further transportation.
  • However, after the construction of the new Container Terminal at Kandal Province, PPAP is taking bigger and bigger slice of the whole containerised market share.
  • A $12-million development plan was announced in 2015 to double the annual throughput capacity of the new container terminal in Kandal, as reported by the Phnom Penh Post. With container traffic growing at 10 to 20 per cent a year, the port operator is already looking ahead to a new phase of expansion, which is set to increase the terminal’s annual throughput capacity to 500,000 TEUs by 2028.
  • The choice of which port to use will always relate to the desired routing of the freight in question.
  • In terms of freight handling, both ports have capability and capacity to handle almost the same types of commodity including containerised, general cargo and passenger. However, PAS is more advanced in handling oil freight owing to its dedicated oil terminal, as well its proximity to the oil exploration area. PPAP has quite a number of short term projects to increase its capability to service agricultural products more effectively due to its strategic hinterland connection location.
  • However, any kind of bulk cargo and heavy project cargo would likely need to go through Sihanoukville due to its additional capacity.
  • This means any shipments of bulk or heavy cargo from Phnom Penh must typically be trucked by road to the port in Sihanoukville (about 230km).
  • Shipping costs are currently amongst the highest in the Indo-China region, especially compared to economical rivals such as Vietnam and Thailand.
  • During a recent rice tender export to the Philippines, the overall export cost from Cambodia was found to be at least 8% higher than both Thailand and Vietnam.
  • Mediocre infrastructures, limited service providers’ capacity, lack of knowledge and know-how, lack of connectivity between ports, warehouses and transport lanes add to the problems and costs.
  • The value of Cambodia’s international trade surged to $22 billion last year on double-digit growth of both imports and exports, according to newly released data from the Ministry of Commerce.
  • Total container throughput at Cambodia’s sole deep-sea port, Sihanoukville Autonomous Port (SAP), amounted to 400,187 20-foot-equivalent units, or TEU, in 2016, an increase of 2.1 percent compared to 2015. Meanwhile, the Phnom Penh Autonomous Port (PPAP) recorded a total throughput of 151,781 TEU, a 4.8 percent increase from the previous year.
  • A range of positive administrative and procedural changes have taken place at Sihanoukville port recently. This has led to a more consistent and predictable timetable, a move towards more international standards of quality of service and efficiency and predictability.
  • However, the overall port handling cost in Cambodia is still relatively higher than other neighbouring countries.
  • Cambodia’s infrastructure continues to improve thanks to road improvements on many of the national roads. Recent reparation work on the road from Phnom Penh to Siem Reap has notably improved driving conditions.
  • The introduction of the Kien Svay sea port in Kandal Province and the launch of the Toll Royal Railway service that links Phnom Penh and Sihanoukville have also helped boost the transportation and logistics sectors.
  • A commercial train service linking Cambodia’s two ports at Phnom Penh and Sihanoukville was first launched in 2013 with help from the Australian government and Asian Development Bank. The line between Phnom Penh and Sihanoukville is now fully operational, however, it is underutilized.
  • Toll Royal Railway (TRR), part of the Royal Group, is the new owner and operator.
  • Rice and other heavy cargoes are particularly suited to rail freight as they are generally not wanted by trucking companies. For anything lighter, such as garments, the hassle of transfer to rail at the start and the end of the journey negates any benefit beyond direct cross country trucking.
  • A train route is set to connect Poipet to Thailand and could eventually carry passengers from Phnom Penh to Bangkok.
  • The introduction of ASYCUDA computerized system used for goods clearing process, as well for managing trade statistics, was already an undeniable great initiative from the government to support the trade growth and enforce trade compliance.
  • In addition, the setup of different project teams to develop templates, customs procedures, instructions and other legal instruments have been seen as a critical enabler for investors and traders to change their investment perception of Cambodia.
  • In 2015, Chinese shipping giants Cosco and China Shipping expressed interest in setting up offices in SAP, signing agreements with the port to create a direct route to China for Cambodian exports. Hoewer, SAP’s director general Lou Kim Chhun said in 2016 that while COSCO was currently operating one port call every two weeks, CSCL had decided to scale back its operations and was instead booking slots at the port only when there was a critical mass of containers.
  • According to an article in the Bangkok Post, the Japanese government has approved a US$200 million loan to Cambodia to build a second deep-sea port in Sihanoukville. The new port, adjacent to an existing one, will be 350 metres long and 14.5 metres deep, and equipped with modern facilities allowing large vessels to dock.

Cambodian Transport Top Tips

Here, we ask our panel of experts to share their top tips in the transportation and logistics sectors.

  • Shipping to and from Cambodia remains relatively cheap, especially from the Kingdom to China, yet you need to consider the quality of the service and the resulting delivery.
  • In order to cope with the growth and more demanding customers in this highly competitive markets, shipping companies need to continue to focus not only on basic requirements, including containers or vessel space but also on the soft element of the services, such as e-commerce.
  • Competitive cost and economy of scale plays the vital role, which can be a challenge when operating in Cambodia as it is a relatively small market.
  • Moving personal items in or out of Cambodia is simple thanks to a range of relocation services.
  • A key factor to remember is to have the right documents in advance and to purchase insurance against theft or damage.
  • It’s a lot easier to relocate to Cambodia now than it was a few years ago.
  • Historically, those looking to work or stay here for any lengthy period of time would tend to arrive with a few suitcases and get on with it.
  • But as the shift of people arriving becomes more business focused they are coming with much, much more.
  • This has led to more services launching.
  • Many removal companies begin to offer self-storage facilities, something that is not available in abundance in Phnom Penh.

Moving stuff in Cambodia

Everything you need about transporting people, products and anything else you can imagine in, out and around Cambodia.

  • Most people arrive into Cambodia either by air or by road, though it’s also possible to arrive by boat from Vietnam, crossing the border at Chau Doc.
  • In all cases, passengers must immediately proceed through passport control, immigration and customs.
  • This is a relatively easy process, especially if arriving by air as both tourist and business visas can easily be bought upon arrival at either of the country’s international airports.
  • Customs procedures are similar to neighbouring countries, involving a form asking if you have anything to declare including cash (or other financial instruments) to a value in excess of $10,000, plants, animals, electronic equipment and so forth. Those visitors who arrive by boat are required to land before going through passport control.
  • Most people travel around Cambodia by road, either in buses, taxis, cars or motorcycles – a fairly inexpensive way of travelling.
  • River transport is for the most part constrained to ferry crossings, though there is a daily service between Phnom Penh and Siem Reap.
  • A commercial train service linking Cambodia’s two ports at Phnom Penh and Sihanoukville was first launched in 2013 with help from the Australian government and Asian Development Bank.
  • The line between Phnom Penh and Sihanoukville is now fully operational, however, it is underutilized.
  • Toll Royal Railway (TRR), part of the Royal Group, is the new owner and operator.
  • Rice and other heavy cargoes are particularly suited to rail freight as they are generally not wanted by trucking companies. For anything lighter, such as garments, the hassle of transfer to rail at the start and the end of the journey negates any benefit beyond direct cross country trucking.
  • Recently, applications requesting repairs to the northern rail line from Phnom Penh to Poipet at the Thai border have been made by TRR to the Cambodian Government.
  • While no decision has been made regarding these requests as of yet, given that the opposite rail line inside Thailand already links to Bangkok from Poipet, there is a real possibility of a direct rail line between Phnom Penh and Bangkok in the not so distant future.
  • A professional relocation service can help you navigate the administrative burden when moving your business, home and possessions to Cambodia.
  • And relocating to the Kingdom couldn’t be easier, thanks to improved services and shorter waiting period for goods to be delivered. It now takes between five and seven days to transport goods from the port to a customer’s house, compared with 10 to 14 days two years ago.
  • With the right (easily obtained) documents, as well as for NGO and government workers, it has never been easier to bring your home and personal effects with you when you relocate to the Kingdom.
  • Moving personal items in or out of Cambodia is simple thanks to a range of relocation services.
  • Tax and duty-free privileges are available for personal shippers.
  • Complete freight services (CFS) are offered by various forwarders that include all parts of the relocation service within a single package deal.
  • These CFS packages can include sea freight service and/or air freight service, inland delivery across borders, plus cargo packaging, crating and loading/unloading services.
  • When utilising these services, it is important to obtain the right documents in advance and to purchase insurance against theft or damage.
  • Pets are part of the family and many want to bring them along on their new adventure.
  • However, permission from the local authority in Cambodia must be attained before the arrival of your pet to any Cambodian airport. Therefore, documentation of clearance is required before your pet is sent to Cambodia. This is available from the Ministry of Agriculture. Exporting a pet from Cambodia to another destination will also require proactive permissions such as this.
  • Freight forwarders work with three types of transport companies in Cambodia: land, sea and air.
  • A freight forwarder doesn’t own their own equipment.
  • Rather, they organise transport of goods with the transport company, whether shipper, trucker, airline or a combination of the three. They also handle port handlers and customs service providers.
  • Many of these firms are members of Cambodia Freight Forwarders Association (CAMFFA), an association whose mission includes bringing local freight forwarding activities towards international standards.
  • Businesses needing to transport goods into or out of Cambodia are well served, as Cambodia has a well-developed logistics and freight forwarding industry.
  • While “International Freight Forwarding” is a clearly understood term in English, it doesn’t translate very well into Khmer, instead becoming “commission agent for transport” which can lead to some misunderstandings.
  • Nevertheless, such businesses have operated in Cambodia since at least 1996.
  • Initially the industry was focused on the garment and footwear industries, and continues to be mainly export-oriented to this day.
  • Today there are over 150 businesses operating in the sector, of which around 40 are members of CAMFFA, an association set up in 2004 whose mission includes bringing local freight forwarding activities towards international standards.
  • Freight forwarders historically dealt with just one of three types of transport companies (land, sea or air) but nowadays tend to work with all three. A freight forwarder doesn’t own his own equipment but instead organises transport of goods in combination with the transport company, whether shipper, trucker, airline or a combination of the three.
  • They will purchase services from these companies, as well as the port handlers and customs service providers, and will combine these into a package and provide a quote to the end user. Cambodia currently has two operational ports, the Phnom Penh Autonomous Port (PPAP) on the Tonle Sap river in the centre of the capital, and Sihanoukville Autonomous Port (SAP), a deep sea port on the south coast.
  • SAP can accept ships up to 20,000 dead weight tonnage (dwt). PPAP, accessible from Vietnam along the Mekong River, can accept ships up to 5,000 dwt in the rainy season and 3000 dwt in the dry season. PPAP is able to handle a maximum of five barges at a time, with drafts of 4.5m in the dry season and 5.5m in the rainy season. Their capacity ranges between 128 to 200 twenty-foot equivalent unit (TEUs).
  • Given the limited capacity of the existing port, a new, larger port of 180 hectares opened in January 2013 at Kien Svay on the outskirts of Phnom Penh. The new port is, of course, much larger but will reach capacity very quickly.
  • The new terminal, which cost more than $28 million, plays a vital role in coping with the increase in cargo received at the country’s ports. In 2016, PPAP recorded a total throughput of 151,781 TEU, a 4.8 percent increase from the previous year, according to an article published in the Phnom Penh Post.
  • Shipping containers come in two main sizes, 20ft (approx. 1,100Ft3 / 30M3) and 40ft (2,200Ft3 / 60M3), although 40ft High Cube (70M3) containers are also available.
  • 45ft containers are less common in South East Asia but may be available where large volumes of shipments to and from the USA are handled.
  • The difference between the old Phnom Penh port and the new Phnom Port in Kien Svay is the size. Kien Svay is much bigger than the old Phnom Penh port and serves in the same way as the old Phnom Penh port shipments via the river to Vietnam, connecting there to the USA and Europe.
  • It’s good for the industry to have competition between Kien Svay and Sihanoukville.
  • Goods shipped internationally (to Europe or the USA for instance) will depart from the port at Sihanoukville in a “feeder vessel” (of which there are three operators) to regional hubs in Malaysia or Singapore, from where they are loaded onto a larger ship, known as the “mother vessel”, and transported to their final destination.
  • The feeder vessels typically take three days to reach Singapore from Sihanoukville, and the ships take around 21 days to reach Europe. It’s worth noting that, given the limited capacity of the feeder vessels, shipments into and out of Cambodia can be delayed during especially busy periods.
  • Shipments from Phnom Penh are typically trucked by road to the port in Sihanoukville (about 230km), though in some cases they can be put on a barge to Caimep in Vietnam from where they are transferred to a container ship and shipped onward to the final destination.
  • Whenever considering shipping out goods and cargo through the Phnom Penh Port remember it will require some forward planning as the city’s port authorities do not operate on the weekend. What this means for you is that any shipments will need to be packed and at the port at the latest by Wednesday, then allowing for any of the required paperwork to be completed and processed on Thursday, and the shipment to be loaded on to the carrier and sent onward down the Mekong River on Friday.
  • Phnom Penh has become a very viable alternative to Sihanoukville port, though of course its capacity is far smaller than its coastal alternative. Whereas Phnom Penh port is geographically closer to businesses operating in the capital, the total transit time may still be quicker going via Sihanoukville due to its longer working week.
  • Shipments to and from neighbouring countries can be made by road, entering and leaving via the borders with Vietnam or Thailand. Trucking across land borders is common and there’s no problem whatsoever to arrange trucking from Thailand or Vietnam to Cambodia.
  • Products made in factories in the Special Economic Zone (SEZ) in Bavet on the Vietnamese border are often trucked across the border to Ho Chi Minh City, where they are transferred to a mother vessel for shipment to their final destination.
  • At the Thai border, goods will need to be “transloaded” from the Cambodian truck to the Thai (or vice-versa). One of the problems is that there’s no standardisation of equipment between the two countries, so trucks will frequently use different trailers with different heights.
  • Businesses requiring chilled transport should note that cold storage containers are typically not readily available in Cambodia. Customers may need to make special arrangements with the shipping line to bring in empty containers, adding to the overall shipping cost.
  • Most goods moved around Cambodia, in large quantities, are transported with lorries, given the limited reach of barges, trains and aircraft. Smaller quantities of goods are moved by small trucks or vans, cars and even motorcycles.
  • Many firms are available to help with local deliveries, and they range in size from family run operations with one or two vehicles to sizeable firms with larger fleets.
  • “Blue trucks” are a popular choice for people moving fairly small quantities around town, such as the contents of a small apartment.
  • Flyers for these services are posted around town, or you can ask your landlord to recommend a particular service.
  • Many of the freight forwarders engaged in international transport also offer domestic transport services, which is a worthwhile consideration especially if you have larger quantities of goods to transport. Many import and export businesses have set up in Cambodia in recent years because of the duty free offered on export from the country to Europe and the US.
  • Most freight forwarders operating in Cambodia will take care of customs duties in the case of large freight shipments.
  • Many Special Economic Zones also have built-in customs stations, meaning checks and duties can be handled before the goods arrive at ports of export.
  • It is important that the company or agent you use is able to walk you through the details, regardless of the size of your shipment.
  • Each type of port has its own procedures that must be followed, though they will require the following: a customs declaration, invoice, packing list, and possibly other forms. It is important these documents are all in good order to avoid any of the difficulties mentioned previously.
  • The process is quite likely to include the following steps: the submission of import documents, registration of manifest and customs declaration, verifying of documents and declaration, calculation and payment of duties, and a random inspection. Fees for ocean freight, air freight and origin charges are dependent on the terms of shipping—this is the same for any destination charges.
  • The enforcement of import and export tax collection has become more stringent in the past year following anti-corruption reforms. This tightening has led to a clampdown on illegal trading at all national entry points. Nevertheless, this should represent no issues for companies who operate legitimately.
  • EDI has also taken over much of the manual inputs with regard to shipping procedures. This has helped improve the process with systems being more sophisticated and now at the same level as other countries across Asia.
  • It is suggested that the growth has come about due to reforms carried out by the Government demanding compliance. The statement attributes the rise in revenues to: “enforcing implementation of the rules, curbing illegal smuggling, and improving the import-export paperwork.”
  • Cambodia’s total imports rose to $12.3 billion in 2016. Meanwhile, total exports stood at $10 billion.
  • In 2016, the GDCE collected $1.74 billion in customs and excise revenue, a 10 percent increase over the previous year, according to statements made by the general director of the customs body.
  • But the opposition party have suggested despite this improvement, there are still widespread issues of corruption: illegal smuggling and custom’s officers taking bribes. The improvement may mark a strengthening economy overall as much as it does strengthened compliance methods.
  • Cambodia has a public postal system run by the government, though the reach of its service is limited to the major cities in each province and destinations located on the roads connecting them.
  • The lack of a consistent street address system and post boxes further limits mail delivery. To counter this many people recommend getting a post office box at Phnom Penh’s main post office, located at the corner of Streets 102 and 13.
  • Be aware that should you receive a package from overseas, you may be liable to pay duties on it if you have to collect it at the airport. Take note also that, even if the items are for personal use, the amount of duty payable is likely to be based not on the intrinsic value of the items, but on what they are and what their perceived use is.
  • Cambodia Post is said not to have the ability to track packages and letters within the country, so once something reaches the Kingdom it is to all extents and purposes invisible until you receive notice from the Post Office of its arrival.
  • Many people opt to combat this problem by visiting the post office and to check at the appropriate counter whether their package has arrived, though this can be time-consuming especially if the shipment is delayed in transit and you have to make several visits before it finally arrives.
  • Alternatively ask the post office to let you have the telephone number of the local delivery agent in your area, though you will more than likely need a Khmer speaker to communicate with them. Packages intended for your personal use may of course be shipped to your place of work if it’s easier for the postman to find.
  • Cambodia Post has begun to work with Express Mail Service (EMS – an international express postal service offered by the Universal Postal Union and part of the United Nations) to provide better services backed by the latest technology. EMS shares locations with Cambodia Post and can be found throughout the country in the provincial capitals as well as at the main post office in Phnom Penh.
  • Nevertheless, many people complain of slow delivery times with packages taking from three weeks to six months to arrive, if they arrive at all.
  • You can send letters and parcels from the main post office in Phnom Penh, using the regular mail service or EMS, though be sure to check that the teller has in fact stamped or franked the envelope before you pay the fee.
  • While the outbound postal service is generally quite reliable, it can be very slow and for urgent or important documents or packages a courier service will a be much more efficient option.
  • There are international courier services operating in the country, with DHL Express Cambodia being the main player in the market.
  • It can be cheaper to use a local courier when sending a parcel overseas, as they will link up with one of the larger operators but offer a better price than if you go direct to the main operator. Bear in mind, however, that many of the major courier services will only handle packages worth less than US$300 due to possibility of graft, so be careful to ensure that you are complying with the relevant legislation.
  • Many courier services also provide value added services such as customs clearance for your parcel, as well as tax exemption formalities and warehousing facilities should your circumstances require them.
  • Most freight forwarders operating in Cambodia will take care of customs duties in the case of large freight shipments.
  • It is important that the company or agent you use is able to walk you through the details, regardless of the size of your shipment.
  • The GDCE does not state how it determines whether imports are for personal or commercial use, and the authorities are often suspicious of any shipments marked as personal effects. This may lead to difficulties when dealing with the authorities.
  • Each type of port has its own procedures that must be followed, though they will require the following: a customs declaration, invoice, packing list, and other forms, if any. It is important these documents are all in good order to avoid any of the difficulties mentioned previously.
  • The process is quite likely to include the following steps: the submission of import documents; registration of manifest and customs declaration; verifying of documents and declaration; calculation and payment of duties; random inspection.
  • A full explanation of the import processes can be found online at the website of the General Department of Customs and Excise.
  • Warehousing services are increasingly being offered by freight forwarding companies.
  • Consolidation Freight Stations (CFS) are also useful for receiving, storing, packing and releasing goods as per requirements.
  • Cambodia has quite a number of small warehouses available.
  • However, standards vary and there is no benchmark in terms of proper warehousing facilities.
  • Don’t expect to see western style garage storage facilities just yet.
  • These standards will continue to improve in light of a steadily increasing demand for domestic storage.
22,111FansLike
240FollowersFollow

SIGN UP FOR WEEKLY UPDATES