One region, two realities: How Southeast Asia moves on a split supply chain

While Southeast Asia is growing as a trade powerhouse, it remains divided by geography, income, and infrastructure readiness. Singapore continues to lead regional rankings in the World Bank’s Logistics Performance Index (LPI) excelling in customs efficiency, logistics service quality, and digitalization. Indonesia, Vietnam, and Thailand are catching up, but gaps remain pronounced.Reports from the Asian Development Bank (ADB) and Standard Chartered estimate an infrastructure investment gap of US$2.8–3.1 trillion from 2016–2030, translating to a US$200 billion annual shortfall. Governments can only finance around 40% of this amount, leaving public-private partnerships (PPPs) and regional initiatives like the ASEAN Infrastructure Fund to shoulder the rest.

Indonesia’s US$327 billion infrastructure plan and the Philippines’ US$180 billion program underline national ambition, yet connectivity between markets still lags. Critical highway and railway links remain incomplete, while ports in developing ASEAN states face bottlenecks that limit throughput.

Few examples illustrate this divide better than the ports of Singapore and Manila.The divide between Singapore and Manila’s port congestion in 2025 is substantiated by clear statistics and real-world events. Singapore’s delays were driven by global supply chain shocks, notably the rerouting of vessels due to instability in the Red Sea and Suez Canal, leading to spikes in transshipment volumes. Toward mid-2025, vessel waiting times in Singapore averaged between 1.5 to 2 days, but peaked at up to 7 days, with over 450,000 TEUs queued and yard utilization rates around 85%. These delays were compounded by operational disruptions, with nearly all major global container ports reporting up to 300% above normal levels for berthing delays in June 2025.​In Manila, congestion causes were primarily domestic: constrained port space, inefficient inland transportation, and periodic surges from seasonal trade. For dry bulk cargo, average port stays fluctuated from 5.7 to around 7.2 days in March-April 2025—with spikes up to 10 days during seasonal peaks, but container vessel waits were generally shorter at 2–3 days for most shipments. Overall port traffic included 2,042,135 TEU in 2025, reflecting steady but less extreme strain than Singapore’s international flows.​A key difference lies in the global versus local implications: Singapore’s congestion sent shockwaves through global supply chains, while Manila’s delays primarily affected Philippine importers/exporters and local commerce. The 2025 Red Sea rerouting event especially intensified pressure on Singapore’s hub status, forcing vessel operators to adjust global schedules while Manila’s issues remained rooted in longstanding infrastructure and organizational challenges.​Singapore’s port congestion, with yard density sometimes reaching 95%, has direct and severe ripple effects on regional and global supply chains, including feeder routes to Australia and across Asia. During periods when Singapore operated at this capacity, up to 450,000 TEU waited for berths and vessels saw delays as long as 7 days, according to live port data and shipping industry reports. These delays forced major lines to skip Singapore or adjust transshipment schedules, resulting in bottlenecks at Port Klang, Shanghai, Qingdao, and particularly impacting feeder routes to Australia and Southeast Asia. Disrupted transshipment at Singapore affected the reliability and schedule integrity of shipments beyond Southeast Asia, with Australian supply chain managers specifically reporting container shortages, increased freight rates, and cascading scheduling delays for both imports and exports.​

Kawa’s statement, from the Economics and Research Institute for ASEAN and East Asia report on E-commerce connectivity in ASEAN, directly addresses the uneven infrastructure and performance across Southeast Asia. This parallels the sentiment of a twin-speed logistics ecosystem and offers a clear attribution. The ASEAN Master Plan on Connectivity (MPAC) 2025 was designed precisely to address these gaps. Its five pillars: sustainable infrastructure, digital innovation, seamless logistics, regulatory excellence, and people mobility aim to make ASEAN a truly connected community.However, progress in Southeast Asia’s logistics sector is highly uneven due to physical, digital, and regulatory bottlenecks, with wide variation between countries like Singapore, Vietnam, Indonesia, Malaysia, and Thailand.

Vietnam’s Cat Lai Port frequently experiences congestion caused not just by limited berths, but also by inefficient trucking routes and slow cargo clearance that depend heavily on manual paperwork. Inland road and rail infrastructure struggles to keep pace with manufacturing growth, resulting in significant delays.​In contrast, Malaysia’s Penang and Port Klang have modernized more rapidly, adopting greater automation and even operating customs 24/7 to reduce container dwell times and smooth operations.​Indonesia, as an archipelagic nation, faces extreme logistical challenges in connecting more than 17,000 islands. Fragmented transport links and port capacities in places like Sumatra and Sulawesi hinder timely, seamless deliveries to or from Jakarta, compared to the relatively concentrated infrastructure in Singapore.​Thailand has invested heavily in the Eastern Economic Corridor to overcome such bottlenecks, building specialized logistics parks and modern inland links, but remote provinces lag behind.

ASEAN’s logistics sector stands at an inflection point.The numbers tell a clear story: a US$719 billion logistics economy by 2030, surging port volumes, and massive infrastructure investment. But progress across ASEAN remains uneven, with advanced hubs like Singapore outpacing emerging markets still constrained by physical and regulatory hurdles. Bridging this gap will depend on sustained collaboration across governments, data systems, and the people who keep supply chains running.