ASEAN economies were further held back by systemic inefficiencies such as complex tax regime, e-commerce regulations and customs protocols. For example, customs documentary requirements are vastly different across ASEAN, resulting in customs delays that create traffic bottlenecks and increase shipping costs. These differences are largely due to a disparity in digitalisation between the member states. Although all 10 members have access to a common trade platform known as the ASEAN Single Window (ASW), only about half are currently using it.

ASEAN member states have also joined forces with their pacific neighbors – Australia, China, New Zealand, and South Korea –to sign the Regional Comprehensive Economic Partnership (RCEP). However, it is uncertain if RCEP will fare much better – the lack of penalties and binding requirements means that nations can beg off the agreement’s standards if they deem them contrary to the country’s public policy objectives. Future proofing ASEAN’s 2030 digital supply chain needs to start NOW.

The 2030 ASEAN digital supply chain – where do we start?

With Covid slowly releasing its clutch on the region and trade agreements offering imperfect assurance of future success, where does that leave ASEAN’s hopes for a better, more efficient, and more synchronized trade and supply chain network?

Kearney is advocating for ASEAN to embrace and leverage digitalisation to fundamentally transform end to end supply chains in ASEAN. Such a digital supply chain should at minimum have four key qualities as seen in the figure below. However, in reality, the current supply chains in ASEAN lack some of the necessary qualities. Instead, in ASEAN, we have difficult-to-navigate logistics-supply markets, manual collection of inventory data and low-to-no tracking of ocean vessels.

There is a better way – imagine this:

But how do we get these from where we are today? There are 4 main themes of actions to path the way: Institutional reform, infrastructural upgrade, technological advancement and adoption, and human capital growth.

Institutional Reform – At a regional level, a good starting point would be for holdout nations to adopt the ASW. Additionally, ASW can be integrated with the ASEAN Smart Logistics Network (ASLN) and non-member nations can be included in the ASW. On a national level, governments can redirect some resources allocated to support businesses during COVID, to digitalize trade services. Nations can also continue COVID-related debottlenecking efforts – such as streamlining custom processes for ‘low-risk’ traders – and even expand it into non-emergency product categories. These efforts in tandem with digitalisation measures that are already planned or under way, like the parts of the ASEAN Comprehensive Recovery Framework (ACRF), can go long way toward shifting ASEAN into a higher logistical gear.

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