Honda Malaysia has switched to rail-based transport for delivery of parts between Thailand and Malaysia, via Thailand National Railways (SRT) and Keretapi Tanah Melayu (KTM). With this move, HM becomes the first Honda outpost to switch to rail-based delivery for optimal logistics.

Honda Malaysia’s production volume is anticipated to increase from the current 50,000 units to 100,000 units annually by 2016. Currently, 25 to 30 containers are being transported from Thailand to Malaysia on a daily basis. And this is expected to increase to 120 containers per day in line with HM’s future production plans.

This initiative is also in line with Honda’s global environmental target of 30% reduction in CO2 emissions by Honda products by 2020. Just by changing the mode of transportation from trucks/ships to trains, CO2 emissions have been reduced by 60%. Honda says that rail is also more cost effective (logistics cost to be halved within two years), with lower logistic risks, wastage and damages. KTM uses a GPS tracking system.

Delivery time will be shortened, too. It takes 2.5 days for goods to be delivered from Thailand to Malaysia via rail, half a day faster than using trucks. Shipping takes seven days. This helps increase efficiency and shorten the waiting period for customers, and Honda gets to reduce stock in hand by six days.