External forces are reshaping the conversation around warehouse selection in Southeast Asia: the regulatory environment in each destination market, the growing case for automation as labor costs climb, and the shift toward project-based and flexible warehousing models.
Together, these factors affect service reliability, pricing, and scalability for companies that source, distribute, or manufacture across the region
Warehouse Location as a Compliance Decision
Across Asia, warehouse selection is increasingly a regulatory decision as much as a logistics one.
Some markets still allow low-value parcels to cross borders with limited tax exposure, while others now tax all imported B2C parcels, so the right warehouse location can materially affect landed cost and compliance risk. For regulated health products, import and re-export rules may also determine whether a regional hub such as Singapore or a Taiwan FTZ is more workable than establishing a local entity in Thailand.
- Thailand is removing the low-value import duty exemption, which means even small cross-border B2C parcels can now face duties.
- Singapore’s HSA requires specific licensing for many health-product import/wholesale activities, including re-export distinctions that matter for network design.
Under the new Thailand Customs Department policy, all imported goods, regardless of value, are subject to import duties upon entry into the country. This new policy alters the landed-cost calculation for any business shipping small B2C parcels directly into the Thai market. Major e-commerce platforms are now required to integrate tax collection, adding import duties and a 7% VAT to the customer’s bill at checkout.
This means that a fulfillment model designed around duty-free small-parcel entry into Thailand now carries new cost, classification, and compliance burdens that must be factored into hub selection.
In Singapore, the Health Sciences Authority (HSA) operates an activity-based licensing framework that creates meaningful distinctions based on what a facility actually does with the goods. An importer’s license and a wholesaler’s license are required to import and wholesale therapeutic products, respectively, in Singapore, and companies must comply with Good Distribution Practice standards before either license is granted.
However, the re-export pathway has a different structure: companies that import Chinese Proprietary Medicines into Singapore solely to export or re-export to another country do not need to apply for an import license for CPM; instead, they need to apply for an import-for-re-export permit.
This distinction affects customers designing B2C health product solutions for regional markets. A customer exploring a Singapore hub to fulfill health products in Thailand, for example, faces a different compliance profile depending on whether Singapore is the point of local distribution or a re-export consolidation point. The re-export pathway may avoid the full local import licensing burden, but it requires the warehouse operator to manage the correct permit structure and documentation.
For one recent Dimerco inquiry, this question was central: a customer evaluating B2C health-product distribution into Thailand was weighing a Singapore fulfillment hub against a Taiwan FTZ model, specifically to avoid establishing a local Thai entity and obtaining Thai FDA licensing. The answer isn’t the same for every product classification or commercial structure, but the point is that the warehouse location decision and the regulatory strategy are now inseparable.
Choosing the wrong hub can create licensing obligations, unexpected landed costs, or customs compliance risks that undermine the entire fulfillment model.
Automation vs. Manpower: A Maturing Trade-Off
Across markets including China, Singapore, Taiwan, and, increasingly, parts of Southeast Asia, wages have risen steadily, and the pool of workers willing to take on physically demanding warehouse roles has shrunk. Turnover adds recruitment, onboarding, and training costs in addition to base wages, making labor even harder to absorb.
At the same time, the capital required for automation — conveyor systems, sortation technology, goods-to-person robotics, and WMS integration to support them — has been difficult to justify on ROI grounds.
Rising labor costs are changing the equation for automation. While automation requires significant capital, it is increasingly seen as a way to reduce labor dependency, improve accuracy, and create a more predictable operating model as wages and labor shortages increase.
For warehouse customers, this matters beyond the technology question itself. Warehouses that remain fully manual may face increasing pricing pressure as operators pass through wage inflation. Storage rates, handling fees, and fulfillment charges tend to rise as labor costs increase because labor is typically the facility’s highest operating cost.
Automation can reduce labor dependency through mobile scanning, label-printing devices, warehouse management systems that reduce manual checking and data entry, and robotic process automation for administrative workflows, before a facility ever installs a conveyor or an AGV.
Dimerco has built this logic into its warehousing approach. Across its network spanning China, Taiwan, Singapore, India, and Southeast Asia, Dimerco uses advanced WMS platforms, mobile scanning, and robotic process automation to improve accuracy and efficiency at scale — not as a replacement for operational expertise, but as a way to protect service levels and reduce the dependency on staffing.
The Rise of Project-Based Warehousing: Beyond Standard Distribution
The most interesting structural shift in Asia’s warehousing right now is not about technology at all, but about the changing nature of how warehouses are used.
The traditional model is straightforward: a company manufactures or imports goods, stores them, and distributes them domestically or regionally through a more or less stable network.
That model still exists. But companies restructuring their supply chains under “China Plus One” or similar strategies need more. They’re looking for flexible consolidation, re-export capability, and multi-market distribution across short, project-driven supply chains.
Taiwan’s FTZ framework is especially useful here because it supports storage, transshipment, packaging, assembly, and export-oriented logistics with customs advantages that fit short supply chain and project shipment needs.
For foreign buyers sourcing in Taiwan, a project warehouse can consolidate products from multiple suppliers, relabel or repack as needed, and distribute them directly to customers across markets such as Korea and Malaysia. This is valuable when procurement needs to remain flexible, lead times are short, and the customer wants to avoid locking inventory into a single country’s distribution structure. In practice, the warehouse serves as a coordination point for documentation, consolidation, and dispatch rather than merely a storage site.
That makes Taiwan a practical hub for blind shipments or indirect distribution models where the warehouse coordinates order assembly and ships to end customers in other Asian markets without operating like a traditional local distributor.
Dimerco’s Taiwan warehousing capabilities are well positioned to support the transition to new models. With bonded and FTZ facilities that support consolidation, transshipment, and multi-destination routing, Dimerco can manage the documentation, customs compliance, and outbound coordination required for project-based shipments. Coupled with strong air and ocean freight capabilities across the Asia-Pacific network, we provide a coordinated solution for customers who need more than a storage room — they need a regional logistics hub capable of executing complex, flexible distribution requirements.
For companies encountering these trends, work with a logistics partner positioned to serve complex, multi-market supply chains in Asia with the ability to advise on the regulatory implications of hub selection across different product categories and destination markets, actively manage labor dependency, and offer warehousing capabilities that support flexible models.
With 150+ offices across Asia, strong relationships with regional carriers, and in-market customs expertise, Dimerco has spent decades building exactly this kind of network — connecting Asia’s logistics and manufacturing hubs to customers in North America and Europe. As the region’s warehouse landscape continues to evolve, that combination of local expertise, integrated services, and technology-enabled operations is what distinguishes a logistics partnership that holds up under pressure from one that doesn’t.
If you’re evaluating your Asia warehouse strategy — whether for cost, service level, automation readiness, supply chain flexibility, or cross-border fulfillment compliance — contact Dimerco’s logistics specialists to discuss what the right solution looks like for your network.
