ASEAN's Logistics Ceiling Threatens China Plus One Strategy

The "China Plus One" diversification strategy—where companies establish alternative manufacturing bases outside China—has accelerated demand for logistics capacity across ASEAN. However, RSIS research reveals that ASEAN's freight infrastructure is reaching critical capacity constraints that could undermine the effectiveness of this geopolitical hedge. Port terminals, inland transport networks, and multimodal connectivity across the region are not scaling at the pace required to handle relocated production volumes, creating a structural ceiling on how much manufacturing capacity the region can actually absorb.

This infrastructure mismatch represents a systemic risk for supply chain professionals pursuing ASEAN diversification. Companies that assume proportional logistics capacity will follow production relocation face significant operational headwinds: congestion-driven delays, premium freight rates, and service-level deterioration. The bottleneck is not temporary—it reflects years of underinvestment in regional logistics infrastructure relative to manufacturing growth ambitions.

For operations teams, this finding demands urgent reassessment of ASEAN sourcing strategies and contingency planning around transportation reliability. Organizations must differentiate between the availability of manufacturing capacity and the availability of logistics capacity to move goods to market. Without simultaneous infrastructure investment by ASEAN governments and private operators, the region's ability to absorb displaced manufacturing from China faces a hard ceiling that could force companies back to China or into other regional alternatives.