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Logistics firms are experiencing an increase in
raw material stockpile in their warehouses as
manufacturers have slowed production due to
falling demand.
The country’s trade is expected to be hurt even
more this year due to its large exposure to the
United States, especially for electronics and
electrical products.
Also, falling commodity prices have affected
Malaysia’s export and import of
commodity-related materials such as fertilisers.
Transways Logistics (M) Sdn Bhd president and
chief executive officer Edward Chan told StarBiz
that the stockpile of raw materials occupied
more than 50% or 30,000 sq ft of its warehouse
space.
“The raw materials include plywood and fibre
boards for the furniture industry that is
currently facing falling demand. If this
situation persists, we will look into the
possibility of acquiring new warehouses,” he
said.
He said Transways usually handled the
distribution and inventory of the raw materials
for its customers in Malaysia, Vietnam and
China.
Chan said there was no indication how long it
would take for the stockpile of raw materials to
clear up as it very much depended on trade.
Infinity Logistics and Transport Sdn Bhd
managing director Chan Kong Yew said the
company’s warehouses experienced a sudden change
in pattern, with slower turnaround for some of
the stored materials.
“For imports, we are currently stockpiling or
storing a lot of fertilisers. I think the
plantation industry, especially oil palm, needs
less fertilisers as the palm oil price continues
to fall,” he said.
And for exports, he said, there were a lot of
electronics product materials being stored at
the company’s warehouses. Asked if the long
storage of materials meant extra business, Chan
explained that the warehouse business made more
profit on moving goods rather than “dead” cargo.
“The faster the goods move in and out of
warehouses, the more we earn,’’ he said. “But
the current situation of increasing stockpile in
warehouses in a sense would balance out the
supply and demand for warehouses in Port Klang,
which are currently facing an oversupply.”
Freight Management Holdings Bhd managing
director Chew Chong Keat told StarBiz that the
company was not experiencing any “long” storing
of products that could be deemed as stockpiling.
“The inventory is a little bit more but
electronics products and raw materials are still
moving,’’ he said. “Maybe it’s due to how we
have structured our service.”
Monday January 5, 2009
The Star - MARITIME |
