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The
cost of logistics for land transport and
warehousing is expected to remain stable
throughout the year, according to industry
players.
This is because Malaysia’s logistics cost for
the two segments is already among the lowest in
the region and, therefore, not severely impacted
by the drop in import and export volumes.
Logistics players are more concerned about the
slower turnaround time of goods in their
warehouses and distribution centres due to
sluggish demand.
Freight Management Holdings Bhd (FMH) managing
director Chew Chong Keat told StarBiz that fees
in the local logistics scene would remain stable
in the second half of the year.
However, he said, the company would continue to
monitor fuel price movements, which is one of
the three major factors that influence the cost
of logistics.
“The other two major factors are financing or
borrowing rates, which have seen no huge
increase in Malaysia, and manpower, which is
sufficient currently compared with last year.
“Some local logistics providers are only seen to
provide discounts of 10% to 15%, depending on
the package and volume of goods,” he said.
Chew noted that the turnaround time of goods in
warehouses had been slower compared with the
pre-global crisis period.
Going forward, he sees a slight improvement in
the volume of goods compared with the 10% to 15%
drop in the first quarter of this year.
On its results for the third-quarter ended March
31, which saw a 14.3% drop in net profit to
RM2.8mil year-on-year, Chew said extraordinary
gains of RM1.1mil from the disposal of a barge
in the previous corresponding quarter
contributed to the decline. “At the operating
level, we are still better than 2008 for that
particular quarter,” he said.
On the performance for the full-year ending June
30, Chew said FMH expected to remain profitable
although the growth momentum might not be as
bullish as last year.
Similarly, Century Logistics Holdings Bhd deputy
managing director Mohamed Amin Kassim saw little
change in logistics cost in the country amid the
weak economy.
“Our rates are already among the lowest in Asia
and a further decrease will only hurt local
players.
“However, container haulage rates may have
dropped from last year, with the current rates
generally lower than the guidelines provided by
the haulage association,” he said.
Air and sea freight had also recorded a slight
drop in rates, he added.
Amin said the more pressing issue was the slower
turnaround time of goods in warehouses, which
had affected income.
“Usually, the turnaround time is 10 days to two
weeks but now, some goods have been sitting in
our warehouse for a month.
“Due to the slower turnaround, logistics players
lose out on cargo-handling fee,” Amin said,
adding that some brands of fast-moving consumer
goods were still recording healthy turnaround
time.
On Century Logistics’ weaker results for the
first-quarter ended March 31, he said they were
due to the high base effect from special
logistics projects done a year ago, coupled with
the drop in volumes early this year.
The company saw its net profit shrinking to
RM1mil in the first quarter from RM9.8mil in the
previous corresponding period.
“But in the second quarter of this year, we have
seen an uptrend in volume for certain logistics
activities due to our diversified services and
value-added products. I hope this positive
development is sustainable,” he said.
Source: The STAR MARITIME
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