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The surge in operational
costs, fuelled by the recent hike in diesel
price, may see some smaller logistics players
like SNH Global Maritime Sdn Bhd diversifying
into other segments of the transportation and
shipping sector.
SNH managing director Shahrin Shamsudin said the
company, which was mainly involved in ship
chartering and offshore supply vessels (OSV)
brokering, was already feeling the pressure of
rising operational costs.
“The cost of delivery of a vessel has gone up
and we see this as a big impact on our
business,” he said. “There is nothing much we
can do,” Shahrin said, adding the company would
have to diversify into other businesses to
remain competitive.
Sharing his predicament are the smaller
transportation players whose margins are already
squeezed by the high operational costs.
Transways Logistics (M) Sdn Bhd president and
chief executive officer Edward Chan said rising
operational costs was a big concern for all
parties. “The fuel hike has created a big impact
on the industry. Logistic players will be
affected by the higher cost. This would reflect
most on the transportation sector,” he said.
Transways Logistics provides front-end to
back-end freight management total logistics and
for the remaining year Chan is bracing for a
chain reaction on prices.
“Everyone will be raising prices and the
end-user would need to pay more,” he said.
The Government had on June 5, increased petrol
prices by 41% and diesel by 63 sen as it sought
to reduce subsidies and channel the much-needed
funds to other segments of the economy.
APM Global Logistics Sdn Bhd general manager
Paul Lui said the company would need to pass on
its cost to its customers due to the higher
operational costs.
“We are more of a 'middleman' and we outsource
our trucks and warehousing services. When they
increase the costs we just pass it on to our
customers,” he said.
However, the bigger players have already
implemented counter measures to minimise costs
and maximise productivity.
For example, haulage and transport firm
Konsortium Logistik Bhd expects the higher fuel
prices to have an impact and this has been
reflected in the more conservative revenue
growth of 20% instead of the 30% forecast in
March.
Executive vice-president Loo Hooi Keat said
Konsortium Logistik was investing in newer and
more powerful and fuel-efficient trucks.
The company has about 500 trucks and the older
trucks would be phased out as “we feel we can
work best with just 350 trucks.”
“This will bring down our cost a lot and improve
our haulage capacity by 30% to 40%,” he said,
adding that KLB would be purchasing 200 trucks
this year at a cost of RM60mil with an option to
purchase 200 next year.
As for Freight Management Holdings Bhd, its
managing director Chew Kong Keat said the impact
of oil price increase on the company would be
minimal.
“Local transportation comprises a small portion
of our business and we are also entitled to fuel
subsidies from the Government,” he said.
Century Logistics Holdings Bhd is expected to
see slower revenue growth from the transport and
freight division due to higher operational cost.
An analyst with a local research house said
contributions from Century's oil and logistics
division should cushion any impact from the high
fuel prices.
The record high oil price is seen as a blessing
for companies which provide vessels for the oil
and gas exploration industry.
Alam Maritim Resources Bhd managing director and
chief executive officer Azmi Ahmad said the rise
in the price of crude would fast track
exploration and oil extraction projects, which
in turn would require offshore support vessels (OSVs).
The company owns and operates one of the largest
fleets of OSVs in terms of tonnage in Malaysia. |
