Freight issues remains a recurring dilemma as Malaysia reels from indefinite extension of full lockdown

KUALA LUMPUR (1 July 2021) – The tight supply of containers and high freight costs continue to negatively impact the industry as Tan Sri Dato’ Mahiaddin Yasin, Prime Minister of Malaysia extends the lockdown indefinitely until daily infections fall below 4,000 cases.

According to an industry trader, businesses continue to see a negative impact and a slowdown in movement has affected the way business gets done in the country for industries like petrochemicals and oleochemicals.

“Still, the freight-related issue is the biggest problem due to a tight supply of containers and high freight costs. However, demand is still good for end-products,” the trader said. “Due to a lack of vessel space, buyers cannot buy as there is no assurance of products reaching customers on time.”

The Federation of Malaysian Manufacturers (FMM), an organization that represents more than 10,000 member companies from the manufacturing supply chain, warned that the extended Movement Control Order (MCO) could result in closures of micro, small and medium enterprises (SME) which are desperately cash strapped and unable to sustain operations and employment with no business activities allowed.

FMM suggests that instead of a nationwide lockdown, restrictions should be placed on specific states or areas where the infections are highest.

“To minimize the impact on both the industry and economy, states or areas where the cases are lower and under control should be allowed to operate without any distinction between essential and non-essential sectors,” FMM said.

As of 29 June, Malaysia recorded 745,703 cases of Covid-19 infections and 5,108 deaths. Currently, more than 4 million vaccines have been administered.

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