Business News

Penang forwarders see cargo fall

Monday, 23 September 2013

“Although we expect the second half 2013 to perform better than the first half by at least 10%, the whole of 2013 will still be about 10% down compared with 2012,” PFFA secretary Ali Ahmad told StarBiz. - Zulazhar Sheblee/The Star(file)

“Although we expect the second half 2013 to perform better than the first half by at least 10%, the whole of 2013 will still be about 10% down compared with 2012,” PFFA secretary Ali Ahmad told StarBiz. - Zulazhar Sheblee/The Star(file)

GEORGE TOWN: The Penang Freight Forwarders Association (PFFA) has revised its earlier forecast of double-digit growth for 2013 to a double-digit drop over 2012 due to a drop in demand for consumer electronics.

The PFFA had earlier projected a 13% increase over the 121,000 tonnes of cargo handled in 2012.

However, data showed that demand for consumer electronics and the semiconductor industries have been slow due to the uncertain recovery in the global economy.

Its secretary Ali Ahmad told StarBiz the revision was made because of the poor performance by the freight forwarding industry in the first half 2013.

“The total tonnage handled for the first half of 2013 was 55,307 tonnes compared with 62,147 tonnes achieved in the previous year corresponding period, a decline of 11%.

“In the second quarter of 2013 the freight forwarding industry handled 27,975 tonnes of cargo, down by 39% from 46,217 tonnes in the previous year corresponding period.

“Although we expect the second half 2013 to perform better than the first half by at least 10%, the whole of 2013 will still be about 10% down compared with 2012,” he said.

Ali said the air freight industry was now getting orders in for the second half, as the electronic manufacturing companies here were starting to ship to their consumer electronic product industries. “The demand usually pick up at this time because schools have reopened overseas which would impact positively on the sales of tablets and laptops.

“Then there is also the coming Christmas holidays which will also raise the sales of consumer electronic products, as consumers worldwide will be buying gifts for their loved ones,” Ali added.

Ali said although the volume handled declined, the value of the air cargo increased by 5% to 10%, as the components exported are of higher value used in upmarket consumer electronic devices.

Some 70% of the exported cargo via air comprises electronic components, while the remainder comes from pharmaceutical and non-perishable products, according to Ali.

On the impact of fuel increase, Ali said the rate of fuel surcharge to US and Europe from Malaysia had increased to RM3.80 per kg from RM3.61 per kg.

“To the other destinations such as Australia, New Zealand, India and its subcontinents, and Korea and Japan, the fuel surcharge rate remained unchanged.

“To Australia and New Zealand, the rates are RM2.37 per kg, to India RM1.80 per kg, and Korea and Japan RM1.20 per kg.

The air freight industry is also expecting the Department of Civil Aviation to introduce the security screening charge soon, according to Ali. “The charge was supposed to be implemented on Sept 1, but it was deferred. Malaysia has to implement the charge as it is a signatory to the International Civil Aviation Organisation agreement.

“We do not know what is the amount of the charge, but it definitely will raise the cost of doing business for industry players,” he added.

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