PLF CEO FORUM 2022 Concurrent Session D:
“IN TRANSIT: STRENGTHENING MALAYSIA’S RESILIENCE AND COMPETITIVENESS AS A GLOBAL LOGISTICS HUB”
- Dato’ Azman Shah Mohd Yusof, Chief Executive Officer, Northport (Malaysia) Bhd
- Dato’ Paduka Hamie Appala Nakkiah, Group Managing Director, Biforst Berhad
- Mr Mark Jason Thomas, Chief Executive Officer, MAB Kargo Sdn Bhd
MODERATOR: Mr Fazil Irwan Som, Chief Executive Officer, Penang Halal International
The logistics sector, including seaports, had their best years during the Covid-19 global pandemic, in contrast with most other economic sectors. The discussion in this session centred on the logistic sector’s sustainability during the pandemic as well as current and future challenges.
In his opening remarks, moderator Mr Fazil Irwan Som of Penang Halal International mentioned that as Malaysia is the 24th largest trading nation in the world, logistics and ports are crucial to the Malaysian economy. Dato’ Azman Shah Mohd Yusof of Northport (Malaysia) Bhd stressed that ports were part of the nation’s “frontliners” during the pandemic with staff having to work during lockdowns to ensure smooth arrival, processing, and delivery of goods. It was a unique situation that nevertheless led to the world behaving differently, post-pandemic. The sector would welcome new policies that take the new norms into account without hurting the sector’s economic value. New norms bring new opportunities but they need to be done right.
In contrast to the seaports, air cargo was restricted. According to Mr Mark Jason Thomas of MAB Kargo Sdn Bhd, the drop in demand was one of the biggest challenges they faced. Planes were grounded due to Covid-19 restrictions and the closure of international borders. Sustainability of the business became a real issue but MAB Kargo managed to pull through because of the immense support they received from the key players in the industry.
Datuk Paduka Hamie Appala Nakkiah of Biforst Holding Sdn Bhd touched on the issue of low productivity, which he said was partly caused by “leakages of connectivity” between value chains. Seaports, air cargo and land logistics are critical elements of value chains but when exchanges of information are lacking, connections break down. These breakdowns can lead to major productivity and efficiency setbacks. Malaysia needs to address this issue to remain competitive, especially against our ASEAN neighbours, as well as incorporate more technology into the logistics eco-system to raise productivity.
The panelists also discussed policies with all calling for policymakers to look into encouraging digitalisation for higher productivity.
“In terms of efficiency, a study done by a Canadian investment bank last year of 22 major ports in the world during the pandemic found that Port Klang was the most efficient during the pandemic. This is only possible because we stood firm, remained open, and acted as a value chain as opposed to acting in silos.”
Dato’ Azman Shah Mohd Yusof
“Digitalisation is the cornerstone of success for any organisation. There are two ways of looking at it. One is internal digitalisation adoption, where our co-workers can embark on utilising the digital space to increase productivity and make jobs more efficient. Secondly, and more important, is embarking on digitalisation for the front-end to ensure the best customer experience.”
Mr Mark Jason Thomas
“We don’t have a body that looks into the entire bandwidth of supply chains for streamlining costs and operations. Until that happens and policies follow suit we will not solve the logistics challenges of this country. The logistics sector is currently under a “Divide and Rule” approach which ultimately may not be the best for our customers.”
Datuk Paduka Hamie Appala Nakkiah
“We’ve been focusing a lot on cost reduction. But one of the obvious ways to upgrade the industry is digitalization. However, a recent study says that most of the companies that embark on digitalization are large companies. The SMEs are still focused on cost reduction because digitalisation is a high-cost affair to them.” Mr Fazil Irwan Som