Malaysian MSMEs hit by rising cost of logistics
Micro, small and medium enterprises (MSMEs) are facing increasing challenges due to rising logistics costs, according to the Small and Medium Enterprises Association of Malaysia (Samenta).
It said delivery charges have steadily climbed in response to shipping disruptions in the Red Sea and unexpected spikes in demand. MSMEs account for nearly 97% of all business establishments in the country.
Samenta said that, adding to the strain, the Malaysian Communications and Multimedia Commission (MCMC) has proposed regulating courier prices to sustain the industry, a move that has sparked concerns about its possible impact on cost-sensitive businesses.
The changes include pushing for the implementation of a floor price (fixed bottom end price) for parcels, which Pos Malaysia argued would help create a more level playing field within the courier sector.
However, Samenta said “promising growth could be hindered by inefficiencies and rising costs that disproportionately impact SMEs and consumers”. It added that affordable logistics services remain a critical factor in ensuring equitable access to the benefits of market expansion, said the association.
“For SMEs, the logistics costs can significantly influence their competitiveness. Many are now faced with the difficult trade-off of whether to absorb rising delivery expenses and shrink already slim margins, or pass the costs on to customers, risking reduced sales.
“Both options create financial strain, particularly as businesses navigate economic recovery and increasing market competition,” Samenta said in a statement.
To ensure Malaysia’s logistics sector continues to support SMEs and the broader economy, innovation and digital transformation must take centre stage, said Samenta.
“Advances in automation and artificial intelligence (AI) offer opportunities to improve operational efficiency and service reliability, where automated warehousing systems can streamline inventory management, while AI-powered route planning can minimise delivery delays and optimise fuel consumption.
“Tools such as real-time shipment tracking and predictive analytics allow SMEs to anticipate and mitigate potential disruptions while optimising their operations.”
Meanwhile, Samenta national president William Ng said SMEs continue to grapple with rising costs and the pressure to increase selling prices.
“With additional compliance requirements such as the e-invoicing mandate and adherence to environmental, social, and governance standards, businesses are under significant strain.
“To ease this burden, we urged policymakers, regulators, and logistics players to focus on delivering solutions that prioritise efficiency, affordability, and innovation to support the resilience and growth of SMEs,” he said.
The association said relying solely on cost increases to address logistical challenges is no longer viable.
The future of Malaysia’s logistics industry lies in collaboration among industry players, policymakers, and SMEs to foster a logistics ecosystem that promotes innovation and rewards efficiency.
Meanwhile, Generali Malaysia, in collaboration with the United Nations Development Programme (UNDP), has been working to enhance the resilience of small and medium-sized enterprises (SMEs) by providing tailored insurance and risk financing solutions.
In a statement, the insurer said this collaboration focuses on safeguarding SMEs against the growing challenges of climate change and other emerging risks, reflecting Generali’s commitment to addressing global challenges at a local level.
Malaysia’s biggest potential’ is in ASEAN
Malaysia should further tap into the ASEAN market and leverage its strategic advantages, as the regional bloc is well-positioned amidst global uncertainties, Bursa Malaysia chairman Abdul Wahid Omar has said.
And he urged Malaysia to continue to pursue its relationship with ASEAN in a pragmatic and constructive manner to further capitalise on the bloc’s 670-million-strong market.
“The biggest potential that we have is in ASEAN. Our trade and investments (in the bloc) is relatively low compared to other trade partners, and that can be enhanced further,” he said at the recent Institute of Chartered Accountants in England and Wales (ICAEW) Economy Insight Conference 2024.
Wahid also emphasised that Malaysia should not be mutually exclusive to any specific trade groupings, trade talks, or bilateral agreements and should focus on further strengthening trade relationships.
“We can be part of ASEAN, and at the same time, we are part of the Asia-Pacific Economic Cooperation (APEC). We are also a Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) member and can be part of BRICS,” he said.
