BATU PAHAT, Dec 21 (Sin Chew Daily) — Prices of goods are affected by the rise in logistics costs, says Novan Hing, the president of Johor Lorry Operations Association and the vice president of Pan-Malaysia Lorry Owners Association.

The sharp increase in lubricating oil and tires has pushed the transportation and logistics costs up, he explained.

“The sea freight costs are still consolidating now. Since the implementation of movement control order first imposed in March last year, demand has declined drastically due to the lockdowns.

“When some economic sectors began to open up, freight charges soared and containers get stuck at major ports around the world.

“We are facing the challenge of controlling costs. This is a service industry but when the business volume does not meet the projected target, in a way our costs have increased,” he said.

Hing also said more expensive spare parts had led to rising costs too.

While demand for logistics to deliver products purchased online is growing, logistics for commercial sector — business to business (B2B) — is still in the midst of recovering, making it difficult to transfer the costs to them, he said.

“For the B2B sector which requires logistics, it is a competitive business. Many sectors have not recovered in full and the demand is low. Those in the logistic sector have to slash their prices to secure orders.

“It’s tug-of-war between the operators and their clients,” he said.

Hing said the increase in costs is inevitable while negotiating with manufacturers to reach a consensus on pricing and supply would help ensure the stability in business.