POINTERS 2014 MPOC
Palm Oil Internet Seminar
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Section 1: Price Direction:
Logistic Challenges During COVID-19 and Its Impact on Palm Oil Trade
By: Ms. Yasothai Munairu

About 24 years of experience in Logistics and Customer Service in Shipping & Forwarding, Manufacturing, Relocation and Recruitment, with working experience in Malaysia, Singapore and remote management in North East Asia Oceania Logistics Regions.

Currently, she is the Head of Logistics, Sime Darby Oils based in Malaysia.


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This pandemic has caused a tremendous impact to the entire logistics sector, where Malaysia is not spared either, with restricted movement throughout the year

Sea Freight
Permits to resume the work
Port storage charges (containers stuck)
Voyage cancellations
Entire Asia – Europe / USA route cancellations

Trucking
Severe delays & backlogs (limited trucking, permits, quarantine for drivers)
Rate increases especially across provinces

Air Freight
Flights cancelled
Capacity drop of approx. 65% vs 2019
Limited staff on duty (40-50%)

Warehouse
Growth in storage demand as manufacturing companies are expected to have more stock due to reduction in demand


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Questions & Answers (4) :
Azwan Fitri Bin Zainal Abidin
8 months ago
Hi Ms Yasothai; Do you foreseen any big logistic issue/impact post Suez Canal Blocking by Ever Given for the ports and global supply chain movement in overall? Thanks,
POINTERS SECRETARIAT:
Posted on behalf of Ms Yasothai Munairu : The recent Suez Canal issues have exacerbated the current difficulties and will be having a negative impact on freight movement. The impact is expected to last for the next two months, and we are already seeing an increase in demand on the Europe-Asia-Europe trade lane, as well as to the Indian subcontinent. Seeing an upward movement on rates out of Asia with demand and rates are likely to increase sharply in April 2021.
8 months ago
VS LEE
8 months ago
Hi Ms. Munairu, Thank you for the overview of the logistic problems caused by covid-19 and containment measures put in placed. It makes sense containment measures to stay until pandemic is over. Are you seeing or foresee any logistic improvements especially in areas/countries where inoculation progress is high? Thanks
Yasothai Munairu:
Hi VS Lee, Thank you for the comment. Question : Are you seeing or foresee any logistic improvements especially in areas/countries where inoculation progress is high? Answer : In my opinion countries with high inoculation progress should foresee logistics improvements in terms of workforce availabilities for example :- • Ports/Airport : An increase in the number of ground-support staff on the job at any given time while still adhering to the SOPs for social distancing • Land Transportation : Local distribution will improve as more drivers become available and trucks can be deployed, but cross-border land transportation will remain difficult due to each country's driver SOPs. • Customs & Government agencies – with automation and more customs officers/govt agents personnel capacity However, with an increase of shipments and clearing of backlogs exercise, improvements of delivery lead times will not see a drastic improvement even with the high inoculation rate. Thank you.
8 months ago
MEGAT SYAZWAN SHAH
8 months ago
Dear Ms Munairu, Could you share what is the loss experience by palm oil industries due to recent Suez issues in addition to the pandemic? Thank you!
JENNY FOO
8 months ago
Thank you for piecing together the scenario of the logistics problem caused by COVID and the lock down. I was affected too with raw material supply for my use from overseas. Three questions:- 1) How majorly did the logistics problem caused the run up of CPO price? 2) Which factor was more major to cause the hike in palm oil price? Was it not enough stock (because not enough harvesters) or there was still enough stock to sell but logistics standstill? 3) When (year) do you think logistics will be back to normal again? A guess from an expert such as you will be useful. Thanks.
Yasothai Munairu:
Dear Jenny Foo, Thank you for questions. 1) How majorly did the logistics problem caused the run up of CPO price? Answer : Though the logistics problem did have an impact in the cpo prices at the beginning of the mco period, the run up of CPO price currently is largely due to the shortage in both palm and global vegetable oil production leading to extremely low vegetable oil stock availability. 2) Which factor was more major to cause the hike in palm oil price? Was it not enough stock (because not enough harvesters) or there was still enough stock to sell but logistics standstill? Answer : As per question 1, the major cause for the hike in palm oil price is due to extremely low stock from lower production in vegetable oils, especially in production and availability of sunflower, soy and palm. 3) When (year) do you think logistics will be back to normal again? A guess from an expert such as you will be useful. Answer : Continuous demand for ocean freight from Asia to the United States continues to overwhelm major US ports, stranding ships outside many major West Coast ports and pushing up air cargo prices as importers seek alternatives. And, just as things were looking up from Asia to the Mediterranean and Europe, an Evergreen container ship ran aground in the Suez Canal, causing traffic to be diverted in both directions. In your context, I believe “normal” refers to freight rate stability, space availability, and routing dependability. As of now none can predict when the situation will normalize but what we can do is manage our supply chain movement creatively and optimized resources we have. Thank you.
8 months ago
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