Global LEAD Consultancy (Logistics Excellence Academics & Development): Air Logistics : MAS ADVANCE CARGO CENTRE'S SHORTFALL IS EQUIVALENT TO COUNTRY'S ECONOMIC DOWNFALL

Malaysian largest International airport, Kuala Lumpur International Airport (KLIA) and the national flag carrier in the air, Malaysian Airlines System (MAS) has to endure another dilemma that will lead to the country’s economic capabilities to be questioned. This quandary is particularized to the delays at the Advanced Cargo Centre (ACC) which is operated by Malaysian Airlines Cargo Sdn Bhd (MASkargo), the cargo division of MAS. The delays ensued due to the employees of the MASkargo’s vendors, mostly foreign labourers, staging a walk out from the ACC for not being paid their salaries. As a result, the entire import and export operations halted for at least 3 times this year causing delays, loss of businesses as well as revenue deficit to various manufacturing or consumers and other closely related service industries.

To recover from the recurring situation, MASkargo took a swift decision to terminate the problematic vendors. Subsequently, they appointed JR Joint Resources Holdings Sdn Bhd and MASkargo Logistics Sdn Bhd as the new vendors through a stringent procurement and tender process. However, the initiative turns out to be disastrous when the newly appointed vendors positioned insufficient in addition to inexperience employees to carry out the operations functions. Consequently, the inbound and outbound shipments at the ACC begin to pile up further triggering more chain problems such as shipments being misplaced, being damaged or even missing shipments. Nonetheless, the losses are yet to be calculated.

With such situation persisting till today, the end users or customers are blaming the entire industry for the shortfall. The airfreight forwarders are being held responsible by customers for the impediment at the ACC. They are stranded to handle the delays at the ACC and the same time, manage customers’ expectations. The Airfreight Forwarders Association of Malaysia (AFAM) initiated various efforts to communicate the issues faced by its members, seeking for explanation and compensation. In the latest circular, the AFAM’s Chairman, Walter Culas encouraged the freight forwarders to use airlines services that engage the services of Kuala Lumpur Airport Services instead of MAS Advance Cargo Centre. This measure will give allowance to MAS Advance Cargo Centre to reduce the backlog of shipments & improvise the process.

Should the problems are not encountered in a short period of time, it may affect the revenue of MASkargo and eventually turn out to be auxiliary contribution to MAS’s current financial sufferings. Continuance of the problem will also wound the entire logistics sector in Malaysia. Nevertheless, MASkargo should be open to the crisis, seek for help or hunt for solutions externally especially from the industry champions to overcome challenges and set clear processes before the criticality intensifies. After all, MASkargo has the best ground facility in the country to handle cargoes.

Please see the attached copy of letter and circular from AFAM with regards to this issue.