This article first appeared in The Edge Malaysia Weekly on November 18, 2024 - November 24, 2024

Xin Hwa Holdings Bhd (KL:XINHWA), an integrated logistics service provider, recently announced that its wholly-owned subsidiary Xin Hwa Trading & Transport Sdn Bhd’s (XHTT) goods vehicle operator licence has been suspended until Feb 10, 2025. During this time, XHTT will not be permitted to operate any of its vehicles covered under the terms of the licence.

What’s puzzling is that the group is in the business of providing logistics services, which include land transport, warehousing and distribution, freight forwarding and customs brokerage, manufacturing and fabrication of trailers, and containers haulage services. Vehicles are an integral part of its business. So, how could it allow the licence to be suspended in the first place?

It was revealed that the suspension was imposed because XHTT did not fully comply with the ICOP-Keselamatan, specifically in ensuring that all goods vehicles under its operation are maintained in a condition deemed safe for use by the director-general of road transport. Does this mean it failed to properly maintain its fleet of vehicles? Safety is essential when running a transport business. Who should be held accountable for the oversight?

XHTT is a major subsidiary of Xin Hwa. In fact, the group has indicated that the three-month suspension is estimated to impact about 15% to 20% of the group’s revenue per month during the period, with expected losses of about 21% for the entire financial year ending March 31, 2025.

In the meantime, Xin Hwa says it will arrange for vehicles registered under its other subsidiaries to fulfil XHTT’s urgent deliveries and outsource some of the services to competent third-party transporters.

It is hoped that while waiting for the suspension to be lifted, Xin Hwa itself will put in place a competent vehicle maintenance programme to ensure such an incident does not recur.

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