KUALA LUMPUR (March 27): Manufacturers and private-sector employers have joined contractors in calling for the government to implement immediate measures to cushion the impact of the Middle East conflict.
The Federation of Malaysian Manufacturing (FMM) on Friday said their members are starting to grapple with rising energy costs and logistics charges, and disrupted supply chains are starting to weigh heavily on businesses.
The FMM noted that the closure of the Strait of Hormuz and disruption of the Red Sea shipping corridor have driven sustained increases in freight-related charges, war risk surcharges, and marine insurance premiums of between 200 and 400%, with vessels rerouting via the Cape of Good Hope extending transit times by up to 14 days. This affects the delivery schedules and working capital cycles across Malaysian manufacturing.
Besides, the FMM also noted that manufacturers are facing a tightening supply of critical petroleum-based raw materials and packaging materials are becoming more expensive too.
“Manufacturers are also facing tightening supply of critical petroleum based raw materials. Key inputs including naphtha, LPG (liquefied petroleum gas), resins, synthetic rubber inputs, sulphur and packaging materials are becoming more expensive and less available.”
“Most manufacturers operate on two- to six weeks of inventory. Continued disruption will affect production continuity across plastics, chemicals, electronics, rubber products and food processing sectors,” the federation said in a statement.
Therefore, to stabilise costs and protect export competitiveness, the FMM has outlined six priority measures, including sales tax and duty relief for reimported export cargo, double tax deductions for crisis-related logistic costs, diesel subsidy access for fuel-intensive industries, priority allocation of critical raw materials, deferral of port tariff hikes, and greater transparency in freight surcharges and shipping line practices.
Meanwhile, the Malaysian Employers Federation (MEF) expressed support for the government’s fuel rationalisation measures — introduced in response to higher crude oil prices amid the Middle East crisis — but called for a pragmatic, phased, and sector-sensitive implementation.
MEF president Datuk Dr Syed Hussain Syed Husman, in a separate statement, noted that businesses and the private sectors must adopt practical and immediate measures to reduce fuel usage without compromising on productivity or operational continuity.
“For the private sector, this includes implementing work-from-home arrangements for non-critical roles where feasible, encouraging carpooling initiatives, and promoting greater use of public transportation. These measures can significantly reduce daily fuel consumption while maintaining business continuity,” he said in a statement on Friday.
He also urged employers to reassess operational practices, particularly in logistics and business travel.
“Employers should optimise logistics planning through better route management, improved load efficiency, and minimisation of unnecessary trips. At the same time, the use of virtual meeting platforms should be intensified to reduce the need for physical travel,” he further said.
Both the FMM and MEF emphasised that abrupt policy shifts could exacerbate production costs and inflationary pressures, but stressed that they are prepared to work with the government to ensure that relief measures are targeted and implemented in a way that balances economic sustainability, business continuity, and national resilience.