Saturday, 15 March 2025

SFAA discusses freight forwarding issues with LPKP Sarawak

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A photocall during a courtesy visit from the Sarawak Forwarding Agencies Association (SFAA) at the LPKP Sarawak office.

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KUCHING: The Sarawak Forwarding Agencies Association (SFAA) recently held a meeting with the Land Public Transport Commission (LPKP) Sarawak at the LPKP Sarawak office.

The focus of the discussion was on key issues affecting the forwarding industry, specifically the equity requirements imposed on freight forwarders operating under Licence ‘A’ (container).

“The current regulation mandates that 51 per cent of the company’s shares for Licence ‘A’ (container) holders must be owned by Bumiputera shareholders. Originally implemented to promote Bumiputera participation in the industry, the policy has become increasingly burdensome for many businesses. As companies have grown, diversified, and expanded over time, many no longer meet this equity threshold,” said LPKP Sarawak chairman Michael Kong Feng Nian through a statement, Monday (Sept 23).

“Strict enforcement of this requirement could force the closure of numerous established companies in the forwarding sector, potentially creating an industry glut and leaving the market under-serviced. This situation could lead to higher costs for businesses and consumers across Sarawak,”he said.

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In response to these challenges, the LPKP Sarawak Board, during its meeting on Sept 13, unanimously agreed to waive the Bumiputera equity requirement for all existing Licence ‘A’ (container) holders.

This decision ensures that businesses licensed before Sept 12, 2024 can continue to operate and renew their licence without needing to meet the 51 per cent Bumiputera shareholding rule.

Additionally, the Board has approved the processing and approval of new or additional Licence ‘A’ (non-container) applications from these companies, allowing for further growth and stability within the industry.

He also highlighted the Commission’s commitment to supporting the industry by creating a more open and competitive business landscape.

“Our proactive approach in addressing this issue will benefit Sarawak’s economy by ensuring smoother logistics operations and more competitive pricing for businesses and consumers alike,” he said.

These measures are expected to protect existing businesses while encouraging new players to enter the market under fair and sustainable conditions.

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