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Cambodia: Up to 15 percent of logistics providers ‘heading for bankruptcy’
The Cambodia Freight Forwarders Association (CFFA) yesterday said the on-going COVID-19 pandemic is seriously damaging logistic providers, with about 10 to 15 percent heading for bankruptcy in the upcoming months.
Until now, the best way to describe the local logistics business it is becoming
more “serious”, with many providers struggling to survive, CFFA President Sin Chanthy said, noting that some had already gone bankrupt and within the next two or three months others will file for bankruptcy.
“The logistics providers have been adversely affected the COVID-19 pandemic, and we haven’t seen any sign as to when the situation will recover,” he said.
He added that the traffic of goods and product exports have dropped about 70 to 80 percent and because there has been a dramatic decrease in buying orders. There are more than 100 logistics firms that are the member of the association. Chanthy said they are struggling to survive and are facing financial distress, with an estimated 60 percent decrease in revenue.
“We used to enjoy lots of goods transportation, with garment representing the largest product export in the country followed by agricultural products. Now the export portion remains small. For the garment sector, we haven’t heard any good news yet but we all hear that factories continue to close,” he said.
Chanthy noted some airports around the world will resume operations from next month, but the demand for orders is still hopeless.
“Although COVID-19 has gradually eased and some airports around the world are expected to resume their operations, but we are still uncertain that the buying orders or goods traffic will be back to normal,” he said, adding that only 2 or 3 percent are remaining operational for air cargo in the country.
He said some companies are now applying for loans from microfinance and banking institutions to continue their business operations because of cash flow problems, while revenue continues to drop.
When asked whether the government intervened to assist the sector, Chanthy said his association has not received any information on support so far.
“We understand that the government has been actively involved in intervention to help the private sector, but as for the logistics sector we haven’t yet received any assistance from the government and we will propose and list what we are facing to seek help,” he said.
He added that the most important matter is financial assistance in terms of providing loans with reasonable interest rates while complaining that export procedures are still complex and the informal fee charge costs from 40 to 50 percent more than the logistics cost.
“We also insisted the government tries to solve this matter, ensuring that the procedure for exports is convenient and no more informal fees should be charged because it is causing us to suffer. The more convenient export procedure, the better the flow of local product exports to foreign markets,” Chanthy said.
Source: https://www.khmertimeskh.com/50737975/up-to-15-percent-of-logistics-providers-heading-for-bankruptcy/