President Jacob Lee Chor Kok said that some important materials needed for manufacturing are likely to be hard to find or not available at all, in addition to prices going up.

He said that the conflict in West Asia has hurt the sector in three main ways – it has caused problems with logistics, made energy and fuel more expensive, and wrecked the supply of materials.

The FMM survey in Malaysia is indeed an eye opener. The companies having to pay more for insurance and port storage when shipments are delayed, and they also have to pay more to reroute shipments.

The rise in energy and fuel prices is another problem that affects everyone. Because of this, FMM is asking the government to think about giving the sector a diesel subsidy.

There are big problems, especially with petrochemical derivative products like polyvinyl chloride, polypropylene, polyethylene, and various other plastic resins, Jacob Lee Chor Kok said during the Bernama TV program – Impact of the West Asia Conflict on Malaysia’s Manufacturing Sector on April 06, 2026.

He said that most Malaysian businesses are in traditional manufacturing, which means they are very sensitive to price increases because their margins are so small. This is indeed a big threat to the long-term health of businesses.

He added, “We do hope that the government could come up with measures or interventions to help cushion cost increases so that companies will not need to pass on too much of the increase to consumers, which could in turn drive inflation.”

Lee says that the Malaysian manufacturing sector makes a big difference in the country’s gross domestic product – GDP with a 23% of GDP, and employs 2.3 million people.

According to Lee, “We (the manufacturing sector) are probably the second-largest taxpayer in the country. Meanwhile, 86% of Malaysia’s exports are manufactured goods. However, I would also like to highlight that 44% of our exports come from the electrical and electronics sector or emerging technology manufacturing.”

Lee also said that the Purchasing Managers’ Index – PMI, which shows whether the manufacturing sector is getting bigger or smaller, showed that the sector was getting better but was still unstable. The PMI rose to 50.2 in January 2026 and then fell to 49.3 in February. — Bernama

He said that PMI is an indicator with an upper limit of 50. Readings above 50 show growth, while readings below 50 show contraction.

Right now, the price of oil is still over $100 a barrel. At 5:18 PM on April 7, 2026, Brent crude oil dropped 1.54% to $107.30 per barrel. – Bernama

The fact is that tariffs are taxes. US consumers as well as businesses pay them. And while steel and aluminum are not things that people buy directly, they are essential inputs when it comes to things we buy, such as appliances, electronics, cars, packaging, construction materials, etc. It is well to be noted that there are two main base tariffs on steel and aluminum that appear in consumer goods– as core inputs when it comes to the product itself, like steel in an oven or aluminum in a laptop body, and as packaging, such as steel cans for vegetables or aluminum for soda as well as beer.

It happens to be a straightforward dynamic. When the input expenditures go up, the product prices do too. The price hike is not immediate since the business will first burn Through the pre-tariff inventory, which they stockpiled in order to shield customers and also buy time. However, once that inventory is out, companies will be forced to pay the tariff-inflated rates, and those expenditures are going to be passed on to the consumers.

And by the way, these are not small increases. For many categories, the effect is going to be quite prominent. Put it into the right perspective: the Fed gets nervous when the inflation goes on to hit anywhere between 3 and 4%. This latest round of tariffs has just doubled the tax on steel and aluminum to 50%.

So how bad can it get?

In case one is a US manufacturer and is making products, which are mostly steel or aluminum, like metal framing, or even beverage cans, the cost of goods sold (COGS) has already gone up by 20% as of June 4, 2025. If steel or aluminum accounts for even 50% of the COGS, like in the case of home appliances or laptops with aluminum enclosures, the cost is already increased by almost 10%.

It is well to be noted that a 20% hike is almost 8 times the present US inflation rate. And that is for goods that are manufactured domestically. If one is importing the finished goods, with numerous stacking tariffs at play, the rise is going to be all the more significant.

There are some manufacturers who are trying to reduce the exposure by way of revising the product designs and also replacing metal with certain alternative choices wherever possible. Apparently, packaging is a common target. One can anticipate a favorite holiday tin of cookies to arrive in probably shrink wrap or cardboard in 2025. Not as elegant, but of course cheaper and potentially the difference between what the consumer buys and passes.

Apparently, Pepsi has already flagged that the higher cost of aluminum may as well lead to greater usage of plastic packaging. The fact is that they already bottle in plastic, so manufacturing disruption is going to be minimal. However, the downstream retailers with shelves that are built especially for cans are now going to incur the switching costs.

Still, there are many products for which steel and aluminum are non-negotiable. If one manufactures front loader buckets or even car frames, there is no plastic or wood involved. The fact is that in most of the tariff environments, companies are looking forward to transitioning their sourcing away from countries having higher tariffs towards the ones with more favorable terms. But in this case, almost a 50% tariff applies to all the countries, and the point is that swapping a Chinese supplier for a Canadian one is going to offer no relief.

The only move forward would be sourcing more domestic steel and aluminum since the tariffs give US producers a pricing edge. Although it sounds great in theory, in practice, they simply cannot meet the demand.

Can the domestic supply scale?

At present, almost 25% of US steel as well as 50% of US aluminum is imported from overseas. Around all of that, aluminum happens to come from Canada, and hence this is a big supply gap to fill. Interestingly, companies can go ahead and build more US steel and aluminum plants. However, only if they are willing to play the long game. It is a big hurdle since these industries are capital intensive and also slow moving. They need new grid infrastructure along with a massive amount of power, which is something that is already under a lot of pressure from crypto industries as well as AI.

Even if the businesses break ground in the days to come, new capacity is going to take years, if not decades, to come online. The near-term gap is also unavoidable, and if history tells us anything, the long-term gains are not guaranteed at all.

Still, the biggest risk by far to investment within domestic steel as well as aluminum production happens to be the uncertainty in policies. The tariffs that are imposed today may well be gone tomorrow. This is not a conducive environment when it comes to long-term billion-dollar investments.

The competitive risk

It is well to be noted that when the Trump administration went on to impose 25% tariffs on steel and 10% tariffs on aluminum in 2018, the assumption was that the domestic output could also increase. Rather, the US production of both the elements fell down by 15% in the case of steel and 10% for aluminum.

And due to the fact that they are fungible commodities, a 50% tax on imports goes on to mean the price of domestic steel and aluminum is going to rise as well. History goes on to show that domestic producers alter prices right below the new import expenditure. That is how the commodities work. So even if someone is buying American, they’re still going to pay a little more.

The downstream effect happens to be that US manufacturers of products having steel or aluminum inputs are going to become less competitive as compared to the foreign players. In order to compensate, industry lobbyists are going to push for carve-outs as well as targeted protection. A perfect instance is the announcement by the administration of a 50% tariff on the steel content of imported home appliances, which took effect on June 23, 2025. In an almost paradoxical circular way, this kind of tariff goes to protect domestic manufacturers, which have been disadvantaged by the earlier doubling of steel tariffs.

This new tariff, of course, only applies to the metal components and not the entire product. But if someone is planning for a complete kitchen renovation, like installing the new fridge or washer or stove, the cost has just gone up.

It is just another reminder that tariffs happen to be the taxes.

So, what should the business do?

There are three ways in which companies should be taking the steps so as to protect themselves –

1- Get visibility: If one is managing sourcing as well as trade exposure in spreadsheets, it is time to modernize. Invest in real-time tools in order to know what is taking place in the constantly shifting spectrum of tariffs, which happens to be the most fluid trade environment in the last 80 years.

2- Make sure to connect the trade data back to the supply chain: Real-time tariff visibility happens to be a very significant first step. However, it is not enough. There are better decisions that come from knowing what needs to be done with changing tariff information, such as how to alter sourcing and inventory and also planning since the political changes keep on continuing.

3- Rapid action: Whether it is stockpiling when it comes to tariffs getting delayed or altering the sourcing in response to a much more favorable ruling, it is important to move fast well before the policy transitions again, and the companies that do that are going to come out strong.

What’s the ultimate outcome?

The fact is that uncertainty is indeed the reality of the world going forward, at least for the foreseeable future. This kind of latest escalation of tariffs on steel and aluminum to 50%, along with the July 9 announcement, goes on to send a larger message – the US trade posture is no longer predictable, even for those who are very close to the US. Because of abrupt policy alterations that are taking place without warnings, businesses are learning to treat the risks related to geopolitics as a core element in supply chain planning as well as operations.

However, in this scenario, there are no good answers and fewer bad ones. Everyone is indeed getting hurt. Although there is no escaping this reality, the right thing is to take steps to move fast and be less hurt as compared to your competition, and in doing so, get a competitive advantage.

This move on the UK government’s pragmatic border control approach, part of ongoing negotiations towards a Sanitary and Phytosanitary (SPS) Agreement with the EU, signals a much-needed, pragmatic response to industry concerns. 

The government has demonstrated an understanding of the operational and economic challenges facing British freight forwarders, producers, and retailers by postponing further checks on imports such as live animals and non-qualifying Northern Ireland goods.

BIFA director general, Steve Parker, commented, “We welcome the government’s decision to delay further Border Target Operating Model (BTOM) implementation and take a reasoned, phased approach while SPS Agreement details are finalised. This provides vital breathing space for our members and the wider supply chain, while reducing the risk of disruption and unnecessary costs. The freight and logistics sector has long called for clarity and stability — and this announcement reflects meaningful progress in that direction.”

As per the updated plans, existing checks on Rest of World imports through Border Control Posts (BCPs) will remain in place. The remote documentary and destination checks on EU and EFTA goods will continue. Current easements on medium-risk goods, such as fruits and vegetables, will be temporarily extended.

Parker added,“It is encouraging to see recognition of the importance of maintaining open trade flows with our largest market. As freight forwarders continue to navigate a complex global environment, we urge the government to keep working closely with industry, and to ensure that the eventual implementation of new controls — when necessary — is managed with transparency, sufficient notice, and operational support.”

British International Freight Association (BIFA) applauds the government’s commitment to protecting the UK’s biosecurity and public health. Also, it continues with stakeholders to ensure any future changes are clearly communicated.

Moreover, BIFA will continue to monitor developments on the UK government’s pragmatic border control approach and keep its members informed as negotiations on the SPS Agreement progress.

Previously, the company split its operations across three sites at Frankfurt Airport. Fraport, the owner and operator of Frankfurt Airport, designed and built the airfreight warehouse to align with its customers’ needs.

Notably, the new facility has 24,500 square meters of warehouse space on a 55,000 square meter site. Overall, the warehouse has 54 gates and truck docks with associated roadways and maneuvering areas. Also, the facility has 25 parking spaces for trucks and 185 spaces for other vehicles. Out of the total parking spaces, 20 of these spaces are equipped with e-charging stations.

A large photovoltaic system is currently being built on the warehouse roof, with peak generation of two megawatts. Upon commissioning, the green energy produced will be utilised in the airport grid.  Fraport is seeking ESG verification for the EU taxonomy, as well as gold certification from the German Sustainable Building Council (DGNB) for its design and excellent sustainability performance. Flexible office and meeting spaces occupy 3,000 square meters.

Anke Giesen, Executive Director Retail and Real Estate at Fraport AG, says: “The launch of full operations by DHL Global Forwarding at the state-of-the-art airfreight warehouse is a major milestone in the ongoing development of Frankfurt Airport as an airfreight hub. Under the CargoHub Masterplan, Fraport aims to increase cargo volumes at FRA by some 50 percent to around three million metric tons of airfreight per year. In this context, the new warehouse is a major project for Fraport’s real estate development team, and it’s now been completed on schedule.”

Additionally, DHL opens airfreight warehouse that will play a crucial role in handling the forecasted growth in the airfreight market. With its CargoHub Masterplan, Fraport AG is focusing on the expansion of Frankfurt as an airfreight hub over the coming years. The plan involves three key initiatives, including space optimization, space development, and digitization & process innovation. The blueprint shows Fraport continuing to develop Frankfurt Airport sustainably, aligning with freight demand. 

The ceremony was attended by top officials as well as representatives of the Turkish company that was behind the deal.

It is well to be noted that an agreement that was signed earlier in 2025 between Pasifik Eurasia, the Turkish logistics company, and China State Railway so as to develop the middle corridor route has come into effect due to the arrival of the first train departing from the Chinese cities bound for Istanbul. These trains were welcomed to Istanbul and then thereafter were sent off on their routes to Europe.

Apparently, the welcoming as well as the sendoff ceremony took place at Marmaray Halkah station and was attended by Osman Boyraz and Enver Iskurt, the deputy ministers of transport and infrastructure, as well as Veysi Kurt, the Turkish State Railways’ director general, along with the vice chairperson of the board of Pasifik Eurasia, Erol Erkan, as well as other officials.

It is well to be noted that under the deal, 10 train services are going to be initially operated with the objective of reaching 1000 services every year, said Pacifik Eurasia in an announcement that was shared on the public disclosure platform – KAP earlier in June 2025. Collaboration with the state-owned company that oversees the railway logistics throughout China is anticipated to speed up the freight volumes along what is called the middle corridor.

Iskurt, speaking at the ceremony, said that two freight trains, which have arrived in Istanbul, go on to represent a historic landmark on the China-Turkey-Europe railway line and that the beginning of regular freight transportation through the Middle Corridor goes on to further strengthen the role of Turkey when it comes to global logistics.

Iskurt went on to note that as one of the concrete results when it comes to the Global Transport Corridors Forum, which was held in Turkey, the first regularly operated freight train on the
China-Turkey-Europe railway line is going to reach Poland through Turkey.

He added that Turkey goes on to reinforce its role when it comes to global logistics systems through the middle corridor, which indeed stands out as an international corridor for railways.

According to him, while the global trade volume happened to be at $3 trillion in 1990, today it has gone on to reach a whopping $33 trillion. This kind of unprecedented growth has brought not just the requirement for more transportation but also the need to develop faster, environmentally friendly, efficient, and also integrated logistics systems.

Iskurt opines that at this point in time, railway transportation stands out due to its advantages of low carbon emissions, safe transport, and also high capacity.

The pallet network in Wolverhampton has teamed up with Samsara to build a custom forklift safety technology solution using AI tracking systems. This is the first of its type in the UK.

Pallet-Track has spent more than £100,000 on implementing tracking, cameras, and AI technologies as part of its continuous effort to make warehouses safer.

Pallet-Track was the first to look for a custom solution since camera technology for HGVs is easy to get, but forklift safety technology hasn’t yet made it to the UK market in this advanced form.

The system can record and evaluate severe braking, identify areas for improvement, and even detect driver fatigue using AI.

The technology can also identify who is driving and monitor driving behaviour through facial recognition.

Anthony Ratchford head of safety, health, environment, and quality (SHEQ) at Pallet-Track, said: “We are proud to be investing heavily in SHEQ and leading the way for forklift safety in the industry with this innovative solution.

“Our long-term goal is to set a target safety score for all forklift drivers at our hub and ensure this score is maintained by providing our drivers with familiarisation and refresher training, if required.

“Working with Samsara has enabled us to develop the technology we need to drive our commitment to safety forward and to utilise AI to detect, notify and report any unsafe behaviour in the warehouse.”

Stuart Godman, CEO at Pallet-Track, added: “Pallet-Track is undergoing a period of rapid growth and change, so it is vital that we continue to invest and prioritise the safety of our operations team.

“This technology is game-changing for the industry and will ensure that hub safety is not compromised as we continue to grow at this pace.”

Pallet-Track is a network of more than 90 distribution professionals who are shareholders and move more than 4 million pallets every year.

This change is not only about embracing new tools but also represents a strategic transition in the way procurement is operated across industries. Digital procurement hubs bring procurement into alignment with more overarching business objectives by facilitating data-driven insights, building tighter supplier relationships, and delivering agility in sourcing operations. As global supply networks become ever more interconnected, performance and compliance expectations increase, and sustainability expectations rise, these hubs are becoming critical drivers of long-term competitiveness and resilience.

The Procurement Revolution: From Manual to Digital

Earlier, procurement operations were marred by paperwork, disjointed lines of communication, and opaque vendor management practices that had their own cost in delay and operation inefficiencies. The shift to digital procurement hubs has now put an end to all this. Such advanced platforms leverage technologies like artificial intelligence, data analytics, and machine learning to automate procurement sourcing, aggregate procurement functions, and automate vendor management.

Industry research has indicated that procurement using technology is a priority for most organisations, with the majority adopting digital hubs to drive efficiency as well as cost savings. The widespread application of such technologies signals the need for efficient, transparent, and responsive supply chain operations in today’s advanced environment.

Enabling Transparency and Control

Perhaps the most transformative advantage delivered by digital procurement hubs is the higher level of visibility throughout the supply chain. By consolidating supplier data and buying activities into one electronic structure, companies gain instantaneous insight into every feature of the buy and source process. The higher level of visibility lowers error rates, increases compliance, and enables more enlightened, data-driven decision-making.

With all supplier information, contracts, and performance measures at their fingertips, procurement leaders can easily identify bottlenecks, monitor the reliability of the suppliers, and ensure compliance with organisational standards and regulatory requirements. This end-to-end visibility lowers the risk of unauthorised spending and lessens the chances of supply chain failure.

Accelerating Sourcing and Vendor Management

With such a fast-moving market climate these days, responsiveness and speed are critical. Digital procurement hubs allow companies to greatly reduce sourcing and supplier enrolment time. Procurement teams, through the automation of repetitive tasks and streamlined processes, can well discover, evaluate, and correspond with a global network of approved vendors. Not only is lead time reduced, but continuity of supply in adverse conditions is guaranteed too.

Moreover, the embedded analytics in these hubs support predictive sourcing, and businesses are able to predict market trends and manage demand fluctuations ahead of time. Digital procurement hubs, by automating the complete vendor management process, enable organisations to enable operational resilience and respond appropriately to anticipated as well as unforeseen supply chain events.

Digital Procurement Hubs: Top Benefits 

• Vendor centralization and real-time supply chain visibility
• Automated buying and shortened procurement cycles
• Improved compliance by suppliers and reduced unauthorized expenses
• Savings through focused purchasing and competitive bidding
• Improved collaboration and creativity with supply base partners
• Risk prevention and supply continuity

The benefits of digital procurement hubs extend far beyong operations improvements; they are a significant force towards cost-effectiveness. By centralising purchasing activity and making best practice standard, these locations double or triple an organisation’s purchasing power and stimulate competitive bidding from suppliers. This leads to improved conditions of contract and measurable cost reductions.

By using analytics driven by data, procurement specialists can identify saving opportunities, reduce wasteful expenditures, and refine supplier portfolios. Automation also frees up valuable human resources so that procurement teams can concentrate on strategic functions such as supplier development, market intelligence, and risk management.

Fostering Collaboration and Innovation

Digital procurement hubs are not only about effectiveness in operations—they are also drivers of innovation and collaboration. By creating a single platform that facilitates communication, document exchange, and performance measurement, these hubs enhance buyer-supplier relationships. This common platform simplifies the resolution of issues, enhances the sharing of fresh ideas, and paves the way for co-innovation programs.

A single digital platform also facilitates easier compliance with evolving sustainability requirements and regulatory requirements. Digital procurement hubs allow organisations to engage with suppliers more effectively with shared goals of quality, sustainability, and innovation.

Conclusion

Digital procurement hubs are a new chapter in supply chain management—all defined by agility, transparency, and value. With business companies increasingly faced with more complex sourcing issues, changing compliance needs, and the need for cleaner practices, digital procurement hubs provide the kind of scalable and future-ready solutions the business demands. Simplifying vendor management, making transparency a reality, and ending operating bottlenecks, these platforms are the modern supply chain’s go-to tool.

For supply chain managers and business executives today, an investment in digital procurement hubs is not merely an improvement in operations but a strategic necessity that offers provisions for long-term prosperity and resiliency. As the digital economy continues to evolve, companies that embrace this chance will be well placed to thrive in the ever-changing global trade environment.

Sustainability – Indeed A Part of The Core Business Strategy In The Current Times for Consumer Goods & Retail Sector

The fact is that sustainability isn’t a corporate buzzword anymore – it is a part of a core strategy. As governments go on to put in place some very strict regulations, such as the Corporate Sustainability Report Directive by the EU, companies have to embrace some robust frameworks pertaining to sustainability. Effective strategies go on to incorporate ESG principles in every aspect when it comes to operations – right from sourcing to production as well as to end-of-life solutions. At the center of this evolved approach to sustainability is making sure that a company happens to understand the most material of the issues. There are certainly a greater number of companies that are now adopting dual materiality evaluations not just to meet the reporting needs but at the same time to ensure that priorities that happen to be identified are as well integrated into business strategy.

Data-driven insights as well as digital tools happen to be helping the organizations to measure and at the same time also manage their respective sustainability performance in a more effective way. A sustainability strategy in today’s times is all about creating long-term value for all the stakeholders while at the same time ensuring to stay ahead of the regulatory and market demands. There is a modern approach that needs to be taken up to double materiality as well as strategy and also reporting and see this opportunity to lead in a completely new horizon of reporting.

Rolling Out a Strong Approach to Human Rights in the Supply Chain’s Gamut

With rising scrutiny when it comes to human rights, the pressure happens to be on brands so as to make sure that their approach to human rights is strong. Very recent data goes on to highlight the challenge of forced labor, violations in wages, and working conditions that aren’t adequate in many regions of the world. This includes markets that were initially thought to be less risky. All these challenges undoubtedly pose a major risk to businesses, including penalties and reputational damage, and not to forget the negative human rights effects.

The point is that the companies need to make sure that they happen to be putting in place apt due diligence as well as human rights assessment in order to understand their risks when it comes to operations and also supply chains. There are companies that are also adopting engagement tools such as grievance mechanisms and surveys on workers as well as third-party assessments so as to identify the ongoing barriers and also look into ideal opportunities to remedy any sort of issue that’s been identified. Through enhancing transparency and also ownership, businesses can also lessen the risk and also create a positive social impact. It is well to be noted that there are already some customized solutions that help the companies to uphold human rights and, at the same time, meet international benchmarks, thereby making sure that supply chains are strong and resilient, compliant, and also ethical.

Transparency Has to Be a Part of The Healthy and Sustainable Food Systems

Consumers go on to demand responsibility and also transparency from brands, and one cannot discuss this without food being in it. The push when it comes to healthy and sustainable food systems is indeed witnessing a growth since the retailers and suppliers are looking to present nutritious food and, at the same time, reduce the carbon footprint to a significant extent, thereby playing their part in a positive way towards biodiversity as well as respecting human rights. All in all, one can see that assurance is indeed required so as to help address environmental and also social concerns and at the same time build consumer trust. The consumer goods & retail sector happens to face an unparalleled opportunity to lead when it comes to ethical and sustainability practices. Taking into consideration these trends is not just required when it comes to compliance but also necessary so as to build a brand that goes on to resonate with the consumers of the modern world.