FACTORS THAT EFFECT TRANSPORTATION COST IN MALAYSIA

Nowadays , transportation are one of the most factor that should be count in trading, so when transportation cost increased the price for the shipment will also increased. There are many factor that influences the increasing of transportation cost in Malaysia. These factors are :



1) THE INCREASING OF OIL PRICE


As we know oil price will keep increasing day by day. The increasing of distance indirectly also will increasing in the transportation cost. The increasing of oil price also give a big impact towards economic in Malaysia . As we know oil are the main source that have a limited amount so for sure when the transportation cost is increased goods and services also increasing to stabilize the economic as an example In Malaysia, before this oil price of RON 95 RM 1.90 per liter but then government decreased the subsidy from RM 1.90 to RM 2.10 . So this will surely affect the firm in sending their goods so the amount of transportation cost cannot be same as before it should be increased.

2) THE INCREASING AMOUNT OF TRANSPORTATION USED


Then, the increasing number of transportation used in manufacturer to delivered their goods . A firm that wants to expand their market should be able to have more transportation to fulfill their customer demand especially for firms that produce large scale production they should have many transportation . The cost of transportation increasing when a firm have to buying a new transportation.



3) TECHNOLOGY CHANGES

The changes of technology is keep update year by year . If we compare the old system with the new one there are a lot of different so this will surely effect the transportation cost by using higher quality and price of equipment in transportation . Every firm have to upgrade to a new system to compete each other because customer always want the best quality of product as an example GPS system , to develop this system it need a lot of capital so this will indirectly increasing the transportation cost.



4) GLOBALIZATION


Globalization is the inter-dependence of nations on one another goods, resulting in a global economy. One may argue that such has occurred since civilization began, with the thing we know as commerce, but that is more wrong than right. A firm that want to expand their market to globalize will surely increasing the cost of transportation because there is not only one mode of transportation as an example from Malaysia wants to send the goods to Europe not only one mode of transportation can move the freight so its mean when it involve globalization trading it will affect towards transportation cost .



Transportation cost will keep increasing year by year based on current situation . Nowadays, we have to learn to accept the increasing of the cost sometimes it will benefit ourselves.