KUCHING: Logistics costs in Sarawak are projected to fall by nearly 20 per cent following infrastructure upgrades, particularly the completion of the Pan Borneo Highway.
However, industry players caution that lower transport costs may not automatically lead to cheaper retail prices.
Chairman of the Kuching Trade, Importers and Exporters Association, Datuk Yii Ming Tang, said improved connectivity enhances efficiency but does not eliminate broader cost pressures.
“The highway improves efficiency — it saves time and enhances safety — but it does not necessarily reduce overall operating costs,” he told Sarawak Tribune.
While shorter travel times and reduced vehicle wear-and-tear may generate savings, Yii said other expenses continue to rise.
Chief among them is the RM1,700 minimum wage.
“In the past, new workers could be paid between RM800 and RM1,200 depending on experience.
Now, everyone starts at RM1,700,” he said.
He explained that adjustments to the minimum wage lift the entire salary structure, as experienced workers also demand higher pay.
The result is a cascading cost effect that limits businesses’ ability to lower prices, even if transport expenses decline.
“When costs go up, it is very difficult to bring them down again,” he added, noting that sectors such as food services and workshops rarely reverse price increases despite fluctuations in raw material costs.
On average, Yii estimates that cumulative operational pressures could still push overall costs up by five to 10 per cent, depending on the industry.
He also pointed to stricter loadlimit enforcement, which may require additional trips for heavy materials such as cement, sand, stone and iron bars, potentially offsetting highway-related savings.
Smaller and lighter goods, including electrical items transported between towns, are less likely to see price adjustments, as minor increases are typically absorbed within existing margins.
While rural communities stand to benefit from better access, last-mile delivery costs and other overheads remain significant.
“There is no firm reason to expect prices to go down purely because of logistics improvements,” he said.
