Identification of the key issues
Approximately 1% of local production of crude palm oil, i. e. 0. 18 million metric tonnes valued at RM325 million are lost annually to these oil pirates. The culprits involved in siphoning the crude palm oil and selling them to syndicates are tanker drivers, depot operators and transporters. Generally, 100 to 200 litres of crude palm oil are siphoned off from each tanker. The amount is replaced with liquid such as water, used oil or sludge which can result in contamination of the crude palm oil. Therefore, these substances affect the quality of the end product for export.
Many of the tankers of Palm Haul Sdn. Bhd. that do not reach the refineries are found abandoned by the roadside and empty with the drivers are missing. 2. Rising compensation to crude palm oil shortfall Palm Haul Sdn. Bhd. has to compensate the refineries for the amounts of crude palm oil that is short delivered. The tankers are loaded with the amounts stated in the delivery orders and by the time the tankers arrive at the refineries, the quantities delivered are short. This usually occurs during year-end where all the major festivities are during this period.
Identification of the key issues Essay Example
It is linked to the need for some quick cash by the drivers during that particular period. The compensation payment by Palm Haul Sdn. Bhd. has increased tremendously since year 2006 to 2009 as stated in the income statement. The compensation payment in the year 2006 is RM 345,111 almost doubled in the year 2007 which is RM 645,222. The amount in year 2008 is almost 2. 5 times year 2007 at RM 1,567,554 and as at 31/03/2009 which is the third quarter period of the company the compensation payment is RM 2,064,333. 3. Driver shortage
Most of the transport companies require drivers to be on the road for days at the time and so do drivers of Palm Haul Sdn. Bhd. where 160 out of 200 employees are drivers. The irregular routes and the days away from home are difficult for many drivers. Palm Haul Sdn. Bhd. also unable to provide an attractive remuneration package to the drivers since the company is a small family-owned company. Bigger players in the transport industry are able to draw drivers with far much better benefits and bonuses where Palm Haul Sdn. Bhd. unable to match.
High maintenance cost Most of the transport companies operate tankers well past their useful life where problems will arise especially to the engine and it will tend to break down more on the road due to the heavy load. Tankers well past their useful life are also unreliable especially for long distance deliveries. Transport companies need to replace their tankers that past their useful life but these companies reluctance to do so. All these results with unnecessary high maintenance cost for the tankers of transport companies.