PUTRAJAYA: Malaysian ports are among the most efficient in the world with the capability to meet the requirements of shipping lines at very competitive charges
“Our competitiveness, particularly Port Klang, remains unaffected despite the move by Ocean Alliance, led by CMA CGM, to relocate their operations in the Port of Singapore”.
“It is only a short term ripple effect due to the move by Ocean Alliance, and mergers and acquisitions of CMA CGM,” said Transport Minister Datuk Seri Liow Tiong Lai.
Speaking after chairing the 3rd National Logistics Task Force (NLTF) Meeting for 2017, here yesterday, he said that with two out of three shipping alliances operating in Singapore, shipping lines will find it more challenging to operate, especially transhipment, in the island nation.
“It makes more sense for each of the alliance to locate its hub in different ports so that it can compete leveraging on the strength of its supply chain. But now, they are competing within a single hub in the same port without deriving any strategic advantage. Instead of having a pool each for themselves, they now are competing within a single pool.
“It is not far-fetched to say that with shipping lines intensifying competition against one another in Singapore, Port Klang will potentially be an attractive alternative hub in the future. It is a golden opportunity for shipping lines,” he added.
Liow said Malaysian ports are expected to continue to grow exponentially with a steady increase in total trade.
“In 2016, our total trade was RM1.48 trillion while for the first 7 months up to July 2017, it has surpassed RM1 trillion, the fastest pace ever. Total indigenous throughput for the first eight months in 2017 for Port Klang grew by 5.5 per cent from 2.70 million Teus in 2016 to 2.85 million Teus. Also, cargo volumes are expected to increase with the setting up of regional distribution centres in the vicinity of the ports. In addition, our ports have stayed focused on attracting cargo from the South East Asia region,” he said in a statement.
On the Malaysia Shipping Masterplan, Liow is confident that it will bring the shipping industry through its key strategic shifts to greater heights.
“I will be chairing the Malaysia Shipping Council which has been entrusted to look into re-energising the Malaysian shipping industry.”
“For the shipping lines here, I am looking forward to meet and work with them to ensure that we grow and prosper together. We will build a brighter future for the shipping industry in Malaysia,” Liow added.
On measures to improve Malaysia’s Logistics Performance Index (LPI), Liow said the NLTF will collaborate with the Malaysia Productivity Corporation (MPC) to address the challenges and bottlenecks in the logistics and trade facilitation sectors.
“We will form focus groups who will deliberate and present proposals to the NLTF. Hopefully, this structured approach can help to improve our LPI rankings in the future,” Liow said.
Regarding the RM30 million Last-mile Connectivity to Port Klang Initiative to improve the quality of roads to cater for heavy vehicles operating in the vicinity of Port Klang, Liow thanked the Public Works Department (PWD) and the agencies involved for the on-schedule implementation of the project which is expected to complete next month.
On the Digital Free Trade Zone (DFTZ) located in KLIA Aeropolis, Liow urged MAHB to closely monitor the upgrading works at the former Low Cost Carrier Terminal (LCCT) to ensure it is completed on time and operational by year end.
“Jack Ma will be visiting Malaysia in November 2017. We must be prepared to leverage on his visit, particularly the state of readiness of DFTZ,”, Liow said.
DFTZ aims to establish Malaysia as the regional distribution centre which integrates the functionalities of Logistics Service Providers (LSP) for efficient cargo movements. This objective is aligned with the aspirations of the National eCommerce Strategic Roadmap, Thrust 3 – Lift Non-Tariff Barriers which include, nurturing LSPs with best-in-class last mile delivery and facilitating cross-border flow of goods and services.
LSPs can take advantage of the surge in cargo volume arising from the DFTZ once it is fully operational. They can collaborate with merchants to provide logistics services to handle incoming as well as outgoing cargo.