KUALA LUMPUR: Global shipping costs are projected to stay high next year, with freight rates expected to rise further amid persistent challenges in the shipping industry.
Despite this, Malaysia's shipping sector anticipates a positive outlook, supported by a realignment of global trade routes.
Irhamy Valuers International Sdn Bhd, a subsidiary of Juwai IQI, forecasts that Malaysia's cargo ports will handle 778 million metric tonnes of goods by the close of 2024, generating economic benefits estimated at RM657 billion.
The firm values marine logistics and port assets, among other asset types, and collaborates with renowned consulting firm Andersen Global.
Chief executive officer and founder Irhamy Ahmad described 2024 as a record-breaking year for Malaysian cargo ports and anticipates even greater growth in 2025.
He estimates a 3.0 per cent to 5.0 per cent increase in cargo throughput next year, potentially reaching 817 million metric tonnes and contributing RM690 billion to Malaysia's gross domestic product (GDP).
Irhamy said that Malaysia's Tanjung Pelepas Port has made remarkable progress, ranking as the fifth most efficient in the world on the World Bank's Container Port Performance Index, ahead of Singapore, which ranks 17th.
This has surprised many in Singapore's shipping industry, he said.
He noted that 2024 marked the best year yet for Malaysia's ports in terms of cargo volume, operational efficiency, and economic impact.
"This is truly a sector in which we are one of the world's best. One development that has helped Malaysian ports increase their throughput this year is increasing shipping links to India."
According to Irhamy, the only limitation in the outlook is that the absence of a cruise terminal capable of handling large cruise ships prevents the ports from delivering even more for the economy.
He said the port operations, shipping, and marine transport contribute a staggering 40 per cent to local GDP, or about RM657 billion of economic activity every year.
"Malaysia's ports serve as transshipment hubs in Southeast Asia, meaning that trade going between other countries is first shipped to Malaysia before being shipped on to their final destinations. This earns our ports revenue and creates good jobs in Malaysia.
"Being a transshipment hub also gives us bigger opportunities. Goods transshipped through Malaysia can be processed, assembled, or packaged here. It gives companies a reason to invest in logistics and manufacturing facilities here. Free Trade Zones (FTZs) near ports enable these activities with minimal tariffs and regulatory barriers," he added.
Irhamy said that the Port of Tanjung Pelepas and Port Klang serve as global transshipment hubs, reflecting the increased demand for warehousing, distribution centres, industrial parks, and cold storage facilities nearby.
As the ports continue to grow in 2025 and beyond, he said more demand is expected in these asset classes, especially in Selangor, Johor, and Penang.
"We already see the impact on the ground. Land prices at Johor's Sedenak Tech Park, which is about a 50-minute drive from the Port of Tanjung Pelepas, have nearly doubled from about RM40 per square foot to as much as RM80 in just two years.
"Residential real estate will also benefit. Increased activity in and around the ports will drive employment growth, creating new jobs and demand for mid-range housing near port cities.
"Retail space in the same area will also see increasing demand as the local population grows and becomes wealthier," he said.
Port congestion continues to be a critical issue in global shipping, leading to delays, higher costs, and causing ripple effects throughout supply chains.
Maritime scholar and commentator Nazery Khalid told Bernama that the key ports globally faced congestion as port operators, cargo owners, and logistics service providers scrambled to clear the huge backlog of cargos held up at ports and along supply chains owing to the pandemic.
"Port operators are also hard-pressed to handle the spike in cargo throughput volumes resulting from the rebound in trade and economic activities post-COVID-19," he said.
The congestion issue peaked mid-year, with congestion at the Port of Singapore affecting Port Klang as liners diverted some port calls and an influx of containers and liners was redirected to Malaysia to avoid longer wait times in Singapore due to the maritime logjam, including berth congestion and delays.
To tackle these challenges, Westports implemented several measures, including streamlining gate operations to prevent yard overcrowding, prioritising vessels with higher loading volumes, and collaborating with importers and haulage companies to expedite container clearance.
Similarly, Northport adapted by accommodating 171 ad-hoc calls and welcoming 13 new services.