Malaysia must raise shipping participation to reduce large freight outflows: Daim

13 Sep 2019 / 19:50 H.

KUALA LUMPUR: Malaysia, as a major contributor to world trade and a growing trading partner with many countries, needs to raise its level of participation in shipping to help reduce the country’s large freight outflows, said former Council of Eminent Persons chairman Tun Daim Zainuddin (pix).

Daim, who also served as the finance minister from 1984 to 1991, said while Malaysia’s total value of trade increased 58% from 2008 to 2018, the size of Malaysian-owned fleet and the country’s share of world shipping, however, had been reduced.

“Looking at just the container trades, despite the rapid growth of many Chinese container ports over the last decade, both Port Klang and Tanjung Pelepas remain on the list of the top 20 world container ports in terms of twenty-foot equivalent unit (TEU) throughput.

“But the combined container throughput (in Malaysia) in 2017 was still a noteworthy 60% of Singapore’s container throughput in 2017,“ he said in a keynote address titled “Malaysia’s Maritime Industry - What Lies in the Future” at the Association of Malaysia’s Maritime Professionals’ (IKMAL) 2019 Presidential Lecture here today.

Therefore, he said, Malaysia needs a more concerted national approach involving close consultations between private shipping companies, government-linked companies, exporters and importers, as well as close collaborations among them to achieve more stability in the provision of shipping services in the long run.

Meanwhile, Daim said it is also necessary for the country to have greater control and security on shipping services for its key exports and imports.

For instance, he said, palm oil export from Malaysia, of which the volume is expected to reach about 20 million tonnes in 2019, is seen as a strategic export cargo which will continue to need shipping services for many years ahead.

“However, the shipping of palm oil has been substantially left in the hands of foreign shipowners and shipbrokers,“ he said.

In regard to the import of coal, Tun Daim noted that about 15% of Malaysia’s coal imports for Tenaga Nasional Bhd are shipped on Malaysian-flagged vessels, following the award of contracts of affreightment in 2016.

“But more than 80% of our coal imports are still shipped on foreign-flagged vessels even though coal is a cargo of strategic importance for our power generation.

“It is also concerning to note that the current mix of the Malaysian fleet is not aligned with the pace and growth trends in world trade,“ he said.

Touching on the participation of Malaysian vessels in the fastest growing shipping segment, namely the container shipping business, Daim noted that the participation also remained negligible.

“Our national line’s (MISC Bhd) exit from the liner business in 2011, due to its compelled commercial reasons, has unfortunately flushed out much of the expertise and resources we had developed to directly participate in international liner operation.

“We will see ourselves receding in the level of engagement in world shipping without rebuilding our presence in the liner segment, though it is known to be a very challenging and capital-intensive business and needs to be collaborated in consortium with other liner operators,“ he added.

Moving forward, Daim said the ongoing geo-political and trade tensions, namely the US-China trade spat, disruptive Brexit, as well as the changing energy supply-demand patterns, including policies and regulations on fuel and energy mix to address environmental issues, will inevitably impact the world trade and shipping.

“Therefore, to ensure that we are able to drive growth in our maritime industry and strengthen our level of participation in international trade, Malaysia needs to strengthen collaboration with other countries, especially the border communities,“ he said. — Bernama

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