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Rising fuel cost will affect
cargo shipping cost and global trade said
Malaysian Shipowners Association (MASA).
Chairman Nordin Mat Yusoff said the escalating
shipping cost would also dent trade liberalising
efforts achieved over the last few decades.
He said shipping cost between China-US trade had
tripled since 2000 and could further escalate
with oil prices heading towards US$200 per
barrel.
“This means markets like China, which has the
advantage of low production cost based on its
cheap labour, will loose its edge,” he said in a
statement.
Soaring transport cost for imported steel into
China and high export cost of of its steel
products had reduced China's competitiveness.
“We are likely to witness similar trends in
other trades, including manufactured products
which are highly sensitive to shipping costs
where oil makes up 50% of the freight cost,” he
said.
Nordin said shipowners were now left with little
option but to increase the freight rates or
impose higher fuel surcharge since bunker fuel
prices have now risen by about 80% since last
year. It now makes up some 50% to 60% of total
vessel operating costs, depending on vessel type
and size.
“Over the years, shipping lines have been
responding to the high cost of fuel by adopting
a number of operational adjustments such as
reducing speed of ships, consolidating services
through multi-carrier alliances, consolidating
routes to serve more locations with fewer ships,
among others.
“But these are only operational and management
approaches.
“The shipping and the logistics industry need to
get together urgently to address structural
issues in response to the soaring fuel cost and
its sensitivity to transportation cost,” he
said.
The concerns would be discussed at the 5th Asia
Maritime & Logistics Conference and Exhibition
2008 tomorrow.
The conference will be organised by MASA and
will be officiated by the Transport Minister
Datuk Ong Tee Keat. It will be attended by 400
delegates from more than 30 countries.
“We hope to kick off some useful discussion with
the global level participation of shipping and
logistics industry practitioners at this
landmark event,” said Ir Nordin.
Another highlight of the conference is a
luncheon presentation by the former Prime
Minister, Tun Dr Mahathir Mohamed on the impact
of global geopolitical changes on trade and
shipping in Asia.
Geo-political factors have always played
important role in determining the development of
trade and shipping.
“The strong growth in trade has contributed to
Asia taking a lead in the expansion of world
merchant fleet.
“Asia now has the world’s largest and fastest
growing shipyards, shipping lines, ports as well
as related-transportation and logistics
services,” he said. |
